Schaeffer's Trading Floor Blog

Analyst Upgrades: Groupon Inc, Nokia Corporation (ADR), and Zynga Inc

Analysts upwardly revised their ratings on GRPN, NOK, and ZNGA

by 7/2/2013 9:10 AM
Stocks quoted in this article:

Analysts are weighing in today on daily deals website Groupon Inc (NASDAQ:GRPN), mobile phone maker Nokia Corporation (ADR) (NYSE:NOK), and online game provider Zynga Inc (NASDAQ:ZNGA). Here's a quick roundup of today's bullish brokerage notes.

  • GRPN -- which has surged more than 78% so far this year -- was initiated with a "buy" rating and a price target of $11 at Wunderlich Securities this morning. Nevertheless, sentiment among the brokerage bunch remains decidedly bearish toward Groupon Inc. Only three analysts have deemed the stock worthy of a "strong buy" endorsement, compared to 14 "holds" and six "sell" or worse suggestions. Even more telling, the security's average 12-month price target of $6.59 reflects a discount to yesterday's closing price of $8.67. This leaves plenty of room for a round of upgrades and/or price-target hikes, which could help push the shares higher.

  • Up more than 80% on a year-over-year basis to trade at $3.86, NOK received some bullish attention today, after the company said it will acquire Siemens AG's (ADR) (NYSE:SI) 50% stake of their joint venture, Nokia Siemens Networks. UBS raised its price target to 3 euros from 2.4 euros, while BofA-Merrill Lynch and Nomura issued their own upward price-target adjustments. (However, Canaccord Genuity lowered its price target.) Elsewhere, bearish speculation continues to grow toward Nokia Corporation (ADR), as short interest climbed by more than 11% during the past two reporting periods. These pessimistic bets now account for nearly 12 days' worth of pent-up buying demand, at the equity's average pace of trading.

  • ZNGA saw its price target lifted to $3 from $2.50 at Evercore Partners ahead of the open, after the company's founder, Mark Pincus, announced on Monday that he is stepping down as CEO, and will be replaced by Don Mattrick. Zynga Inc has climbed about 30% year-to-date to hover at $3.07, which could explain the optimism in the near-term options pits. The stock's Schaeffer's put/call open interest ratio (SOIR) checks in at 0.50, with calls doubling puts among options scheduled to expire within the next three months. This ratio arrives in the 22nd annual percentile, meaning short-term traders are more call-heavy toward the stock security than usual right now.

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