Earnings Preview: First Solar, Visa, and Exxon Mobil

Analyzing recent option activity ahead of earnings from First Solar, Inc. (NASDAQ:FSLR), Visa Inc (NYSE:V), and Exxon Mobil Corporation (NYSE:XOM)

Apr 29, 2015 at 3:18 PM
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Among the stocks gearing up to report earnings tomorrow are solar panel maker First Solar, Inc. (NASDAQ:FSLR), as well as blue chips Visa Inc (NYSE:V) and Exxon Mobil Corporation (NYSE:XOM). Below, we'll take the pre-earnings temperature of FSLR, V, and XOM. 
 
  • The shares of FSLR have rebounded 59% since hitting an annual low of $39.18 on Jan. 20, last seen hovering at $62.30. However, puts have been popular in the options pits, as First Solar, Inc.'s 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.66 is higher than 73% of all similar readings from the past year. On the earnings front, the stock enjoyed a 7% post-earnings gain in late February, and has moved an average of 6.7% in the session immediately following its last four earnings reports. FSLR's near-term straddle, meanwhile, is pricing in a 6.4% swing. Traders are paying relatively fair prices for their near-term bets on the equity, as its 30-day at-the-money implied volatility of 44% stands in the 53rd percentile of its annual range. 
  • On the other hand, the shares of have taken a step back recently. Although the stock notched an all-time high of $69.98 last week -- due in part to a decision by the Chinese government to open their credit market to Visa Inc and competitor MasterCard Inc (NYSE:MA) -- it has since pulled back roughly 4% to $67.29. Heading into today's session, traders have shown a preference for calls over puts, as V's 50-day ISE/CBOE/PHLX call/put volume ratio of 1.63 stands in the 95th percentile of its annual range. Elsewhere, the security has moved an average of 5.4% in the session immediately following its last four earnings reports. After V steps into the earnings limelight tomorrow, the options market expects the equity to move 3.4% by Friday's close, per its near-term straddle. Short-term option players are paying up to place bets, as V's Schaeffer's Volatility Index (SVI) of 28% is the highest similar reading from the past 12 months. 
  • XOM has been in recovery mode, with the shares up 6% from their March 13 two-year low of $82.68 to linger near $87.65. However, the stock is now staring up at potential resistance from its 20-week moving average, which has ushered XOM lower since its late July peak. Sentiment in the options pits has been bullish, as Exxon Mobil Corporation's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.14 is higher than 72% of all equivalent readings from the last year. On the earnings front, XOM has experienced an average post-earnings swing of 2.6% in the session immediately after its last four trips to the earnings confessional. According to the stock's near-term straddle, the options market is pricing in a move of 2.2% this go-around. Speculators are paying relatively attractive prices for their near-term bets on XOM, as its SVI of 20% reads in the 41st percentile of its annual range. 
 

  

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