Schaeffer's Trading Floor Blog

Analyst Upgrades: NetApp, Walgreen Co., and MEMC Electronic Materials

Analysts upwardly revised their ratings on NTAP, WAG, and WFR

by 2/12/2013 9:10 AM
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Analysts are weighing in today on data storage provider NetApp Inc. (NASDAQ:NTAP - 35.36) , drugstore chain Walgreen Company (NYSE:WAG - 41.48), and silicon wafer maker MEMC Electronic Materials, Inc. (NYSE:WFR - 4.48). Here's a quick roundup of today's bullish brokerage notes.

  • NTAP -- which is scheduled to report fiscal third-quarter earnings after tomorrow's close -- was upgraded to "buy" from "hold" at Brean Capital this morning, while analysts at Wedbush lifted their price target to $35 from $34. Elsewhere, call activity has been running rampant on the security lately. NTAP's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio sits at 3.74, confirming traders have bought to open nearly four calls for every put during the past two weeks. This ratio ranks higher than 82% of similar annual readings, reflecting a stronger-than-usual preference for calls over puts.

  • Up about 12% year-to-date, WAG was raised to "buy" from "neutral," and saw its price target boosted to $46 from $39 at Mizuho Securities ahead of the open. Conversely, near-term traders seem to have a pessimistic attitude toward the stock. Schaeffer's put/call open interest ratio (SOIR) for WAG stands at 1.34, with puts outstripping calls among options slated to expire in the next three months. In fact, this ratio is just 4 percentage points shy of an annual high, meaning short-term options players have rarely been more put-heavy toward the stock during the past year.

  • Also on tap to reveal quarterly earnings tomorrow is WFR, which scored a price-target hike to $4.50 from $3.50 at Jefferies today -- a move that could help add to the stock's 2013 gain of roughly 40%. The equity has also outperformed the broader S&P 500 Index (SPX) by close to 76 percentage points during the last three months, which could be attracting call buyers. According to data pulled from the ISE/CBOE/PHLX, the security's 20-day call/put volume ratio checks in at 2.46. In other words, calls bought to open have more than doubled puts over the course of the past four weeks.

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