Schaeffer's Trading Floor Blog

Analyst Upgrades: Salesforce.com, Tyco International, and DreamWorks Animation

Analysts upwardly revised their ratings on CRM, TYC, and DWA

by 9/20/2012 9:03 AM
Stocks quoted in this article:

Analysts are weighing in today on cloud computing firm Salesforce.com, inc. (NYSE:CRM - 157.98), diversified products provider Tyco International Ltd. (NYSE:TYC - 55.16), and animated film producer DreamWorks Animation SKG, Inc (NASDAQ:DWA - 17.71). Here's a quick roundup of today's bullish brokerage notes.

  • CRM -- which sports a year-to-date advance of about 56% -- scored several price-target hikes ahead of the open. Specifically, BMO lifted its price target to $190 from $170, while Jefferies and Credit Agricole also issued upward price adjustments. However, the brokerage love doesn't stop there, as the stock currently boasts 27 "buy" or better endorsements, compared to just four "hold" or worse suggestions. Meanwhile, the equity's Schaeffer's Volatility Index (SVI) of 35% ranks higher than just 10% of similar readings gathered over the past year -- implying that short-term options are relatively cheap at the moment.

  • Barclays started coverage of TYC with an "overweight" recommendation earlier this morning, which could add to the security's year-over-year gain of more than 25%. Despite this show of technical strength, traders are still showing an affinity for puts over calls, as evidenced by the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.18. In other words, puts bought to open have outpaced calls during the past two weeks. This ratio arrives in the 79th annual percentile, meaning speculators have been purchasing puts over calls at a faster-than-usual pace.

  • Despite a 52-week loss of about 6%, DWA was upgraded to "neutral" from "sell" at Janney in pre-market activity. The stock has also underperformed the broader S&P 500 Index (SPX) by close to 18 percentage points during the past 40 sessions. Meanwhile, skeptics have been zeroing in on the equity, as short interest has ramped up by about 11% during the past two reporting periods. These bearish bets now account for a hefty 28% of the security's available float. In fact, it would take 28 days to buy back these shorted shares, at DWA's average pace of trading.

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