Analyst Update: JPMorgan Chase, Comcast, King Digital

Analysts are weighing in on JPM, CMCSA, and KING

Nov 12, 2014 at 1:42 PM
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Markets have pared a portion of their earlier losses, and were last seen lingering close to breakeven. Meanwhile, among equities attracting the attention of analysts are financial firm JPMorgan Chase & Co. (NYSE:JPM), broadcasting giant Comcast Corporation (NASDAQ:CMCSA), and gaming guru King Digital Entertainment PLC (NYSE:KING).

  • JPM is taking a hit today, after a handful of large global lenders were slapped with a multi-billion-dollar forex-manipulation fine. Stoking the day's bearish bias is a downgrade to "market perform" from "outperform" at Bernstein. At last check, shares of JPM were off 1.5% to trade at $60.45 -- and on pace to close south of their 10-day moving average for the first time since Oct. 20. Option traders could be cheering today's retreat, considering they've been initiating long puts over calls on JPMorgan Chase & Co. at a rapid-fire rate in recent weeks. In fact, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.59 ranks just 1 percentage point from a 52-week peak.

  • CMCSA is shrugging off a downgrade to "hold" from "buy" at Maxim, which cited the potential for "expensive regulatory restrictions" in the company's proposed merger with Time Warner Cable Inc (NYSE:TWC). Also, unlike sector peer CBS Corporation (NYSE:CBS), CMCSA was last seen 1.1% higher at $53.56. Longer term, however, CMCSA has tallied an uninspiring 3.1% year-to-date gain, yet option traders are keeping the faith. At the ISE, CBOE, and PHLX, for instance, the equity's 10-day call/put volume ratio of 4.78 ranks higher than 70% of similar readings taken in the past year, meaning calls have been bought to open over puts at a faster-than-usual clip. Echoing this is Comcast Corporation's Schaeffer's put/call open interest ratio (SOIR) of 0.52, which ranks in the 30th percentile of its annual range. Simply stated, short-term speculators are more call-heavy than usual toward CMCSA.

  • Cowen and Company waxed optimistic on KING and sector peer Glu Mobile Inc. (NASDAQ:GLUU), saying their "successes are representative of the better game development, marketing and support that King and Glu are able to deliver relative to their peers." KING is capitalizing on these upbeat words today (while GLUU is not) and was last seen up 1.7% at $14.01. Today's positive price action marks a change of pace for a stock that's surrendered nearly 32% since going public in late March, so it's no surprise to see sentiment tilted toward the skeptical side. Short interest, for example, accounts for one-quarter of the stock's available float, and would take more than nine sessions to cover, at average daily trading levels. Plus, more than two-thirds of covering analysts maintain a tepid "hold" suggestion toward King Digital Entertainment PLC.


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