Schaeffer's Trading Floor Blog

Analyst Upgrades: Bank of America, Zynga, and Bed Bath & Beyond

Analysts upwardly revised their ratings on BAC, ZNGA, and BBBY

by 2/5/2013 9:04 AM
Stocks quoted in this article:

Analysts are weighing in today on financial services firm Bank of America Corp (NYSE:BAC - 11.48), online game guru Zynga Inc (NASDAQ:ZNGA - 2.56), and home furnishings retailer Bed Bath & Beyond Inc. (NASDAQ:BBBY - 58.35). Here's a quick roundup of today's bullish brokerage notes.

  • BAC -- which boasts a year-over-year gain of about 44% -- saw its price target raised to $15 from $14 at Guggenheim this morning. However, this vote of confidence aside, most of the analysts covering the stock maintain a wary attitude toward BAC. The equity currently sports nine "buy" or better ratings, compared to 17 tepid "holds," and one "strong sell" suggestion. What's more, the security's 12-month price target of $12.07 reflects expected upside of just 5.1% to Monday's closing price of $11.48. This leaves plenty of room for future upgrades and/or price-target hikes, which could help push the shares higher.

  • As ZNGA prepares to report quarterly earnings after today's close, the stock was upgraded to "buy" from "neutral" at Bank of America-Merrill Lynch today. Meanwhile, the equity has seen plenty of bullish options activity lately. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 50-day call/put volume ratio of 7.73 for ZNGA, confirming traders have bought to open nearly eight calls for every put during the past 10 weeks. This ratio ranks higher than 93% of similar annual readings, meaning speculators have been snapping up calls over puts at a near annual-high clip.

  • Analysts at Citigroup lifted BBBY to "buy" from "neutral" ahead of the opening bell, which could help add to the security's year-to-date advance of more than 4%. Elsewhere, short-term traders seem to share this optimistic outlook toward the stock. Schaeffer's put/call open interest ratio (SOIR) for BBBY checks in at 0.40, indicating calls more than double puts among options scheduled to expire in the next three months. In fact, this ratio hovers just 2 percentage points above a yearly nadir, signaling near-term options players have rarely been more call-heavy toward the equity during the last 12 months.

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