Analyzing recent option activity ahead of earnings from Adobe Systems Incorporated (ADBE), Bob Evans Farms Inc (BOBE), and FedEx Corporation (FDX)
Among the stocks
preparing to unveil earnings are software concern
Adobe Systems Incorporated (NASDAQ:ADBE), breakfast baron
Bob Evans Farms Inc (NASDAQ:BOBE), and package maven
FedEx Corporation (NYSE:FDX). Below, we'll take the pre-earnings temperature of ADBE, BOBE, and FDX.
- ADBE has generally been strong following its earnings reports in the past, posting positive post-earnings sessions after five of its last eight reports. When the company reported in mid-March, though, the stock gave back 3.5% in the subsequent session. Ahead of the firm's earnings release this evening, the options market is pricing in a 5.6% swing for Adobe Systems Incorporated, based on straddle data. Traders have been turning bearish ahead of the event. For one, ADBE's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 1.37, higher than 82% of readings from the past year. Plus, short interest increased over 31% during the most recent two-week reporting period. All of this comes despite the security's 9.8% year-to-date rise to hover near $79.81 -- within striking distance of its late-May all-time peak of $80.74.
- BOBE's fiscal fourth-quarter numbers will be released after the close today, and shareholders are hoping things go better than the last two times the company reported, when shares dropped a respective 22.3% and 14.1% in the subsequent session. This time around, the options market is pricing in an 8.9% post-earnings swing -- relatively in line with the stock's historical moves. Also, Bob Evans Farms, Inc.'s short-term options are trading at relatively normal prices ahead of the event, from a volatility perspective. This, according to BOBE's Schaeffer's Volatility Index (SVI) of 40%, which lands in the middling 49th percentile of its annual range. At last check, the stock is 0.1% lower at $47.79.
- From a long-term technical outlook, FDX has been strong, adding almost 30% year-over-year to trade at $181.85 -- and approaching last week's record high of $185.19. Option traders expect more gains in the near term, as call buying has been popular ahead of the company's fiscal fourth-quarter earnings release, scheduled for tomorrow morning. FedEx Corporation's 10-day ISE/CBOE/PHLX call/put volume ratio has jumped to 1.54 from 0.49 since the start of June -- which ranks in the 69th annual percentile. The market is expecting a 3.1% end-of-week swing after FDX reports, which is more or less in line with its recent post-earnings performances. That is, it's averaged a 2.7% single-session move following its last eight earnings releases.