Analyst Update: Avago Tech, Amex, Town Sports

Analysts adjusted their ratings on Avago Technologies Ltd (AVGO), American Express Company (AXP), and Town Sports International Holdings, Inc. (CLUB)

Feb 26, 2015 at 12:06 PM
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Analysts are weighing in today on semiconductor firm Avago Technologies Ltd (NASDAQ:AVGO), blue chip American Express Company (NYSE:AXP), and fitness club operator Town Sports International Holdings, Inc. (NASDAQ:CLUB). Here's a quick look at today's brokerage notes on AVGO, AXP, and CLUB.

  • Last night, AVGO announced it is acquiring Emulex Corporation (NYSE:ELX) for $8 per share in cash (or more than $600 million total), and released an earnings report highlighted by impressive second-quarter profits and triple-digit revenue growth. In response, no fewer than 16 brokerage firms upped their price targets on Avago Technologies Ltd, boosting the shares to a fresh all-time high of $129.25 before settling at $127.82, for a 13.4% gain so far on the day. Drilling down, the loftiest price target came from RBC, which hiked its target to $150, followed by Morgan Stanley, Brean Capital, Sterne Agee, and Canaccord Genuity, which all lifted their price targets to $145. AVGO has advanced about 27.1% so far in 2015, and accordingly, calls are popular in the stock's options pits -- over the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 4.13 AVGO calls have been bought to open for every put.

  • Yesterday, a spokeswoman for AXP said the company has raised interest rates on several credit card accounts by an average of 2.5 percentage points, prompting Deutsche Bank to lift its price target on the security to $90 from $88, and its rating to "buy" from "hold." On the charts, the shares are up nearly 1.2% this morning to trade at $83.11, chipping away at a 10.7% year-to-date deficit. Despite American Express Company's recent technical woes, bullish sentiment is popular in the stock's options pits. Specifically, AXP's 10-day ISE/CBOE/PHLX call/put volume ratio of 2.54 sits just 7 percentage points away from the highest similar reading taken over the past year.

  • CLUB also had a big day in the news yesterday, as the company released a disappointing fourth-quarter earnings report and announced that it might put itself up for sale. Reacting was Craig-Hallum, which upped its price target to $6 while reiterating a "hold" opinion, sending the shares up 6.4% to reach $7.18. Looking back, Town Sports International Holdings, Inc. has been in recovery mode, with the shares up 79% since hitting a multi-year low of $4.01 on Aug. 12. Not surprisingly, call activity has reached fever pitch in the options pits, as CLUB's Schaeffer's put/call open interest ratio (SOIR) of 0.11 is its lowest reading taken over the past year. Simply stated, near-term speculators have never been more call-skewed over the past 12 months.

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