Analyst Upgrades: CVS Health, Salix Pharma, VeriFone

Analysts upwardly revised their ratings on CVS, PAY, and SLXP

Dec 17, 2014 at 9:27 AM
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Analysts are weighing in today on pharmacy chain CVS Health Corp (NYSE:CVS), drug developer Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP), and electronic payments facilitator VeriFone Systems Inc (NYSE:PAY). Here's a quick roundup of today's bullish brokerage notes on CVS, SLXP, and PAY.

  • Following yesterday's announcement of a new share buyback program, CVS has been on the receiving end of price-target hikes from no fewer than seven analysts. The most ambitious among them is Guggenheim, which is targeting a move up to $110 -- a record high -- and calling the stock a "buy." Taking a step back, CVS Health Corp has run 29% higher this year to settle at $92.31 yesterday, so it shouldn't come as any surprise that Wall Street is behind the stock. Sixteen out of 19 covering analysts rate the shares a "buy" or better -- compared to three "holds" and not a single "sell" -- while less than 1% of CVS' float is sold short.

  • SLXP said yesterday it will clear excess inventory by the end of 2015 (subscription required) -- a year earlier than expected -- prompting a round of bullish brokerage attention overnight. In fact, no fewer than five analysts upped their price targets, including a $30 boost to $147 at Canaccord Genuity, which also reaffirmed its "buy" assessment on the equity. Meanwhile, Salix Pharmaceuticals, Ltd. has tacked on roughly 30% year-over-year to trade at $110.11, but has failed to win over options traders. Speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open close to four puts for every call during the last two weeks, yielding a 10-day put/call volume ratio of 3.96 -- in the 98th annual percentile. Given SLXP's technical tenacity, a portion of these put purchases may have been at the hands of shareholders hedging against a pullback.

  • Finally, a post-earnings rush of bullish brokerage attention on PAY is continuing this morning, with the shares scoring an upgrade to "overweight" from "equal weight" at Barclays, as well as an $11 price-target boost to $47. On the charts, the stock has provided plenty of reasons for such optimism, advancing 28% year-to-date to perch at $34.34, assisted by support from its 50-week moving average. In recent weeks, however, short sellers have increasingly set their sights on VeriFone Systems Inc. Specifically, short interest rose 43.5% during the latest reporting period to more than 4 million shares -- though this represents less than 4% of PAY's total float.
 

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