Schaeffer's Trading Floor Blog

Analyst Update: Intel Corporation, Visa Inc, and JetBlue Airways Corporation

Analysts adjusted their ratings on INTC, V, and JBLU

by 11/21/2014 2:09 PM
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Analysts are weighing in today on blue chips Intel Corporation (NASDAQ:INTC) and Visa Inc (NYSE:V), as well as transportation issue JetBlue Airways Corporation (NASDAQ:JBLU). Here's a quick look at today's brokerage notes on INTC, V, and JBLU.

  • INTC hit a fresh 12-year high of $36.46 out of the gate, but was last seen 0.8% lower at $35.66. Earlier, the shares received price-target hikes from no fewer than six analysts -- the most ambitious of which came from Imperial Capital, which upped its target to $40 from $37 and reiterated its "outperform" rating -- on the heels of a better-than-expected 2015 revenue outlook and increased dividend. In the options pits, pessimism toward Intel Corporation has been heavy. The stock's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.80 is just 6 percentage points from an annual high. Plus, INTC's Schaeffer's put/call open interest ratio (SOIR) of 1.23 sits at a 12-month peak. An unwinding of this skepticism in the face of the security's 37% year-to-date rally could spell tailwinds.

  • V hit another record high of $256.56, following a price-target hike to $290 from $250 at Susquehanna, which also reaffirmed its "positive" opinion of the shares. At last check, the stock was still 0.7% higher at $253.33, bringing its year-to-date advance to nearly 14%. The aforementioned bullish brokerage note is par for the course on Wall Street. Twenty out of 24 analysts tracking Visa Inc have doled out a "buy" or better rating, versus just four "holds" and not a single "sell." Plus, the consensus 12-month price target -- while just a chip-shot away from current trading levels -- stands in all-time-high territory, at $258.53.

  • JBLU reached its own seven-year peak earlier -- topping out at $13.69 before dropping below breakeven -- after Imperial Capital's price-target cut to $16 from $20 (though the firm also underscored its "outperform" rating). At last check, the equity was down 2.5% at $13.11. This follows yesterday's news that JetBlue Airways Corporation will redeem all of its outstanding convertible debentures. On the sentiment front, short interest represents a lofty 20.7% of JBLU's float, which is 5.5 times the stock's average daily trading volume. In other words, if the shares can resume their uptrend, potential short-covering activity could assist them on their quest for higher highs.

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Stocks On the Move: Aruba Networks, Inc., The Gap Inc., and SouFun Holdings Ltd

ARUN, GPS, and SFUN are moving sharply in Friday's trading

by 11/21/2014 12:30 PM
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Around midday, three of the top market movers are network access expert Aruba Networks, Inc. (NASDAQ:ARUN), apparel retailer The Gap Inc. (NYSE:GPS), and online real estate portal SouFun Holdings Ltd (NYSE:SFUN). Here's a quick roundup of how ARUN, GPS, and SFUN are performing on the charts so far.

  • ARUN has staggered to an 11.5% loss at midday, hovering near $19.30. This, following a disappointing fiscal second-quarter outlook -- which is overshadowing the company's better-than-expected fiscal first-quarter results -- and no fewer than six price-target cuts. Longer term, though, Aruba Networks, Inc. remains nearly 8% higher on a year-to-date basis. On the sentiment front, short sellers have been busy, with short interest spiking close to 16% during the most recent reporting period, and now comprising 9.3% of the equity's float. To put this in perspective, it would take more than a week to buy back all of these shorted shares, at ARUN's typical daily trading levels.

  • GPS has tumbled 5.2% to trade at $38.07, after slashing its full-year profit forecast (and despite a third-quarter earnings beat). What's more, the stock got pummeled on the Street, as no fewer than six brokerage firms trimmed their respective price targets. As a result, The Gap Inc. is now sitting in the red on a year-to-date basis, and is at risk of closing the session below its 10-day moving average for the first time since Nov. 5. This is likely music to the ears of recent options traders. GPS' 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.32 sits above 74% of comparable readings from the last 12 months. In other words, speculators have been buying to open puts over calls at a faster-than-usual clip of late.

