Analyst Upgrades: American Eagle, Time Warner, Gilead

Analysts upwardly revised their ratings on AEO, TWX, and GILD

Dec 9, 2014 at 9:16 AM
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Analysts are weighing in today on retailer American Eagle Outfitters (NYSE:AEO), media mogul Time Warner Inc (NYSE:TWX), and drugmaker Gilead Sciences, Inc. (NASDAQ:GILD). Here's a quick roundup of today's bullish brokerage notes on AEO, TWX, and GILD.

  • AEO is headed higher in pre-market action, after Oppenheimer upgraded the stock to "outperform" from "market perform." The upbeat attention is relatively rare for the stock, with just six out of 21 analysts offering up "buy" or better endorsements. Plus, short interest accounts for 18.4% of American Eagle Outfitters' total available float, and would take almost a week to buy back, at the equity's average pace of trading. On the charts, AEO has surrendered nearly 13% so far in December, due to last Friday's post-earnings gap lower. The shares settled at $12.27 yesterday, marking a second straight close beneath their formerly supportive 200-day moving average.

  • TWX is also pointed higher ahead of the bell, after Goldman Sachs lifted its price target to $96 from $90, and underscored a "conviction buy" opinion. Most analysts are already in Time Warner Inc's bullish camp, as the stock boasts 20 "buy" or better ratings, compared to three "holds" and not a single "sell." On the other hand, options buyers have been picking up TWX puts over calls at an annual-high clip during the past 10 weeks on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). However, the growing affinity for long puts could be protective in nature, as shareholders try to lock in gains in the wake of TWX's ascent. The stock has added 24.7% in 2014, landing at $83.33 on Monday.

  • Finally, Morgan Stanley lifted its price target on GILD to $100 from $81, and reiterated an "equal weight" opinion. However, the upwardly revised target still represents a discount to Gilead Sciences, Inc.'s current perch of $105.56. Technically speaking, GILD has soared 40.6% year-to-date, and recently bounced off round-number support at the century mark. However, the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.03 stands higher than 76% of all other readings from the past year, suggesting short-term options traders are more put-heavy than usual -- though the sentiment tides could be shifting.

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