Analyst Upgrades: General Motors, Gigamon, The Gap

Analysts upwardly revised their ratings on General Motors Company (GM), Gigamon Inc (GIMO), and Gap Inc (GPS)

Apr 10, 2015 at 9:24 AM
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Analysts are weighing in today on automotive concern General Motors Company (NYSE:GM), IT issue Gigamon Inc (NYSE:GIMO), and clothing retailer Gap Inc (NYSE:GPS). Here's a quick roundup of today's bullish brokerage notes on GM, GIMO, and GPS.

  • Citigroup placed GM on its "Citi Focus List" while doling out a "buy" rating, sending the shares about 1% higher in electronic trading. The analyst note comes after General Motors Company said that it will invest $1 billion in its Warren Technical Center, which could potentially bring 2,500 jobs to the Detroit area. Furthermore, the company announced that it is promoting Niharika Taskar Ramdev to Chief Financial Officer for its international unit, and that Dhivya Suryadevara will replace her as Vice President, Finance and Treasurer. On the charts, the shares of GM have rebounded 25.9% from their Oct. 15 annual low of $28.82 to close yesterday at $36.29. However, traders have been picking up puts over calls at an accelerated pace, as GM's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.90 stands in the 85th percentile of its annual range. Mirroring this indicator is the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.77, which is higher than 88% of all equivalent readings taken over the past year. Said another way, short-term traders have rarely been this put-heavy on GM, and a capitulation of bears in the options pits could result in tailwinds.

  • William Blair raised its opinion on GIMO to "outperform" from "market perform." The upgrade comes as little surprise, considering the shares of Gigamon Inc have advanced 20.9% year-to-date to finish Thursday at $21.43, and notched a new annual high of $22.21 on Wednesday. What's more, the stock could take out that high out of the gate, with the shares headed for a 5% gain. Despite this impressive technical performance, puts have been a popular choice in the options pits. Specifically, over the past 50 days at the ISE/CBOE/PHLX, 1.35 GIMO puts have been bought to open for every call, which is a higher ratio than 97% of all similar readings taken over the past 12 months. The brokerage bunch has been skeptical of the equity as well, as two-thirds of covering analysts rate it a "hold."

  • GPS woke up to a pair of analyst upgrades this morning, after the company posted an increase in March same-store sales. Drilling down, Mizuho raised its price target by $3 to $46, while Janney hiked its price target by $1 to $43 (both brokerage firms underscored a "neutral" rating). Looking back, Gap Inc is up 20.5% since notching an annual low of $35.46 on Oct. 16, to finish yesterday at $42.73. In the options pits, puts have still garnered notable attention lately, as GPS' 50-day ISE/CBOE/PHLX put/call volume ratio of 1.85 stands in the 96th percentile of its annual range. Meanwhile, the brokerage bunch is lukewarm at best on the security, as 72% of covering analysts rate the shares a "hold" or worse. Additionally, GPS' average 12-month price target of $43.22 is spitting distance from current trading levels, implying that additional price-target hikes and/or upgrades could be on the way. Ahead of the bell, GPS is little changed.

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