Analyst Update: AbbVie, Yamana Gold, ON Semiconductor

Analysts offered their two cents on ABBV, AUY, and ONNN

Oct 31, 2014 at 1:43 PM
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U.S. stocks are assailing new heights at midday, as Wall Street cheers a surprise stimulus package from Japan's central bank. Among equities attracting the attention of analysts are drugmaker AbbVie Inc (NYSE:ABBV), commodity concern Yamana Gold Inc. (USA) (NYSE:AUY) and electronics component producer ON Semiconductor Corp (NASDAQ:ONNN).

  • ABBV is among the equities exploring all-time peaks, topping out at $63.99 earlier in the session. The shares were last seen 4.2% higher at $63.76, after the firm recorded higher-than-expected quarterly sales and upped its full-year earnings guidance (subscription required). Since testing its 200-day moving average -- and killing its deal to merge with Shire PLC (ADR) (NASDAQ:SHPG) -- earlier this month, AbbVie Inc has advanced more than 20%. Cowen and Company sees even more upside in ABBV's future, upping its price target by $2 to $65, and reiterating an "outperform" rating. Options players, on the other hand, could be hitting the exits after today's earnings beat. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have picked up ABBV puts over calls at an annual-high margin of 1.18-to-1 over the past two weeks.

  • AUY is bucking the broad-market trend higher, down 7.6% at $4.12. What's more, the gold miner touched a near-six-year low of $3.80 earlier, as gold stocks swoon in sympathy with the precious metal. Like a few of its sector peers yesterday, Yamana Gold Inc. (USA) is feeling the heat from analysts. Cowen and Company trimmed its price target to $6.69 from $7.36, Credit Suisse cut its target to $7.50 from $10, and Barclays reduced its outlook to $7. However, the former two maintained "outperform" ratings, while the latter kept its "overweight" recommendation. Should AUY extend its downward momentum -- the security has surrendered more than half its value in 2014 -- a flood of downgrades could exacerbate selling pressure. Currently, the stock boasts nine "buy" or better endorsements, compared to two "holds" and just one "strong sell."

  • Finally, ONNN is up 2.6% at $8.22, as encouraging comments about the health of the semiconductor industry has overshadowed a weaker-than-expected quarterly earnings report. Analysts' reactions are mixed, with Morgan Stanley upping its price target to $8 from $7.50 -- but maintaining an "underweight" rating -- and no fewer than four other brokerage firms reducing their targets. From a longer-term perspective, ON Semiconductor Corp is now flirting with breakeven on a year-to-date basis, and is up 21.5% since touching an annual low of $6.76 earlier this month. While short interest expanded by 32.5% during the past two reporting periods, these bearish bets represent less than a day's worth of pent-up buying demand, at ONNN's average pace of trading.


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