Analyst Upgrades: Amazon.com, Inc., Google Inc., and Microsoft Corporation

Analysts upwardly revised their ratings on Amazon.com, Inc. (NASDAQ:AMZN), Google Inc (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT)

by Karee Venema

Published on Apr 24, 2015 at 9:28 AM

Analysts are weighing in on e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN), tech titan Google Inc (NASDAQ:GOOGL), and software specialist Microsoft Corporation (NASDAQ:MSFT). Here's a quick roundup of today's bullish brokerage notes on AMZN, GOOGL, and MSFT.

  • AMZN is poised to pop nearly 13% out of the gate -- and to a new all-time high -- after the firm posted better-than-expected first-quarter revenue, thanks to the $1.6 billion in sales it netted from its cloud service. A number of brokerage firms were quick to weigh in on AMZN following the results. Raymond James, for example, raised its rating to "outperform" from "market perform," and set its price target at $485 -- a 24.4% premium to Thursday's settlement at $389.99. The most optimistic outlook came from J.P. Morgan Securities, which boosted AMZN to "overweight" from "neutral," and upped its price target to $535 from $375. Already this year, the stock has tacked on nearly 26%, and option traders have shown a preference for calls over puts. Specifically, Amazon.com, Inc.'s Schaeffer's put/call open interest ratio (SOIR) of 0.87 ranks lower than 67% of similar readings taken in the past year, meaning short-term traders are more call-heavy than usual.
  • To the delight of option traders, GOOGL is up 4.2% in electronic trading, after the company's first-quarter earnings -- despite falling short of analysts' estimates -- showed an increase in paid clicks. Additionally, exiting Chief Financial Officer Patrick Pichette waxed optimistic on the speed with which YouTube is growing. The news was met with a round of upbeat analyst attention, including price-target hikes at Deutsche Bank (to $670) and Credit Suisse (to $690), both representing expected moves into uncharted territory. Cantor, meanwhile, cut its price target by $10 to $625, which still sits 12.1% above last night's close at $557.46. Heading into today's session, optimism was already high toward a stock that's up 13.6% since hitting an annual low of $490.91 in mid-January. In fact, 84% of analysts maintain a "buy" or better rating toward Google Inc, with not a single "sell" to be found.
  • MSFT's stronger-than-forecast fiscal third-quarter earnings and subsequent round of bullish brokerage attention have the shares trading 5% higher ahead of the bell -- and on track to close north of their 60-week moving average for the first time since late February. Chiming in on the stock was Nomura, which upped its rating to "buy" from "neutral." RBC and Pacific Crest, meanwhile, raised their price targets to $50, while Cowen and Company increased its target price to $49. Technically speaking, the shares have shed 13.4% since tagging a 14-year high of $50.04 in November -- and settled last night at $43.34 -- and option traders have been growing increasingly skeptical over the course of the month. During the past two weeks, specifically, Microsoft Corporation's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio has jumped to 1.26 from 0.51. What's more, the current ratio rests just 1 percentage point below a 52-week peak, meaning puts have been bought to open over calls at a near-annual-high clip.

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