Analyst Upgrades: Staples, Achillion Pharma, Francesca's

Analysts upwardly revised their ratings on SPLS, ACHN, and FRAN

Dec 11, 2014 at 9:26 AM
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Analysts are weighing in today on office supplier Staples, Inc. (NASDAQ:SPLS), drugmaker Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN), and boutique retailer Francesca's Holdings Corp (NASDAQ:FRAN). Here's a quick roundup of today's bullish brokerage notes on SPLS, ACHN, and FRAN.

  • SPLS is set to surge more than 10% out of the gate, after Starboard Value LP said it took a stake of roughly 5.1% in the stock. In addition, Starboard confirmed that it upped its position in SPLS sector peer Office Depot Inc (NASDAQ:ODP) to roughly 10%, fueling speculation about a future merger. Against this backdrop, Morgan Stanley upgraded Staples, Inc. to "equal weight" from "underweight." In light of SPLS' anticipated bull gap north of $16, the stock will be in positive year-to-date territory for the first time in 2014. Additional upgrades could add fuel to the equity's fire, as not one of the 14 analysts following SPLS deems it worthy of a "buy" endorsement. On Wednesday, the stock settled at $14.81, its loftiest close since mid-January.

  • ACHN is headed for a more modest upside move of 1.5%, after landing at $13.40 yesterday. Bolstering the shares in pre-market action was a price-target hike to $12 from $10 at Credit Suisse, though the brokerage firm maintained a lukewarm "neutral" opinion. Achillion Pharmaceuticals, Inc. has been stair-stepping higher since mid-June, and has more than quadrupled in value in 2014, thanks to support from its 10- and 20-week moving averages. While nine out of 10 analysts already offer up "strong buy" opinions, the stock's consensus 12-month price target of $13 represents a discount to its current perch, suggesting more upwardly revised price targets could be in store.

  • Finally, after a volatile session, FRAN bucked the broad-market trend lower yesterday, eking out a fractional gain post-earnings to close at $15.16. Buckingham is banking on more upside for the stock, lifting its price target to $19 from $18, and reiterating a "buy" recommendation. Meanwhile, Mizuho Securities upped its price target by $1 to $15, but underscored a "neutral" opinion. On the charts, Francesca's Holdings Corp has added nearly 20% in December, thanks to a bull gap in the wake of a CEO shake-up on Dec. 5. Short sellers remain skeptical, though, as short interest accounts for 17.3% of FRAN's available float, representing 12 sessions' worth of pent-up buying demand, at the security's average pace of trading.
 

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