Analyst Upgrades: AOL, Cisco Systems, Groupon Inc

Analysts upwardly revised their ratings on AOL, CSCO, and GRPN

Dec 1, 2014 at 8:51 AM
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Analysts are weighing in today on Internet services provider AOL, Inc. (NYSE:AOL), networking heavyweight Cisco Systems, Inc. (NASDAQ:CSCO), and daily deals marketer Groupon Inc (NASDAQ:GRPN). Here's a quick roundup of today's bullish brokerage notes on AOL, CSCO, and GRPN.

  • AOL was initiated with a "buy" rating and $67 price target at Monness Crespi Hardt, despite the shares sitting 1% below breakeven on a year-to-date basis. On Friday, the stock settled at $46.16, just a hair's breadth north of its supportive 10-day moving average, at $46.02. Elsewhere, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open puts over calls at a faster-than-usual pace in recent months. AOL, Inc.'s 50-day put/call volume ratio across those exchanges checks in at 0.93, or 11 percentage points shy of a 12-month peak.

  • UBS lifted its price target on CSCO to $30.50 from $28, while underscoring its "buy" recommendation. This bullish brokerage note is well-deserved, considering the shares have rallied 30% year-over-year to perch at $27.64. On the other hand, speculators at the ISE, CBOE, and PHLX have displayed a healthier-than-usual appetite for long puts over calls of late, per Cisco Systems, Inc.'s 50-day put/call volume ratio of 0.93 -- in the 98th percentile of its annual range. A capitulation among these skeptical bettors could create tailwinds for the shares.

  • Finally, GRPN saw its rating upwardly revised to "buy" from "neutral" at BofA-Merrill Lynch. This is hardly surprising, as the stock has surged 25.7% since reporting earnings in late October, closing at $7.53 on Friday. Additional upgrades could in the cards, too, as Groupon Inc currently sports 11 tepid "hold" ratings compared to seven "strong buys" -- suggesting potential upside, from a contrarian perspective. What's more, 23.2% of the equity's float is sold short, which would take about four sessions to buy back, at GRPN's typical trading volume. In other words, there's plenty of sideline cash available to spark a short-covering rally.
 

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