Schaeffer's Trading Floor Blog

Analyst Update: Visa, Cree, and Zillow

Analysts adjusted their positions on V, CREE, and Z

by 12/13/2012 11:14 AM
Stocks quoted in this article:

Stocks are listlessly moving around the breakeven level in late-morning action, as the Dow looks to battle back from yesterday's narrow defeat. Here's a quick update on today's latest brokerage notes, including adjustments for credit card behemoth Visa Inc (NYSE:V – 147.94), semiconductor manufacturer Cree, Inc. (NASDAQ:CREE - 33.62), and online real estate site Zillow Inc (NASDAQ:Z - 28.21).

  • V is trying to make the most of this morning's bullish analyst note, as Oppenheimer lifted its price target by $20 to $170 and kept its "outperform" rating. Though fractionally higher at last look, the shares have charged more than 45% higher in 2012, and an even more impressive 53.5% over the past 52 weeks. While the brokerage bunch maintains a mostly bullish view -- 22 out of 28 analysts have doled out "buy" or better recommendations -- not all sentiment is of the optimistic variety. V's Schaeffer's put/call open interest ratio (SOIR) of 1.35 confirms that puts outweigh calls among options slated to expire within three months. This ratio ranks in the 74th percentile of its annual range, suggesting that short-term options players have rarely been more put-heavy during the past year.

  • CREE, on the hand, has taken a 1.7% hit today following a downgrade to "neutral" from "buy" at B Riley. But this pullback has done little to disrupt the stock's impressive run on the charts, which now sits at a 53% gain 53% year-to-date. From a shorter-term perspective, CREE has outperformed the S&P 500 Index (SPX) by more than 35 percentage points during the past two months. Although the options pits seem to be upbeat, there appears to be plenty of pessimism levied against the security. Short interest inched higher over the most recent reporting period, and now accounts for 15.5% of the CREE's available float. Furthermore, it would take nearly 12 sessions to repurchase all of these shorted shares, which could result in a short-covering rally.

  • Finally … Barclays adjusted its stance on Z, holding onto its "equal weight" rating but cutting its price target to $32 from $35. This target is well below the consensus 12-month price target of $39.38, which is a 39% premium to Z's current trading price. Today's news has knocked the stock lower, taking a bite out of its 27% 2012 return, and upping the potential for additional target reductions. Looking closer at the charts reveals a firm level of distress for Z, as the $29-$30 region hovers above. This area has acted as a technical cap since the security's earnings-induced bearish gap on Nov. 6.

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