Blue-Chip Stock Earns Bull Note Ahead of Earnings Report

A sentiment shift in the options pits could boost CRM

Digital Content Manager
Aug 19, 2021 at 3:10 PM
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One of the biggest names scheduled to step into the earnings confessional next week is Slesforce.com (NYSE:CRM). The company is expected to report second-quarter results after the close on Wednesday, Aug. 25, but is already attracting analyst attention ahead of the event. Specifically, BofA Global Research raised the equity's price target to $300 from $285, which helped shares add 0.9% to trade at $ $253.41 this afternoon. Below, we will explore CRM's previous post-earnings activity and performance to determine what we can expect next.

Salesforce.com stock is now trading at its highest level since November. The shares have experienced their fair share of volatility over the past year, though the 60-day moving average has contained several of the equity's pullbacks since March. Year-over-year, CRM is up 23.5%.

CRM 60 Day

Over the last two years, the blue-chip stock has had a generally negative history of post-earnings reactions, finishing just three of these eight next-day sessions higher. However, it did post a 26% pop this time last year. This time around, options traders are pricing in a 7.5% post-earnings swing for the security, which is slightly higher than the 7.1% move CRM averaged after its last eight reports, regardless of direction. 

The security could benefit from a shift in the options pits, which lean bearish. This is per CRM'S Schaeffer's put/call volume ratio (SOIR), which sits higher than 86% of readings in its annual range. This indicates short-term traders have rarely been more put-biased.

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