Schaeffer's Trading Floor Blog

Analyst Update: Twitter Inc, SeaWorld Entertainment Inc, and E2open Inc

Analysts adjusted their ratings on TWTR, SEAS, and EOPN

by 9/11/2014 1:08 PM
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Analysts are weighing in today on microblogging site Twitter Inc (NYSE:TWTR), amusement park operator SeaWorld Entertainment Inc (NYSE:SEAS), and cloud-based software provider E2open (NASDAQ:EOPN). Here's a quick look at today's brokerage notes on TWTR, SEAS, and, EOPN.

  • Canaccord Genuity began coverage on TWTR with a "buy" rating and a price target of $62, after the company said on Wednesday that it plans to raise up to $1.5 billion through debt offerings. Analysts are split on Twitter Inc, as 15 out of 27 maintain "hold" or worse recommendations. Right now, the stock is up 1.1% at $53.47, having rallied 81.1% from its early May low of $29.51. As TWTR's positive price action continues, the shares could easily continue to attract more bullish brokerage notes.

  • SEAS has tacked on almost 2% today to trade at $21.09, after Macquarie raised its rating on the equity to "outperform" from "neutral." Most analysts aren't feeling too optimistic toward the stock, as SeaWorld Entertainment Inc's consensus 12-month price target sits at $22.27, representing a 5.3% premium to the stock's current perch. Plus, five out of eight brokerage firms have doled out "hold" or worse ratings. Calls have been picked up at an accelerated clip, however, according to the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), where the equity's 10-day call/put volume ratio is at 8.29. Shares of SEAS are off approximately 27% year-to-date, but they've been slowly edging higher from their mid-August post-earnings low of $17.83.

  • Shares of EOPN have plunged today, after last night's fiscal first-quarter revenue miss and lackluster full-year forecast, and earlier hit a new all-time low of $10.45. The company received a stream of bearish brokerage notes from no fewer than five firms. Needham cut its rating to "hold" from "buy," Pacific Crest downgraded the shares to "sector perform" from "outperform," and Northland Capital cut the equity to "market perform" from "outperform." Meanwhile, Canaccord Genuity and Benchmark both issued price-target cuts (to $16 and $14, respectively). Right now, the stock sits at $10.91 -- a drop of 30% for the day, landing EOPN on the short-sale restricted list. The security is now down more than 54% year-to-date. li>

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Stocks On the Move: Lululemon Athletica inc., Gogo Inc, and Finisar Corporation

LULU, GOGO, and FNSR are moving sharply in Thursday's trading

by 9/11/2014 12:02 PM
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Around midday, three of the top market movers are yoga apparel maker Lululemon Athletica inc. (NASDAQ:LULU), in-flight Internet provider Gogo Inc (NASDAQ:GOGO), and optical components expert Finisar Corporation (NASDAQ:FNSR). Here's a quick roundup of how LULU, GOGO, and FNSR are performing on the charts so far.

  • LULU is flying higher today, up 16.4% to trade at $44.68, after posting a fiscal second-quarter earnings beat and raising its forward guidance. Still, the shares face a more than 24% year-to-date deficit, and are currently testing resistance at their 32-week moving average. Not surprisingly, short sellers have flocked to Lululemon Athletica inc in recent months. More than one-fifth of the stock's float is sold short, which would take roughly 12 sessions to buy back, at the equity's average daily trading levels.

  • GOGO has tacked on 7% to hover near $18.17, on news of a joint venture with T-Mobile US Inc (NYSE:TMUS). Longer-term, however, the equity is struggling -- down nearly 27% in 2014 -- and is currently facing overhead resistance in the form of its 160-day trendline. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open nearly 80 calls for every put on Gogo Inc over the last two weeks, yielding a 10-day call/put volume ratio of 79.24 -- good for the 97th percentile of its annual range. However, some of these long calls -- especially at out-of-the-money strikes -- may have been initiated by short sellers seeking protection, as 27.5% of GOGO's float is sold short.

  • FNSR has rallied nearly 8% today to $18.66, in sympathy with sector peer JDS Uniphase Corp (NASDAQ:JDSU) -- which is surging on spinoff news. Nevertheless, Finisar Corporation has performed poorly this year, losing about 22% of its value. On the sentiment front, analysts are surprisingly optimistic on the stock, with eight out of 13 doling out a "buy" or better opinion, versus five "holds" and not a single "sell" rating. Plus, FNSR's consensus 12-month price target of $21.64 stands at a 16% premium to the current share price.

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Analyst Downgrades: Crocs, Inc., Macy's, Inc., and Yamana Gold Inc. (USA)

Analysts downwardly revised their ratings on CROX, M, and AUY

by 9/11/2014 9:25 AM
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Analysts are weighing in today on plastic shoe maker Crocs, Inc. (NASDAQ:CROX), department store chain Macy's, Inc. (NYSE:M), and commodity concern Yamana Gold Inc. (USA) (NYSE:AUY). Here's a quick roundup of today's bearish brokerage notes on CROX, M, and AUY.

  • CROX is pointed 3.6% lower in pre-market action, after Buckingham Research downgraded the stock to "neutral" from "buy." Since its post-earnings bull gap in late July, Crocs, Inc. has shed almost 10% of its value, ending at $15.04 on Wednesday. The shares are now testing their mettle atop their 200-day moving average, which has acted as a steady foothold for CROX in 2014. Short sellers are gambling on more downside for the equity, as short interest jumped 30% during the past two reporting periods, and now represents nearly seven sessions' worth of pent-up buying demand, at CROX's average pace of trading.

