Analyst Update: Target Corporation, Lions Gate Entertainment Corp. (USA), and Potash Corp./Saskatchewan (USA)

Analysts are weighing in on TGT, LGF, and POT

by Karee Venema

Published on Nov 10, 2014 at 2:48 PM
Updated on Apr 20, 2015 at 5:32 PM

Major market indexes have edged their way to fresh record peaks today. Among equities attracting the attention of analysts are retailer Target Corporation (NYSE:TGT), entertainment issue Lions Gate Entertainment Corp. (USA) (NYSE:LGF), and fertilizer firm Potash Corp./Saskatchewan (USA) (NYSE:POT).

  • Stifel raised its outlook on TGT to "buy" from "hold," and set its price target at $76 -- in record-high territory. "Our checks suggest more-vibrant store traffic and marketing could be occurring just as 4Q easy comparisons roll around," said the brokerage firm. Additionally, Stifel waxed optimistic on TGT's store-closing plan, saying "Reverse cannibalization is the new growth (with e-commerce trends) and we believe this will be well-received." TGT is responding to the upbeat outlook, and was last seen 1.9% higher at $65.39. Should the shares continue to rebound -- TGT has rallied more than 18% from its late-May low of $55.25 -- another round of upgrades and/or price-target hikes could be on the horizon. At present, three-quarters of analysts covering the stock maintain a "hold" or worse rating, while the consensus 12-month price target of $59.33 stands at a discount to current trading levels. On the fundamental front, Target Corporation will report third-quarter earnings before the open on Wednesday, Nov. 19, and today, unveiled early access to its Black Friday deals.

  • LGF is also higher this afternoon -- up 3.7% at $34.70 -- after Goldman Sachs raised its price target to $35 from $34 (although the brokerage firm underscored its tepid "neutral" rating). The stock has gained ground since taking a sharp bounce off its 140-day moving average in mid-October, and has tacked on almost 20%. Option traders have shown a bigger-than-usual preference for puts over calls, though, as evidenced by LGF's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.46, which ranks in the bearishly skewed 68th annual percentile. Echoing this is the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.69, which ranks higher than 95% of similar readings taken in the past year, meaning short-term speculators have rarely been as put-heavy toward Lions Gate Entertainment Corp. as they are now.

  • POT has tacked on 0.9%, and moved into positive year-to-date territory along the way, after Susquehanna boosted its price target by $2 to $31, and reiterated its "neutral" rating. On the sentiment front, Wall Street remains mixed toward the broad-market laggard. In the options pits, the stock's 50-day ISE/CBOE/PHLX put/call volume ratio of 0.61 ranks in the 90th percentile of its annual range, meaning puts have been bought to open over calls with more rapidity just 10% of the time within the past year. Elsewhere, four "strong buy" ratings are levied toward Potash Corp./Saskatchewan (USA), versus 11 lukewarm "holds" and two "strong sells. Meanwhile, the consensus 12-month price target of $41.21 stands at a 24% premium to the equity's current perch at $33.17 -- and in territory not charted since June 2013.

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