  • SFUN has soared 17% to flirt with $9.23, getting a boost from China's surprise interest-rate reduction. However, the shares are still staring at a roughly 44% year-to-date deficit. As such, options traders have been betting bearishly in recent weeks, per SouFun Holdings Ltd's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.71. Not only does this reading indicate long puts have nearly doubled long calls over the past two weeks, it also ranks higher than 87% of comparable readings from the last year.

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Analysts Upgrades: Amazon.com, Inc., Keurig Green Mountain Inc, and Splunk Inc

Analysts upwardly revised their ratings on AMZN, GMCR, and SPLK

by 11/21/2014 11:01 AM
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Analysts are weighing in today on e-commerce concern Amazon.com, Inc. (NASDAQ:AMZN), java giant Keurig Green Mountain Inc (NASDAQ:GMCR), and software specialist Splunk Inc (NASDAQ:SPLK). Here's a quick roundup of today's bullish brokerage notes on AMZN, GMCR, and SPLK.

  • AMZN is up 1.2% to trade at $334.59, after being started at "buy" by Nomura. In addition, traders are weighing reports that AMZN will roll out a new, ad-supported, non-Prime streaming video service in early 2015. Longer term, the stock has shed more than 16% in 2014, but has been in rally mode lately -- outperforming the broader S&P 500 Index (SPX) by 10.2 percentage points during the last month. Helping Amazon.com, Inc. shares has been a number of recent fundamental developments. Meanwhile, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have responded to the stock's surge by buying to open calls over puts at a faster-than-usual clip. In fact, AMZN's 10-day call/put volume ratio across these exchanges is 1.63, in the 96th percentile of its annual range.

  • GMCR received a price-target hike to $140 at Roth Capital, which also reiterated its "neutral" opinion on the shares. However, this hasn't made a positive impact on the charts, with the equity 1% lower at $141.09 -- though its year-to-date advance is still more than 86%. Based on Keurig Green Mountain Inc's longer-term technical tenacity, additional bullish notes could be in store. A majority of covering analysts still rate the shares a "hold" or "strong sell," while GMCR's consensus 12-month price target of $141.90 stands at a discount to the current price. Should a few upgrades and/or additional price-target boosts come down the pike, they could provide the shares with a tailwind.

  • Finally, SPLK is sizzling on the charts, up nearly 5% at $68.16 following a third-quarter earnings beat, a raised full-year outlook, and a raft of bullish brokerage notes. In fact, no fewer than 13 analysts upped their price targets on the stock, and Jefferies initiated coverage on Splunk Inc with a "buy" rating and $89 target -- a more than 30% premium to current trading levels. This comes as bad news to short sellers. Short interest soared by 29.3% during the two most recent reporting periods, and now represents 8.4% of SPLK's outstanding float. In other words, there's plenty of sideline cash available to fuel the equity's fire.

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Analyst Downgrades: Herbalife Ltd., eBay Inc, and Pandora Media Inc

Analysts downwardly revised their ratings on HLF, EBAY, and P

by 11/21/2014 11:01 AM
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Analysts are weighing in today on nutritional supplements maker Herbalife Ltd. (NYSE:HLF), online auctioneer eBay Inc (NASDAQ:EBAY), and streaming music provider Pandora Media Inc (NYSE:P). Here's a quick roundup of today's bearish brokerage notes on HLF, EBAY, and P.

  • HLF is up 2.1% at $40.77, shrugging off a price-target cut to $74 from $80 at Barclays (which also maintained an "overweight" opinion). From a longer-term perspective, Herbalife Ltd. shares are still 48% lower year-to-date, and touched a new annual low of $36.97 on Nov. 12. In fact, HLF has shed roughly 22% of its value in November, due to a negative earnings reaction on Nov. 4. As such, it's not surprising to find pessimism running high in the options pits. The stock's Schaeffer's put/call open interest ratio (SOIR) sits at an annual peak of 2.69, implying that short-term traders haven't been more put-heavy during the past year.

