Schaeffer's Trading Floor Blog

Analyst Update: Pandora Media Inc (P), Monsanto, and Yelp Inc (YELP)

Analysts weighed in on P, MON, and YELP

by 10/3/2013 2:39 PM
Stocks quoted in this article:

U.S. stocks are swimming in red ink today, after the Treasury Department warned that not raising the debt limit in time could result in 2008-esque consequences. Among the equities in focus are streaming music provider Pandora Media Inc (NYSE:P), agricultural issue Monsanto Company (NYSE:MON), and business review site Yelp Inc (NYSE:YELP), which have all attracted the attention of analysts.

  • P tagged a new record high of $27.93 before falling in sympathy with the broader equities market, with the shares last seen 0.6% lower at $26.73. The stock ticked higher out of the gate this morning, a day after the firm said listener hours jumped a year-over-year 18% in September, and the number of active listeners increased 25%. Against this backdrop, BMO last night lifted its price target on the equity to $32 from $25. Despite almost tripling in 2013, puts remain the contracts of choice among option buyers. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 2.26 stands just 5 percentage points from a 12-month peak. In other words, option traders -- or, perhaps, hedging Pandora Media Inc shareholders -- have picked up puts over calls at a near-annual-high pace during the last two weeks.

  • MON is defying broad-market headwinds this afternoon, up 0.6% at $104.63. The firm yesterday forecast weaker-than-expected 2014 earnings, and said it's buying weather data provider Climate Corp. for roughly $930 million. Analysts are largely celebrating the purchase, with Canaccord Genuity offering a late-night price-target hike to $124 from $121, and Deutsche Bank lifting its target by $4 to $116. (Goldman Sachs, meanwhile, downgraded Monsanto Company to "buy" from "conviction buy.") In the options pits, short-term traders are skeptical when it comes to MON. The stock's Schaeffer's put/call open interest ratio (SOIR) of 1.63 stands higher than 97% of comparable readings of the past year, implying that near-term traders have rarely been more put-heavy.

  • Finally, YELP is also higher this afternoon, after Wunderlich boosted its price target to $82 from $53 -- the second bullish note in three days for the stock. The brokerage firm said it believes YELP "has become better positioned with new products to capture marketing spend from local business." While the shares of YELP have skyrocketed 278% in 2013, and now sit at $71.26, short sellers have been upping their bearish exposure. Short interest jumped 11.5% during the most recent reporting period, and now accounts for 17.2% of Yelp Inc.'s total available float -- or 6.51 million YELP shares. Meanwhile, the consensus 12-month price target among analysts rests at $52.37, representing a discount to YELP's current price, and leaving the door wide open for additional price-target hikes.

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