Schaeffer's Trading Floor Blog

Analyst Upgrades: Hewlett-Packard Company, Starbucks Corporation, and Verizon Communications Inc.

Analysts upwardly revised their ratings on HPQ, SBUX, and VZ

by 3/18/2013 8:39 AM
Stocks quoted in this article:

Analysts are weighing in today on computer issue Hewlett-Packard Company (NYSE:HPQ - 22.18), java giant Starbucks Corporation (NASDAQ:SBUX - 57.66) , and wireless concern Verizon Communications Inc. (NYSE:VZ - 48.02). Here's a quick roundup of today's bullish brokerage notes.

  • Up roughly 56% so far this year, HPQ was upgraded to "overweight" from "equal weight" at Morgan Stanley this morning. Nevertheless, sentiment in the short-term options pits has been bearishly skewed lately. Schaeffer's put/call open interest ratio (SOIR) for Hewlett-Packard checks in at 1.07, indicating puts outnumber calls among options scheduled to expire in the next three months. This ratio ranks higher than 74% of comparable readings taken within the last 12 months, reflecting a stronger-than-usual preference for near-term puts over calls.

  • SBUX -- which has climbed 7.5% year-to-date -- saw its price target lifted to $74 from $69 at Lazard ahead of the opening bell. Meanwhile, skepticism toward the stock has been increasing as of late. Short interest on Starbucks spiked by about 23% during the last two reporting periods. However, there is still plenty of room in the equity's pessimistic camp, as these bearish bets make up just 1.5% of the security's available float. It would take less than two days to buy back these shorted shares, at the stock's average daily trading volume.

  • VZ was raised to "buy" from "neutral" at Citigroup today, which could help add to the equity's 2013 gain of nearly 11%. Elsewhere, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day put/call volume ratio of 1.34 for Verizon, confirming puts bought to open have outpaced calls during the past two weeks. This ratio arrives in the 80th percentile of its annual range, meaning speculators have been picking up puts over calls at a faster-than-usual pace.

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