Analyst Update: Virgin America, TriNet, and Cisco

Analysts adjusted their ratings on Virgin America Inc (VA), TriNet Group Inc (TNET), and Cisco Systems, Inc. (CSCO)

Aug 4, 2015 at 12:21 PM
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Analysts are weighing in today on air carrier Virgin America Inc (NASDAQ:VA), human resources concern TriNet Group Inc (NYSE:TNET), and information technology company Cisco Systems, Inc. (NASDAQ:CSCO).

  • VA is in the news today after BofA-Merrill Lynch upgraded the air carrier to "buy" from "underperform," and lifted its price target to $41 from $32. The brokerage noted that Virgin America Inc "has shown that its unit revenues can outperform the industry's, given its product offering and exposure to San Francisco, Los Angeles, and New York." This follows last week's earnings report, where VA topped expectations. Technically, the stock has had a good month, increasing nearly 37% from its July 8 low of $26.53 to trade at $36.27. Today's news has the stock nearly 8% higher, helping further the equity's ascending pattern. Short sellers may be feeling the heat, as 13.6% of VA's float is sold short. At typical trading levels, it would take more than four days for these bears to buy back their pessimistic positions.  

  • After the closing bell sounded yesterday, TriNet Group Inc disappointed the Street when it announced second-quarter adjusted earnings of 14 cents per share. Analysts expected TNET to report earnings of 27 cents per share. In the wake of this disappointment, several brokerages decided to downwardly revise their opinions. William Blair lowered its rating on TNET to "market perform" from "outperform," while price-target cuts were levied by Deutsche Bank (to $24), J.P. Morgan Securities (to $24), and Stifel (to $26). This parade of negative attention sent TNET spiraling to an all-time low of $14.82, and it was last seen down 33.2% at $17.83. This is a welcome development for traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), who have been wagering on losses. TNET's 50-day put/call volume ratio of 11.58 ranks in the 98th annual percentile.

  • Today's analyst update concludes with Dow component Cisco Systems, Inc. -- which was started at "underperform" by Macquarie last night, with a price target of $26. CSCO is 0.6% lower today at $28.20. However, the shares are currently resting atop support from their 40-week moving average, a trendline that has ushered the security north in recent weeks. On the sentiment front, CSCO's consensus 12-month price target comes in at $31.32 – which is only 11% higher than the equity's current position. With the support from the aforementioned trendline, it appears that the stock is in a good position to make a run at this target. Should CSCO topple it, upward price-target revisions could materialize.

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