Analyst Upgrades: GrubHub Inc, CarMax, Inc, and Container Store Group Inc

Analysts upwardly revised their ratings on GrubHub Inc (NYSE:GRUB), CarMax, Inc (NYSE:KMX), and Container Store Group Inc (NYSE:TCS)

by Karee Venema

Published on Jul 8, 2015 at 9:23 AM
Updated on Jul 8, 2015 at 9:24 AM

Analysts are weighing in on food delivery specialist GrubHub Inc (NYSE:GRUB), used car concern CarMax, Inc (NYSE:KMX), and organization issue Container Store Group Inc (NYSE:TCS). Here's a quick roundup of today's bullish brokerage notes on GRUB, KMX, and TCS.

  • Analysts have taken a glass-half-full approach to GRUB, and this morning, Northland initiated coverage on the stock with an "outperform" rating. The security doesn't appear poised to capitalize much on this upbeat outlook -- it's fractionally higher electronic trading, after closing last night at $30.98. Longer term, GrubHub Inc has surrendered nearly 15% in 2015, and hit a record low of $29.68 last Thursday. However, Sterne Agee CRT this morning opined that "the recent pullback provides an attractive entry point for investors." In the options pits, meanwhile, put buyers have been more active than usual. GRUB's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.50 ranks in the 83rd annual percentile.

  • Goldman Sachs boosted its rating on KMX to "buy" from "neutral," citing optimism over current conditions and longer-term opportunities. However, concerns over a "lower market multiple" prompted the brokerage firm to lower its price target to $78 from $80 -- which still represents a 17.1% premium to Monday's settlement at $66.60, and a move into uncharted territory. Option traders, meanwhile, have been quick to initiate long calls over puts, per KMX's 50-day ISE/CBOE/PHLX call/put volume ratio of 1.76, which sits higher than 96% of all similar readings taken in the past year. Echoing this is CarMax, Inc's Schaeffer's put/call open interest ratio (SOIR) of 0.63, which rests 2 percentage points from a 52-week low. Simply stated, short-term speculators have rarely been as call-skewed as they are now.

  • TCS is up 6.3% ahead of the bell, after the firm's smaller-than-expected first-quarter loss was met with price-target hikes from Jefferies (to $16), Sterne Agee CRT (to $18), and Credit Suisse (to $20). Today's projected price move could provide a much-needed boost for a stock that's down more than 35% year-over-year to trade at $17.50. It could also serve a sting to short sellers. Although short interest dropped 4.2% in the latest reporting period, these bearish bets still account for 23% of Container Store Group Inc's float -- or 30.1 times the average daily trading volume.
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