  • EBAY is flirting with breakeven at $54.54, as a global rally is helping to offset negative analyst attention. Specifically, Evercore ISI downgraded EBAY to "sell" from "neutral," and cut its price target to $49 from $52. Most analysts are already in eBay Inc's bearish camp, as 17 out of 29 maintain "hold" or worse opinions. In the same vein, the stock's 10-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits at 0.96 -- just 5 percentage points from an annual high. In other words, option buyers have shown a healthier-than-usual appetite for bearish bets over bullish of late. On the charts, EBAY is just south of its year-to-date breakeven marker, and is testing support atop its 10-day moving average.

  • Finally, P is bucking the broad-market trend higher, down 0.2% at $19.37. Weighing on the shares is a price-target cut to $32 from $40 at BMO, though the brokerage firm upheld an "outperform" rating. Pandora Media Inc has dropped 27.1% in 2014, and hit an annual low of $17.55 earlier this month. Recent rebound attempts have stalled in the face of the stock's 10-week moving average, yet option buyers maintain rose-colored glasses. The security's 10-day ISE/CBOE/PHLX call/put volume ratio of 4.52 stands higher than 96% of comparable readings from the past year, pointing to accelerated call buying over put buying of late. What's more, additional bearish brokerage revisions could be in store, as 18 out of 25 analysts offer up "buy" or better opinions.

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Buzz Stocks: DISH Network Corp, Sotheby's, and SunEdison Inc

Today's stocks to watch in the news include BID, DISH, and SUNE

by 11/21/2014 10:11 AM
Stocks quoted in this article:

U.S. markets are soaring out of the gate, thanks to an interest rate cut at the People's Bank of China. In company news, today's stocks to watch include satellite TV provider DISH Network Corp (NASDAQ:DISH), auction house Sotheby's (NYSE:BID), and solar issue SunEdison Inc (NYSE:SUNE).

  • DISH has reached a short-term carriage contract extension with CBS Corporation (NYSE:CBS), allowing the former to continue carrying the latter's programming. The length of the extension has not been announced, but the two will continue to work toward a permanent solution. Following the news, DISH Network Corp has popped nearly 4% this morning to trade at $75, and earlier hit a record high of $75.29. The move higher is likely being cheered by traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). DISH has racked up a 50-day call/put volume ratio of 3.29 across these exchanges -- a reading that sits in the bullish 74th percentile of its annual range.

  • BID Chairman and CEO William Ruprecht is stepping down "by mutual agreement," following steady pressure from Third Point's Daniel Loeb for the auction house to renovate its business strategy. However, Ruprecht will remain in his positions until a replacement can be identified. The markets are responding positively to this decision, with Sotheby's spiking 8% at last check to hover near $42.35 -- though the shares are down more than 20% year-to-date. Some of today's gains may be attributable to short-covering activity, as 14.3% of the stock's float is sold short -- which would take more than a dozen days to cover, at BID's typical daily trading volume.

  • Finally, SUNE and SolarCity Corp (NASDAQ:SCTY) have reached a deal to install solar panels at roughly 400 Wal-Mart Stores, Inc. (NYSE:WMT) locations. "These projects bring us closer to fulfilling our commitment to double the number of on-site solar energy projects in U.S. stores, Sam's Clubs and distribution centers -- thereby reducing our energy expenses and generating clean energy in local communities," said Kim Saylors-Laster, WMT's vice president of energy. Shares of SunEdison Inc are moving north on the agreement, up 3.2% at $22.83; in fact, they're up a brow-raising 34% week-to-date, largely thanks to well-received M&A news from early this week. Should this technical trend continue, SUNE could benefit as option bears start hitting the exits. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.84 ranks higher than 87% of comparable readings from the past year.

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