Schaeffer's Trading Floor Blog

Analyst Upgrades: Groupon, Applied Materials, and Michael Kors

Analysts upwardly revised their ratings on GRPN, AMAT, and KORS

by 2/13/2013 9:11 AM
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Analysts are weighing in today on daily deals provider Groupon Inc (NASDAQ:GRPN - 5.29) , semiconductor stock Applied Materials, Inc. (NASDAQ:AMAT - 13.66), and fine accessories designer Michael Kors Holdings Ltd (NYSE:KORS - 62.00). Here's a quick roundup of today's bullish brokerage notes.

  • Up nearly 7% in pre-market action, GRPN was upgraded to "buy" from "neutral" at Sterne Agee this morning. The stock has climbed almost 9% so far this year -- while also besting the broader S&P 500 Index (SPX) by north of 62 percentage points during the last three months -- yet there is still plenty of bearish speculation hovering over GRPN. Short interest currently accounts for a formidable 19% of the security's available float. It would take more than three sessions to unwind these pessimistic bets, at the equity's average daily trading volume.

  • As AMAT prepares to report quarterly earnings following today's close, the equity received price-target hikes at Susquehanna (to $9 from $8) and Piper Jaffray (to $16 from $13) ahead of the open. The security has advanced more than 19% year-to-date, which could be attracting short-term bulls. Schaeffer's put/call open interest ratio (SOIR) for AMAT sits at 0.35, with calls nearly tripling puts among options expiring in the next three months. This ratio ranks in the 16th percentile of its annual range, denoting a healthier-than-usual appetite for near-term calls over puts.

  • KORS saw its price target lifted to $80 from $67 at Jefferies today, thanks to a stronger-than-expected quarterly earnings report released Tuesday morning. Meanwhile, analysts at Barclays and Wedbush also upped their respective price targets. This upbeat sentiment is also prevalent in the options pits, as KORS 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio stands at 2.31. In other words, calls bought to open have more than doubled puts during the past 10 weeks. This ratio ranks higher than 70% of similar annual readings, indicating traders have been picking up calls over puts at an accelerated pace.

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