Schaeffer's Trading Floor Blog

Analyst Upgrades: Yahoo! Inc. (YHOO), Adobe Systems, and Goldman Sachs Group Inc

Analysts upwardly revised their ratings on YHOO, ADBE, and GS

by 7/17/2013 9:32 AM
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Analysts are weighing in today on Internet issue Yahoo! Inc. (NASDAQ:YHOO), software specialist Adobe Systems Incorporated (NASDAQ:ADBE), and financial firm Goldman Sachs Group Inc (NYSE:GS). Here's a quick roundup of today's bullish brokerage notes.

  • YHOO was blessed with a bevy of bullish brokerage notes this morning, following last night's turn in the earnings confessional. RBC kicked things off by boosting its price target for the stock to $32 from $24, and was quickly followed by the likes of Stifel, Oppenheimer, Evercore, J.P. Morgan, Topeka, and UBS. As a result, the stock has soared 2.6% in pre-market trading. Additional brokerage-induced tailwinds may be on the horizon, considering 59% of covering analysts maintain a "hold" or worse suggestion toward the equity. Plus, the consensus 12-month price target of $28.30 represents a slim 5.3% premium to YHOO's current perch at $26.88. A re-evaluation of ratings in the wake of YHOO's well-received quarterly results could translate into a contrarian boon for the stock.

  • ADBE enjoyed an upgrade to "market perform" from "underperform" at FBR ahead of the bell, with the brokerage firm also raising its price target for the equity to $45 from $35. On the charts, the stock has added an impressive 26% year-to-date to trade at $47.49. However, bearish speculation is swirling in ADBE's options pits. Schaeffer's put/call open interest ratio (SOIR) for the equity sits at 1.21, in the 98th percentile of its annual range. In other words, short-term speculators have been more put-heavy just 2% of the time within the past year. Going forward, this heavy accumulation of puts could translate into options-related support for the security, as the bearishly skewed bets begin to unwind.

  • On the heels of Tuesday's earnings beat, GS saw its price target lifted to $160 from $155 at KBW this morning -- which is still a discount to the equity's present price of $160.24. Given the 25.6% GS has tacked on in 2013, it's no surprise to see a bullish bias among option players. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day call/put volume ratio of 2.29 ranks higher than 72% of similar readings taken in the past year. Simply stated, calls have been bought to open over puts at a faster-than-usual clip in recent weeks.

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