Analyst Update: Alibaba, Panera Bread, SolarWinds

Analysts offered their two cents on BABA, PNRA, and SWI

Oct 29, 2014 at 2:55 PM
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U.S. stocks have taken a decisive turn lower this afternoon, as Wall Street weighs the Federal Open Market Committee's (FOMC) vote to end "QE3." Among equities attracting the attention of analysts are Chinese e-commerce concern Alibaba Group Holding Ltd (NYSE:BABA), fast-casual restaurateur Panera Bread Co (NASDAQ:PNRA), and tech issue SolarWinds Inc (NYSE:SWI).

  • After touching a record high in triple-digit territory on Tuesday, BABA is down 1% at $98.67. Following the end of the Wall Street freshman's "quiet period," a slew of analysts offered their two cents on Alibaba Group Holding Ltd. While most BABA underwriters initiated coverage with a "buy" or equivalent rating, Goldman Sachs took the road less traveled, offering up a "hold" suggestion and $102 price target. Meanwhile, BABA's short-term options remain popular ahead of the firm's inaugural public earnings report, slated for Tuesday morning, as the equity's 30-day at-the-money implied volatility continues to assail new heights.

  • PNRA is down 4.8% at $162.85, as traders pan the company's downwardly revised earnings guidance (subscription required). As a result, Piper Jaffray cut its price target on the stock to $125 from $135, and reiterated an "underweight" rating. The negative note is relatively rare for Panera Bread Co, which sports 11 "strong buys," compared to five lukewarm "holds" and three "strong sell" suggestions. In the options pits, meanwhile, short-term speculators have rarely been more put-biased during the past year, as PNRA's Schaeffer's put/call open interest ratio (SOIR) of 1.75 sits just 6 percentage points from an annual high.

  • Finally, SWI is up 11.7% to $47.56, and earlier notched a new annual high of $49.11, thanks to a stronger-than-expected third-quarter earnings report. Plus, Cowen and Co upped its price target on the security to $53 from $49, and said the firm is well-positioned for growth. SolarWinds Inc could benefit from a short squeeze, too, as short interest represents more than a week's worth of pent-up buying demand, at SWI's average pace of trading. Likewise, a mass exodus of option bears could add fuel to the equity's fire; the stock's SOIR of 2.04 stands higher than 97% of all other readings from the past year.
 

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