Schaeffer's Trading Floor Blog

Analyst Update: QUALCOMM, Home Depot, and Yum! Brands

Analysts adjusted their positions on QCOM, HD, and YUM

by 1/8/2013 10:24 AM
Stocks quoted in this article:

While Wall Street gears up for the start of corporate earnings season later today, here's a quick update on some of the latest brokerage notes, including adjustments for telecommunications concern QUALCOMM, Inc. (NASDAQ:QCOM - 64.31), home improvement retailer The Home Depot, Inc. (NYSE:HD - 63.11), and quick service restaurateur Yum! Brands, Inc. (NYSE:YUM - 64.65).

  • Thanks to a price-target hike from Credit Suisse this morning, QCOM is adding to its 14% year-over-year gain. Specifically, the brokerage upped its target by $10 to $85, while maintaining an "outperform" rating. The rest of the analyst crowd is already fairly bullish, with 31 "buy" or better endorsements, versus three middling "holds," and not a single "sell" suggestion. Meanwhile, the average 12-month price target sits at $72.50, which represents a 12.7% premium to QCOM's current trading price.

  • Morgan Stanley weighed in on the hardline retail industry today, raising its view to "in-line" from "cautious," and lifting its price target for HD to $67 from $64. Technically speaking, HD has been nothing short of impressive over the past 12 months, tacking on more than 45%, and traveling near April 2000 highs. Despite this overall uptrend, near-term options players maintain a bearish grip on HD. The Schaeffer's put/call open interest ratio (SOIR) of 2.45 confirms puts more than double calls among options slated to expire within three months. This ratio ranks 6 percentage points from an annual high, suggesting short-term options players have rarely been more put-heavy during the past year.

  • YUM has taken a hit today, after saying it sees a larger-than-predicted drop for same-store sales in China. Plus, several brokerages slapped YUM with negative notes: Susquehanna hacked its price target to $65 from $69; UBS cut its target to $69 from $73; Jefferies trimmed its target by $2 to $68; and S&P Capital by $1 to $78. At last check, the stock is off more than 4.5%, which has pulled its 52-week return to 8.4%. And there could be further downside ahead, especially if YUM continues to fall short of analyst expectations. Currently, there are 13 "buy" or better recommendations, eight "holds," and just one "strong sell." Meanwhile, the consensus 12-month price target of $77 represents a 19% premium to YUM's current trading price.

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