Analyst Update: Aruba Networks, Priceline, Verizon

Analysts offered their two cents on ARUN, PCLN, and VZ

Andrea Kramer
Nov 24, 2014 at 1:28 PM
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U.S. stocks are flat in early afternoon action, as traders sit on the sidelines amid a holiday-shortened week. Among equities attracting the attention of analysts are tech concern Aruba Networks, Inc. (NASDAQ:ARUN), travel site Priceline Group Inc (NASDAQ:PCLN), and telecom issue Verizon Communications Inc. (NYSE:VZ).

  • ARUN is 1.6% higher at $19.12, paring a portion of Friday's 13.7% post-earnings plunge. In fact, Raymond James waxed optimistic on Aruba Networks, Inc., predicting the company will "grow 17% this fiscal year" -- outpacing expected industry growth -- "while expanding margins at the same time." As such, the brokerage firm upgraded ARUN to "outperform" from "market perform," overshadowing a downgrade to "underperform" from "neutral" at BofA-Merrill Lynch. In the wake of last week's bear gap, ARUN's 14-day Relative Strength Index (RSI) dropped to 31 -- on the cusp of oversold territory, suggesting a short-term rebound may have been in the cards. Meanwhile, most analysts remain devoted to ARUN, as 11 out of 21 maintain "buy" or better opinions.

  • PCLN is 0.4% higher at $1,156.01, after Credit Suisse launched coverage with an "outperform" rating. Priceline Group Inc's sector peers weren't so fortunate, with Orbitz Worldwide, Inc. (NYSE:OWW) and HomeAway, Inc. (NASDAQ:AWAY) earning new "neutral" opinions. On the charts, PCLN is just south of its year-to-date breakeven level, with recent rally attempts stalling in the $1,200 neighborhood -- home to the equity's 40-week moving average. Nevertheless, Wall Street remains upbeat, as 16 out of 17 analysts offer up "buy" or better endorsements. Plus, the consensus 12-month price target of $1,334.60 represents expected upside of 15.4% to the stock's current perch, and stands in territory not explored since mid-March.

  • Finally, VZ has shed 1.7% to linger near $49.35 -- and is in danger of ending south of $50 for the first time this month -- after a downgrade to "neutral" at Citigroup. The negative note is relatively rare for Verizon Communications Inc., which boasts 17 "strong buys" and two "buy" ratings, compared to five lukewarm "holds" and not a single "sell." Echoing that optimism, option buyers have been upping the bullish ante on VZ, even though the Dow component has lagged the blue-chip barometer in 2014. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 5.24 sits just 1 percentage point from a 12-month peak. In other words, option traders have picked up VZ calls over puts at a near-annual-high clip during the past two weeks.

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