Earnings Preview: Juniper, American Airlines, AstraZeneca

Analyzing recent option activity ahead of earnings from Juniper Networks, Inc. (JNPR), American Airlines Group Inc (AAL), and AstraZeneca plc (ADR) (AZN)

Apr 23, 2015 at 1:41 PM
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Among the stocks gearing up to report earnings are tech concern Juniper Networks, Inc. (NYSE:JNPR), airline issue American Airlines Group Inc. (NASDAQ:AAL), and biotech firm AstraZeneca plc (ADR) (NYSE:AZN). Below, we'll take the pre-earnings temperature of JNPR, AAL, and AZN.

  • JNPR is up nearly 30% since notching an annual low of $18.41 on Oct. 15 to linger near $23.91 -- just shy of recent resistance in the $24.50 region. In today's session, though, the shares of Juniper Networks, Inc. are down 2% ahead of tonight's trip to the earnings confessional. In the options pits, traders have been more put-skewed than usual, as JNPR's Schaeffer's put/call open interest ratio (SOIR) of 2.42 is the highest such reading from the past year. Simply stated, near-term traders have never been this put-heavy on the stock over the past 12 months. On the earnings front, JNPR has spent three of the last four post-earnings sessions in the red. The stock's near-term straddle is pricing in a 3.5% move in either direction; JNPR has staged a single-session post-earnings swing of 6%, on average, over the past eight quarters. Short-term options on JNPR are available for relatively fair prices, as its Schaeffer's Volatility Index (SVI) of 34% ranks in the 57th percentile of its annual range.
  • AAL shares are down about 9% from their Jan. 26 all-time high of $56.20 to hover at $51.22. American Airlines Group Inc is in favor with the brokerage bunch, though, as 77% of covering analysts rate it a "buy" or better, with the remaining 23% doling out lukewarm "hold" opinions. Furthermore, AAL will release first-quarter earnings tomorrow morning. Meanwhile, the stock suffered a 5% post-earnings dip in January, and has made a move of 4.2%, on average, after its last five earnings reports. The equity's near-term straddle is pricing in a move of 3.9%. Traders are paying historically deflated prices for their near-term bets on the stock, as AAL's SVI of 43% is higher than 42% of all equivalent readings from the past year. 
  • The shares of AZN have been range-bound since mid-2014, with rally attempts stalling in the $74-$75 neighborhood. The stock is down 0.5% at $73 today, as the company prepares to release earnings tomorrow morning. Traders have favored puts over calls in the options pits, as AstraZeneca plc's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.30 is higher than 93% of all equivalent readings from the past 12 months. Historically, AZN hasn't achieved a positive post-earnings session since August 2013. The security has averaged a single-session move of 1.3% after reporting, but this time around, its near-the-money straddle is pricing in a 3.6% swing. Near-term options are available for historically inexpensive prices, as AZN's SVI of 21% stands in the 20th percentile of its annual range. 

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