Stocks quoted in this article:
U.S. stocks are flirting with modest gains, as Wall Street weighs a mixed bag of data. Among the equities in focus include mass couponer Groupon Inc (NASDAQ:GRPN), telecom titan AT&T Inc. (NYSE:T), and insurance issue American International Group Inc (NYSE:AIG), which have all attracted the attention of analysts.
- GRPN is 1.1% lower at $8.44, despite a price-target boost to $6 from $4.70 at UBS this morning. The brokerage firm maintained its "sell" rating on GRPN, despite the stock's year-to-date advance of more than 73%. Of course, the security is no stranger to skepticism. While GRPN has outperformed the broader S&P 500 Index (SPX) by nearly 28 percentage points over the past three months, just three out of 22 analysts offer up "buy" or better opinions, leaving the door wide open for future upgrades. Plus, on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 0.96 stands 10 percentage points from a 52-week peak, implying option buyers have initiated bearish bets over bullish at a faster-than-usual clip. An unwinding of pessimism in the options pits could also translate into contrarian tailwinds for Groupon Inc (NASDAQ:GRPN).
- Meanwhile, Evercore Partners analysts reacted to T's $1.2 billion purchase of Leap Wireless International, Inc. (NASDAQ:LEAP), trimming their price target on T to $38 from $39. The shares were last seen 0.8% lower at $35.53, bringing their year-to-date gain to a paltry 5.4%. Despite underperforming the SPX by 13 percentage points over the past 60 sessions, AT&T Inc. (NYSE:T) sports a Schaeffer's put/call open interest ratio (SOIR) of 1.06, in the 30th percentile of its annual range. In simpler terms, near-term option players are more call-heavy than usual right now. A mass exodus of option bulls could exacerbate selling pressure on Ma Bell.
- Finally, AIG is up 0.3% at $46.90, after notching a fresh two-year high of $47.07 earlier in the session. Ahead of the bell, Evercore Partners lifted its price target on the equity by $2 to $50, and there could be more on the way. The average 12-month price target on the stock sits at $48.35, just a stone's throw from AIG's current price. Option buyers, on the other hand, are already optimistic on AIG, which has tacked on more than 32.5% in 2013. The stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 4.08 rests just 10 percentage points from an annual acme, pointing to a healthier-than-usual appetite for long calls over puts of late.