Analyst Update: Apple, Whole Foods Market, Yelp

Analysts adjusted their ratings on Apple Inc. (AAPL), Whole Foods Market, Inc. (WFM), and Yelp Inc (YELP)

Oct 26, 2015 at 12:54 PM
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Analysts are weighing in today on tech giant Apple Inc. (NASDAQ:AAPL), natural and organic grocer Whole Foods Market, Inc. (NASDAQ:WFM), and online review site Yelp Inc (NYSE:YELP). Here's a quick roundup of today's brokerage notes on AAPL, WFM, and YELP.

  • Cowen and Company reiterated a "market perform" rating and $135 price target for AAPL a day ahead of the Dow tech behemoth's earnings report. In addition, Apple Inc. supplier Dialog Semiconductor plummeted in Europe after reporting lackluster earnings, setting an ominous tone. This combo of news has AAPL leading the Dow laggards, down 2.7% at $115.87. Still, option players have taken a shine to AAPL calls in recent sessions, with volume running at 1.5 times the average intraday clip  -- echoing activity from Friday. However, this affinity for bullish bets is relatively new, as AAPL's 50-day put/call volume ratio on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) comes in at 0.71, in the 93rd percentile of its annual range. Analysts take a bullish lean toward AAPL, as 20 of the 30 brokerages tracking the firm rate it a "buy" or better. 
  • Citing "competitive pressure," Cowen and Company cut WFM's price target to $35 from $40 -- sending the shares 4.7% lower to $30.77. Shares of Whole Foods Market, Inc. have shed roughly 39% in 2015, and are dangerously close to a three-year low of $30.18, tagged Aug. 24.  Option buyers are betting on even more downside for WFM, as its 10-day put/call volume ratio on the ISE/CBOE/PHLX of 2.14 sits at a 52-week high. Likewise, short interest represents more than six sessions' worth of pent-up buying demand, at the equity's average pace of trading.
  • YELP has jumped 7.5% to $24.27 -- but is bumping against familiar resistance in the $25 region -- with help from a Cantor Fitzgerald note. The brokerage stated that although "YELP has been a material underperformer in the last 12 months," it expects Yelp Inc to report "solid" third-quarter earnings Wednesday night, thanks to "healthy" traffic and local ad revenue growth. Technically, YELP has had a rough 12 months, losing more than half its value. Option buyers seem to have turned a blind eye to the stock's underperformance. YELP's 50-day call/put volume ratio on the ISE, CBOE, and PHLX checks in at 3.36 -- higher than 91% of the readings taken in the past year. Capitulation from this bullish bunch could force the stock lower. What's more, short-term traders are paying a pretty penny for their bets, as the equity's Schaeffer's Volatility Index (SVI) sits at an annual high of 85%.
For other stocks in analysts' crosshairs, read Analyst Upgrades: Paypal Holdings Inc, Costco Wholesale Corporation, and Schlumberger Limited and Analyst Downgrades: American Express Company, Ambarella Inc, and Groupon Inc.

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