Analyst Upgrades: Adobe Systems, Lululemon, and Ctrip.com

Analysts upwardly revised their ratings on Adobe Systems Incorporated (NASDAQ:ADBE), Lululemon Athletica inc. (NASDAQ:LULU), and Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)

by Karee Venema

Published on Oct 7, 2015 at 9:20 AM
Updated on Jul 20, 2020 at 3:17 PM

Analysts are weighing in on software specialist Adobe Systems Incorporated (NASDAQ:ADBE), yoga apparel maker Lululemon Athletica inc. (NASDAQ:LULU), and online travel issue Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP). Here's a quick roundup of today's bullish brokerage notes on ADBE, LULU, and CTRP.

  • ADBE's downwardly revised 2016 profit forecast has done little to shake the enthusiasm of analysts, with the stock receiving price-target hikes from FBR (to $87), Deutsche Bank (to $90), and Susquehanna (to $97). (Evercore ISI, meanwhile, lowered its target price to $95, although this still represents an expected move to uncharted territory). While the shares are off 2.7% in electronic trading, they have tacked on an impressive 17.1% in 2015, and settled last night at $85.15 -- within a stone's throw of their Aug. 18 record peak of $87.25. Should Adobe Systems Incorporated resume its longer-term uptrend, a capitulation from option bears could translate into a fresh burst of buying power. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ADBE's 50-day put/call volume ratio of 0.79 ranks in the 76th annual percentile. In other words, puts have been bought to open over calls at a quicker-than-usual clip.

  • Citigroup initiated coverage on LULU with an upbeat "buy" rating, sending the shares 3% higher ahead of the bell. Analysts have been quick to issue upwardly revised ratings toward a stock that's spent the past two weeks bouncing from the round-number $50 mark -- and closed last night at $51.74 -- but skepticism remains stiff elsewhere on the Street. Specifically, short interest jumped nearly 21% in the two most recent reporting periods, and now accounts for more than 23% of Lululemon Athletica inc.'s available float. An unwinding of these bearish bets could help LULU extend its recent rebound.

  • CTRP has had a standout year, tacking on nearly 51% to trade at $68.65. The stock is positioned to continue this rally today, thanks to an upgrade to "buy" from "neutral" at BofA-Merrill Lynch. Option traders have been taking note of this positive price action in recent weeks. At the ISE, CBOE, and PHLX, for example, Ctrip.com International, Ltd.'s 10-day call/put volume ratio of 5.10 sits higher than 84% of all comparable readings taken in the past year. With a healthy 7.3% of the equity's float sold short, though, some of this call buying may be a result of shorts hedging against more upside.
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