Schaeffer's Trading Floor Blog

Analyst Upgrades: Chipotle Mexican Grill, Kraft Foods Group, and Silver Wheaton

Analysts upwardly revised their ratings on CMG, KRFT, and SLW

by 11/6/2012 9:12 AM
Stocks quoted in this article:

Analysts are weighing in today on burrito chain Chipotle Mexican Grill, Inc. (NYSE:CMG - 265.20), mac 'n' cheese giant Kraft Foods Group Inc (NASDAQ:KRFT - 44.77), and mining issue Silver Wheaton Corp. (USA) (NYSE:SLW - 38.98). Here's a quick roundup of today's bullish brokerage notes.

  • Up nearly 2% in pre-market trading, CMG was upgraded to "buy" from "neutral" at Bank of America-Merrill Lynch today, which could help ease the stock's year-to-date decline of more than 21%. The security has also trailed the broader S&P 500 Index (SPX) by close to 18 percentage points during the past 40 sessions, which may be attracting skeptics. Short interest on the equity ramped up by more than 10% during the last two reporting periods, and now accounts for roughly 12% of CMG's available float. It would take nearly three days to unwind these bearish bets, at the security's average pace of trading.

  • Canaccord Genuity started coverage of KRFT with a "buy" rating and a price target of $50 this morning, after the company approved a $650 million restructuring and spin-off transition program. The equity is off to a slow start this month -- shedding about 1.5% in November thus far -- but that hasn't fazed call buyers. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 20-day call/put volume ratio of 5.81 for the stock, confirming traders have bought to open nearly six calls for every put during the past four weeks.

  • Finally, SLW saw its price target lifted to $48 from $45 today, after revealing that it is on track to reach its full-year production forecast. The equity has advanced roughly 35% so far this year, so it's no surprise that short-term calls are preferred over puts lately. In fact, the security's Schaeffer's put/call open interest ratio (SOIR) sits at 0.57, confirming calls nearly double puts among options expiring in the next three months. This ratio is just 11 percentage points above a yearly nadir, meaning near-term traders have rarely been more call-heavy toward the stock during the past year.

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