Schaeffer's Trading Floor Blog

Analyst Upgrades: VMware, Inc., Texas Instruments, and Constellation Brands

Analysts upwardly revised their ratings on VMW, TXN, and STZ

by 2/25/2013 8:42 AM
Stocks quoted in this article:

Analysts are weighing in today on cloud-computing issue VMware, Inc. (NYSE:VMW - 72.38) , semiconductor stock Texas Instruments Incorporated (NASDAQ:TXN - 34.18), and beer & wine giant Constellation Brands, Inc. (NYSE:STZ - 43.96). Here's a quick roundup of today's bullish brokerage notes.

  • Despite a loss of more than 23% so far this year, VMW was upgraded to "neutral" from "sell" at Citigroup ahead of the opening bell. However, despite this vote of confidence from the brokerage bunch, there is still plenty of skepticism hovering over the stock. Short interest on VMW spiked by about 16% during the past two reporting periods, and now these bearish bets account for a lofty 16% of the equity's available float. It would take more than two days to cover these shorted shares, at the security's average daily trading volume.

  • TXN scored a price target hike to $39 from $37 at Wedbush Securities today, following Friday's news that the company will lift its quarterly dividend by 33%, and ramp up its share-buyback program by $5 billion. The stock sports a year-to-date gain of close to 11%, yet puts have an edge over calls in the short-term options pits, as evidenced by TXN's Schaeffer's put/call open interest ratio (SOIR) of 1.21. This ratio ranks higher than 86% of similar annual readings, meaning near-term traders have been more put-heavy toward the equity just 14% of the time during the past year.

  • Up a whopping 104% on a year-over-year basis, STZ was initiated with a "buy" rating and a price target of $60 at SunTrust Robinson Humphrey this morning. Nevertheless, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day put/call volume ratio of 1.99, indicating puts bought to open have nearly doubled calls during the last two weeks. This ratio arrives in the 67th percentile of its annual range, signaling traders have been scooping up bearish options over bullish at an accelerated clip.

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