Analyst Upgrades: Alibaba Group, AIG, Activision Blizzard

Analysts issued bullish brokerage notes on BABA, AIG, and ATVI

Nov 5, 2014 at 9:22 AM
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Analysts are upwardly revising their ratings on Chinese e-commerce concern Alibaba Group Holding Ltd (NYSE:BABA), insurance issue American International Group Inc (NYSE:AIG), and gaming guru Activision Blizzard, Inc. (NASDAQ:ATVI). Here's a quick look at today's bullish brokerage notes on BABA, AIG, and ATVI.

  • A slew of brokerage firms weighed in on BABA, following yesterday's earnings-induced record-setting run. Included in the group were Raymond James, which boosted its price target by $5 to $120, and Pacific Crest, which upped its outlook by $2 to $127 -- with both brokerages underscoring their "outperform" recommendations. Since going public on Sept. 19, shares of Alibaba Group Holding Ltd have soared 14.4% to their current perch at $106.07, so it's no surprise to see sentiment among option traders tilted toward the bullish side. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, speculators have bought to open 3.13 calls for every put over the past 10 sessions.

  • Following AIG's turn in the earnings confessional Monday night, KBW raised its price target on the stock to $60 from $59, while Morgan Stanley set its target price at the same round-number mark. The brokerage firms also maintained their respective "market perform" and "equal weight" ratings. The stock has made modest headway in 2014, up 4.6% to trade at $53.40. Option traders are expecting a breakout, though, as evidenced by the equity's 10-day ISE/CBOE/PHLX call/put volume ratio of 6.29, which ranks in the bullishly skewed 96th percentile of its annual range. Echoing this is AIG's Schaeffer's put/call open interest ratio (SOIR) of 0.78, which ranks lower than 60% of similar readings taken in the past year. In other words, short-term speculators are more call-skewed than usual toward American International Group Inc.

  • ATVI received a pair of upbeat brokerage notes, after the company posted a better-than-expected third-quarter earnings report and upwardly revised its full-year forecast. Specifically, Jefferies raised its price target to $27 from $26, while Wedbush upped its target price by $1 to $31. (CRT Capital, meanwhile, followed in the footsteps of Brean Capital by cutting its price target to $25 from $27, but reiterating its "buy" rating.) Against this backdrop, shares of Activision Blizzard, Inc. are pointed 5.5% higher ahead of the bell, after closing last night at $19.95. Today's projected price movement is just more of the same for a stock that's rallied nearly 21% year-over-year, and option traders have surely taken notice. At the ISE, CBOE, and PHLX, the equity's 50-day call/put volume ratio of 5.14 ranks just 7 percentage points from an annual optimistic peak. Additionally, ATVI's SOIR of 0.39 ranks higher than 31% of other such readings taken over the last 12 months.

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