Schaeffer's Trading Floor Blog

Analyst Upgrades: Reynolds American, Inc., T-Mobile US Inc, and Wells Fargo & Co

Analysts upwardly revised their ratings on RAI, TMUS, and WFC

by 8/5/2014 9:05 AM
Stocks quoted in this article:

Analysts are weighing in today on tobacco titan Reynolds American, Inc. (NYSE:RAI), telecommunications firm T-Mobile US Inc (NYSE:TMUS), and banking concern Wells Fargo & Co (NYSE:WFC). Here's a quick roundup of today's bullish brokerage notes on RAI, TMUS, and WFC.

  • Morgan Stanley raised its outlook for RAI to "equal weight" from "underweight," following a day that saw the stock add 0.7% to close at $56.14. Longer term, shares of RAI are up nearly 21% from their Feb. 11 annual low of $46.55, yet most analysts remain skeptical of the stock. At present, roughly 63% of covering analysts maintain a "hold" or worse suggestion toward the security. Should Reynolds American, Inc. continue to make ground on the charts, an additional round of upgrades could help fuel the security's fire.

  • In the wake of last week's barrage of fundamental developments for TMUS -- which included an upbeat earnings report and fresh buyout bid -- Raymond James raised its price target on the stock to $41 from $36, and reiterated its "outperform" rating. On the charts, T-Mobile US Inc is sitting a nickel above its year-to-date breakeven line to trade at $33.69, yet traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open nearly 13 calls for each put during the past 10 sessions. What's more, the resultant call/put volume ratio of 12.79 ranks in the 85th percentile of its annual range, pointing to a distinct bullish bias in the equity's options pits.

  • WFC has found a firm foothold atop the $50.50 mark in recent weeks -- home to peak put open interest in the August-dated series of options -- and analysts at Susquehanna think there's room to run. Specifically, the brokerage firm raised it price target for WFC to $56 from $52, representing expected upside of 9.8% from yesterday's closing price of $50.99. Overall, the consensus 12-month price target of $54.53 stands at a slimmer 7% premium to current trading levels, leaving the door wide open for additional price-target hikes, which could help propel Wells Fargo & Co higher.

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