Schaeffer's Trading Floor Blog

Analyst Upgrades: Netflix, Inc., Sirius XM Radio Inc, and Texas Instruments Incorporated

Analysts upwardly revised their ratings on NFLX, SIRI, and TXN

by 7/23/2013 9:02 AM
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Analysts are weighing in today on streaming video service Netflix, Inc. (NASDAQ:NFLX), Internet radio issue Sirius XM Radio Inc (NASDAQ:SIRI), and semiconductor name Texas Instruments Incorporated (NASDAQ:TXN). Here's a quick roundup of today's bullish brokerage notes.

  • Up a whopping 183% year-to-date to perch at $261.96, NFLX received some upbeat analyst attention this morning, after topping analysts' quarterly earnings estimates post-close yesterday. J.P. Morgan Securities lifted its price target to $290 from $254, while RBC, Wedbush Securities, and Cantor Fitzgerald issued their own upward price-target adjustments. (The latter, however, also cut the stock to "hold" from "buy.") Elsewhere, the security's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio sits at 1.29, indicating calls bought to open have outpaced puts during the past two weeks. This ratio ranks higher than 70% of similar annual readings, meaning traders have been picking up Netflix, Inc. calls over puts at an accelerated pace.

  • SIRI -- which is on tap to report second-quarter earnings before this Thursday's open -- saw its price target upped to $3.50 from $3 at Wunderlich Securities ahead of the open. The stock has surged nearly 77% on a year-over-year basis to trade at $3.68 -- and bested the broader S&P 500 Index (SPX) by about 10 percentage points over the last three months -- which could explain the bevy of near-term call activity lately. Schaeffer's put/call open interest ratio (SOIR) for Sirius XM Radio Inc checks in at 0.21, with calls more than quadrupling puts among options scheduled to expire within the next three months. In fact, this ratio ranks lower than all comparable readings taken during the past 12 months, signaling near-term traders are more call-heavy toward the equity now than at any other time during the past year.

  • TXN was also in the bullish spotlight today, after reporting stronger-than-expected quarterly earnings on Monday afternoon. SunTrust upgraded the equity to "neutral" from "reduce," while a slew of brokerage firms including Canaccord Genuity, J.P. Morgan Securities, Deutsche Bank, Evercore Partners, RBC, Credit Suisse, Nomura, BMO, Wedbush Securities, and FBR Capital Markets raised their respective price targets. Texas Instruments Incorporated sports a 52-week gain of roughly 40%, yet sentiment among the analyst crowd remains bearishly skewed. Only nine covering analysts have handed out "strong buy" endorsements, compared to 19 "holds" and five "sell" or worse suggestions. What's more, the stock's average 12-month price target of $35.77 reflects a discount to yesterday's closing price of $37.42. In other words, further upgrades and/or price-target hikes could be in the cards for TXN.

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