Schaeffer's Trading Floor Blog

Analyst Upgrades: Starbucks, Gilead Sciences, and Home Depot

Analysts upwardly revised their ratings on SBUX, GILD, and HD

by 11/9/2012 9:01 AM
Stocks quoted in this article:

Analysts are weighing in today on coffee chain Starbucks Corporation (NASDAQ:SBUX - 50.86), biopharmaceutical company Gilead Sciences, Inc. (NASDAQ:GILD - 64.85), and home improvement retailer The Home Depot, Inc. (NYSE:HD - 60.86). Here's a quick roundup of today's bullish brokerage notes.

  • SBUX was upgraded to "buy" from "hold" at Argus ahead of the opening bell, after announcing yesterday that 7,000 of its stores are now accepting Square Wallet's mobile payment application. The equity has gained nearly 17% during the past year, which may be luring bullish traders to the options pits. The stock's 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio checks in at 1.91, indicating calls bought to open have nearly doubled puts during the past month.

  • GILD -- which boasts a year-over-year gain of more than 61% -- was started at Guggenheim with a "buy" recommendation this morning. The stock has also outperformed the broader S&P 500 Index (SPX) by nearly 15 percentage points during the past 60 sessions, but that hasn't stopped skeptics from converging on GILD. Short interest on the security jumped by a hefty 41% during the last two reporting periods, and now accounts for a respectable 4% of the equity's available float. It would take more than three days to unwind these bearish bets, at GILD's average pace of trading.

  • With quarterly earnings rapidly approaching, HD saw its price target lifted to $56 from $51 at Jefferies today, which could add to the equity's 52-week gain of roughly 64%. Nevertheless, near-term put players have taken a shine to the stock lately. Schaeffer's put/call open interest ratio (SOIR) for HD sits at 1.48, confirming puts comfortably outpace calls among options scheduled to expire in the next three months. This ratio is docked in the 59th percentile of its annual range, reflecting a stronger-than-usual preference for short-term puts over calls.

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