  • M is poised to drop 1.5%, after settling at $59.59 yesterday, as traders mull a downgrade to "neutral" from "buy" at Sterne Agee. Macy's, Inc. has stair-stepped 11.6% higher in 2014, and touched a record high of $63.10 in late August, but has since taken a breather. While most analysts are in the bullish camp -- 10 out of 13 offer up "buy" or better opinions -- options traders have been picking up puts over calls at an accelerated clip. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.49 stands higher than 83% of all other readings from the past year.

  • Finally, AUY closed at $7.33 on Wednesday -- not far from annual-low territory -- after the company temporarily suspended ramp-up activities at its C1 Santa Luz project. The shares of Yamana Gold Inc. (USA) are headed lower out of the gate today, after Morgan Stanley, Credit Suisse, and Raymond James trimmed their price targets to $10.70, $10.50, and $10, respectively. Earlier this week, GMP downgraded the stock to "hold" from "buy," and there could be more on the way. Despite underperforming the broader S&P 500 Index (SPX) by more than 20 percentage points during the past month, AUY still boasts 10 "buy" or better recommendations, compared to one tepid "hold" and one "strong sell."

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Buzz Stocks: JDS Uniphase Corp, MasterCard Inc, and RadioShack Corporation

Today's stocks to watch in the news include JDSU, MA, and RSH

by 9/11/2014 9:24 AM
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Futures are sagging ahead of the bell, after President Barack Obama last night committed the U.S. to an international fight against the Islamic State. In company news, today's stocks to watch include networking equipment maker JDS Uniphase Corp (NASDAQ:JDSU), credit card issue MasterCard Inc (NYSE:MA), and electronics retailer RadioShack Corporation (NYSE:RSH).

  • JDSU announced it will split into two publicly traded companies by spinning off its optical components and commercial lasers unit from its software and services division. The firm projected the spinoff will lower costs by roughly $50 million, and allow the two resulting companies to focus on more specific objectives. In the wake of the news, RBC raised its outlook on the security to "outperform" from "sector perform." Taking a step back, shares of JDS Uniphase Corp have languished, losing nearly 20% year-over-year to their current perch at $12.10, but are up nearly 14% ahead of the bell. Meanwhile, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have grown increasingly optimistic. The stock's 10-day call/put volume ratio across these exchanges is a brow-raising 102.78, with more than 100 calls bought to open for every put during the last two weeks. What's more, this reading ranks in the 100th percentile of its annual range, suggesting the preference for bullish bets over bearish has never been stronger.

  • The European Union's (EU) highest court ruled against MA yesterday, upholding the EU's ban on cross-border card fees. The decision could encourage European governments to cap credit- and debit-card fees -- a lucrative revenue source for MasterCard Inc. On the charts, shares of the credit card giant have struggled, losing 8.3% this year to trade at $76.65. Nevertheless, the brokerage bunch is bullish on MA, handing out 15 "buy" or better recommendations, versus eight "holds" and not a single "sell" recommendation. Should the shares continue to sputter, a round of downgrades could pressure the stock lower.

  • Finally, RSH is plummeting this morning, down about 10% following its latest earnings miss and continued same-store-sales struggles. As a result, the retailer is currently exploring a number of strategic alternatives, including debt restructuring, consolidation of its stores, and possibly bankruptcy. Shares of RadioShack Corporation are down more than 64% this year at $0.93, and in the options pits, short-term traders have displayed a pronounced preference for puts over calls. Specifically, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.14 sits at an annual put-skewed extreme.

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Analyst Upgrades: Intel Corporation, General Electric Company, and Chipotle Mexican Grill, Inc.

Analysts upwardly revised their ratings on INTC, GE, and CMG

by 9/11/2014 9:00 AM
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Analysts are weighing in today on tech titan Intel Corporation (NASDAQ:INTC), fellow blue chip General Electric Company (NYSE:GE), and restaurant issue Chipotle Mexican Grill, Inc. (NYSE:CMG). Here's a quick roundup of today's bullish brokerage notes on INTC, GE, and CMG.

  • INTC -- which settled at $35.02 on Wednesday -- saw its price target lifted to $35 from $33 at Canaccord Genuity. However, the brokerage firm maintained a lukewarm "hold" opinion of Intel Corporation, which has rallied nearly 35% in 2014, and touched a 12-year high of $35.56 earlier this week. In fact, despite outperforming the broader S&P 500 Index (SPX) by 13 percentage points during the past three months, just half the analysts following INTC deem it worthy of a "buy" or better rating. Furthermore, the consensus 12-month price target of $33.85 represents a discount to the stock's current perch. Additional price-target hikes or a round of upgrades could help INTC extend its quest for decade-plus highs.

  • J.P. Morgan Securities upped its price target on GE by $1 to $28, but upheld a "neutral" rating. On the charts, the shares have surrendered 7.4% year-to-date, ending at $25.95 on Wednesday, and have come under recent pressure from their formerly supportive 200-day moving average. Off the charts, General Electric Company recently announced the sale of its appliance business, and has grown increasingly popular among put buyers. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 0.35 stands higher than 78% of all other readings from the past year, pointing to a healthier-than-usual appetite for long puts over calls during the past two weeks.

  • Finally, Janney raised its price target on CMG by $25 to $800 -- more than 100 points above the stock's current all-time high -- and offered up a "buy" endorsement. Since its post-earnings bull gap in late July, Chipotle Mexican Grill, Inc. has been range-bound on the charts, dawdling between $670 and $690. The security is currently perched at the lower end of this range, at $671.36. Meanwhile, option buyers have been picking up puts over calls with a vengeance. On the ISE, CBOE, and PHLX, the stock's 10-day put/call volume ratio of 1.99 sits just 6 percentage points from an annual peak.

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