Schaeffer's Trading Floor Blog

Analyst Upgrades: Bank of America Corp, International Business Machines Corp., and Visa Inc

Analysts upwardly revised their ratings on BAC, IBM, and V

by 7/18/2013 9:30 AM
Stocks quoted in this article:

Analysts are weighing in today on financial services firm Bank of America Corp (NYSE:BAC), tech giant International Business Machines Corp. (NYSE:IBM), and credit card name Visa Inc (NYSE:V). Here's a quick roundup of today's bullish brokerage notes.

  • BAC -- which sports a 52-week gain of 90% -- received some bullish attention today, following Wednesday morning's stronger-than-expected quarterly earnings report. KBW lifted its price target to $15 from $13.50, while Bernstein and Raymond James also issued upward price-target adjustments. However, sentiment among the brokerage bunch remains bearishly skewed toward Bank of America Corp. Only eight analysts have handed out "strong buy" endorsements, compared to 14 "holds" and two "strong sell" suggestions. What's more, the stock's average 12-month price target of $13.63 reflects a discount to yesterday's closing price of $14.31. This leaves plenty of room for further upgrades and/or price-target hikes, which could help push the shares higher.

  • IBM saw its price target raised to $220 from $215 at BMO this morning, after besting consensus bottom-line earnings estimates post-close yesterday, and raising its full-year outlook. International Business Machines Corp. has added just 1.6% so far this year to hover at $194.55, which could explain the put-biased activity in the options pits. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio sits at 1.12, confirming puts bought to open have outstripped calls during the past two weeks. This ratio ranks higher than 75% of similar annual readings, meaning traders have been scooping up puts over calls at an accelerated clip.

  • Up more than 48% on a year-over-year basis to linger in the $189.64 neighborhood, V scored a price-target hike to $220 from $196 at Jefferies ahead of the opening bell. Elsewhere, the near-term options crowd seems confident about Visa Inc's prospects. The equity's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.93, with calls outnumbering puts among options scheduled to expire within the next three months. In fact, this ratio registers in the 10th percentile of its annual range, indicating short-term options players have rarely been more call-focused toward the security during the past year. Also of note, the firm is scheduled to report fiscal third-quarter earnings after the close on Wednesday, July 24.

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