Analyst Update: Alibaba, Five Below, and Yelp Inc

Analysts adjusted their ratings on Alibaba Group Holding Ltd (BABA), Five Below Inc (FIVE), and Yelp Inc (YELP)

Oct 28, 2015 at 1:53 PM
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Analysts are weighing in today on Chinese Internet issue Alibaba Group Holding Ltd (NYSE:BABA), specialty retailer Five Below Inc (NASDAQ:FIVE), and online review site Yelp Inc (NYSE:YELP). Here's a quick roundup of today's brokerage notes on BABA, FIVE, and YELP.

  • BABA made news yesterday thanks to its earnings report, and the stock has jumped another 2.3% to $81.21 today -- on pace for its highest close since late July. Today alone, Alibaba Group Holding Ltd has earned a slew of upbeat analyst attention, including price-target hikes to $89 from $85 at Deutsche Bank, to $98 from $92 at Brean, to $110 from $100 at Bernstein, and to $103 from $96 at BofA-Merrill Lynch. These moves could lead to some pressure in the option pits, as BABA'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 0.81, higher than 92% of the readings taken in the past 52 weeks.  
  • FIVE is 6.7% lower at $32.14 this afternoon, following a downgrade to "sell" from "neutral" at Goldman Sachs. The brokerage also cut Five Below Inc's price target to $30 from $34. Technically, the retailer has hit a rough patch -- dropping 22.5% since hitting $41.47 near the end of June. This performance has caught the attention of short sellers and option players alike. Nearly 19% of FIVE's float is sold short, representing almost 17 sessions' worth of pent-up buying demand, at the equity's average daily trading volume. Turning to option players, the security's 10-day put/call volume ratio of 1.38 on the ISE/CBOE/PHLX is higher than 80% of the readings taken in the past year.
  • YELP is set to reveal quarterly earnings after the closing bell, and Roth Capital took this opportunity to start coverage of the stock with a "sell" rating and $17.50 price target -- approaching three-year-low territory. The shares of Yelp Inc are 2.7% lower at $22.28, bringing their year-to-date loss to more than 59%. Despite this poor performance, YELP's 50-day call/put volume ratio of 2.75 on the ISE/CBOE/PHLX is higher than 83% of the readings taken in the past year. Should Yelp go the way of sector peer Twitter Inc (NYSE:TWTR), a lackluster earnings report could shake loose some option bulls. 
For other stocks in analysts' crosshairs, read Analyst Upgrades: Apple Inc., Gilead Sciences, Inc., and Walgreens Boots Alliance Inc and Analyst Downgrades: Peabody Energy Corporation, Macrocure Ltd, and Twitter Inc.

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