Schaeffer's Trading Floor Blog

Analyst Upgrades: The Boeing Company, Discover Financial Services, and Chipotle Mexican Grill

Analysts upwardly revised their ratings on BA, DFS, and CMG

by 3/13/2013 9:15 AM
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Analysts are weighing in today on aerospace giant The Boeing Company (NYSE:BA - 84.16), banking concern Discover Financial Services (NYSE:DFS - 42.13) , and burrito chain Chipotle Mexican Grill, Inc. (NYSE:CMG - 318.45). Here's a quick roundup of today's bullish brokerage notes.

  • Up nearly 12% so far this year, BA received some upbeat attention this morning, after the company obtained approval to test a redesigned battery for its 787 Dreamliner. BB&T Capital Markets upgraded the stock to "hold" from "underweight," and Stifel Nicolaus lifted its price target to $100 from $85. However, sentiment in the options pits is less than optimistic. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.82 is just 6 percentage points shy of a yearly peak. In other words, traders have been purchasing puts over calls at a near annual-high pace.

  • DFS -- which sits on a year-to-date gain of more than 9% -- was raised to "outperform" from "market perform," and saw its price target boosted to $48 from $42 at FBR Capital Markets today. (Meanwhile, analysts at Sterne Agee also issued an upwardly revised price target.) Elsewhere, skepticism has been heating up toward the equity. In fact, short interest on the stock spiked by more than 19% during the last two reporting periods. Still, DFS' pessimistic camp is far from crowded, as these shorted shares represent a paltry 0.6% of the credit card company's available float. It would take less than a day to cover these bearish bets, at DFS' average pace of trading.

  • CMG scored a price-target hike to $320 from $310 at Wedbush Securities ahead of the open, which could help add to the security's 2013 advance of about 7%. The equity has also bested the broader S&P 500 Index (SPX) by more than 7 percentage points during the last three months. Nevertheless, short-term traders have been bearishly slanted toward the stock. Schaeffer's put/call open interest ratio (SOIR) for CMG checks in at 1.18, with puts outpacing calls among options expiring in next three months. This ratio ranks higher than 69% of other such readings collected over the past year, indicating near-term speculators are more put-heavy toward the security than usual.

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