Analyst Upgrades: Southwest Airlines, Cisco, Starbucks

Analysts upwardly revised their ratings on LUV, CSCO, and SBUX

Dec 8, 2014 at 9:12 AM
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Analysts are weighing in today on air travel provider Southwest Airlines Co (NYSE:LUV), tech titan Cisco Systems, Inc. (NASDAQ:CSCO), and coffee king Starbucks Corporation (NASDAQ:SBUX). Here's a quick roundup of today's bullish brokerage notes on LUV, CSCO, and SBUX.

  • LUV is pointed 1.2% higher ahead of the bell, after Goldman Sachs upgraded the stock to "buy" from "neutral," and hiked its price target to $55 from $44. The brokerage firm waxed optimistic on the airline industry as a whole, doling out several price-target increases, but said Southwest Airlines Co looks poised to outperform its peers. LUV has already been outpacing the broader S&P 500 Index (SPX) over the past few months, and has skyrocketed more than 118% in 2014. In fact, the shares tagged a record high of $42.52 one week ago, before settling last week at $41.12. Additional upwardly revised price targets could be on the horizon for LUV, as the consensus stands at $46 -- representing expected upside of only 11.9% to the stock's current perch.

  • CSCO notched a seven-year high of $27.99 last week, and analysts at BMO think there's even more fuel in the tank. The brokerage firm lifted its price target by $2 to $30, and reiterated an "outperform" endorsement. The shares finished Friday at $27.50, as traders weighed news that the U.S. Supreme Court will review Cisco Systems, Inc.'s patent infringement fight with Commil USA, LLC, in which the latter's favorable ruling was overturned by an appellate court. CSCO is now testing support atop its 10-day moving average, which launched the stock higher following a test in mid-November.

  • Finally, SBUX earned a price-target hike to $97 from $88 at Jefferies, which also underscored its "buy" recommendation. Furthermore, Goldman Sachs resumed coverage of Starbucks Corporation with a "conviction buy" rating and a $95 price target -- representing a premium of 13.7% to SBUX's current perch at $83.57, and in territory not yet charted by the shares. Late last week, the Seattle stalwart unveiled a five-year growth plan that included doubling domestic food sales and expanding into delivery. The news sent SBUX to a record high of $83.92 in intraday action on Friday, and the equity's uptrend could spook short-term options traders. The security's Schaeffer's put/call open interest ratio (SOIR) of 1.17 stands in the 85th percentile of its annual range, suggesting near-term traders are more put-heavy than usual right now.
 

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