Earnings Preview: Boeing Co, Facebook Inc, and Paypal Holdings Inc

Boeing Co (NYSE:BA), Facebook Inc (NASDAQ:FB), and Paypal Holdings Inc (NASDAQ:PYPL) will all report earnings tomorrow

by Karee Venema

Published on Apr 26, 2016 at 1:26 PM

It's a busy week on the earnings front, with Wall Street digesting the latest reports from such notable names Procter & Gamble Co (NYSE:PG) and Freeport-McMoRan Inc (NYSE:FCX) in today's session. Looking ahead to tomorrow's lineup, Dow component Boeing Co (NYSE:BA), tech firm Facebook Inc (NASDAQ:FB), and eBay Inc (NASDAQ:EBAY) spinoff Paypal Holdings Inc (NASDAQ:PYPL) are all set to report their first-quarter results. Here's a closer look at the options activity surrounding BA, FB, and PYPL ahead of their respective earnings reports.

BA will unveil its results bright and early tomorrow morning, with the options market pricing in a 5.6% single-session post-earnings move -- more than the 3.5% the stock has averaged over the past eight quarters. Options traders, meanwhile, have been loading up on long puts in the past two weeks, per BA's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.39 -- in the 60th annual percentile. On the charts, Boeing Co has rallied almost 30% since hitting a two-year low of $102.10 in February to trade at $132.26, and is currently sandwiched between support from its 30-day moving average and resistance from its 120-day trendline.

Earnings from social media firms are starting to hit the Street this week, with FB slated to take its turn in the confessional tomorrow night. Put traders have been active in the weeks leading up to the scheduled event, per FB's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.63 -- in the 84th percentile of its annual range. Those purchasing the stock's near-term options are paying a relatively pricey premium, too. Specifically, FB's Schaeffer's Volatility Index (SVI) of 41% rests in the 61st annual percentile, while its 30-day at-the-money implied volatility of 38.7% sits higher than 75% of all comparable readings taken in the past year. In other words, premium on Facebook Inc's short-term options is currently pricing in elevated volatility expectations. Technically, FB is up 33.5% year-over-year to $109.34, and is within striking distance of its Feb. 2 all-time high of $117.59.

PYPL has turned in a tremendous technical performance in recent months, up more than 29% from its Jan. 20 year-to-date low of $30.52. What's more, at its present perch of $39.58, the stock is sitting just below its July 20 record peak of $42.55. Pre-earnings options traders have been betting on more upside, too. Over the past 10 sessions, specifically, speculators have bought to open 19,642 calls, versus 3,518 puts. In the session subsequent to reporting in January, the stock rallied an impressive 8.4% -- and shed a modest 1.7% following its late-October results. This time around, the options market is pricing in a lofty 10.2% single-session post-earnings swing for Paypal Holdings Inc, which will report after tomorrow's close.

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