Analyst Upgrades: Microsoft Corporation, J C Penney Company Inc, and Flextronics International Ltd.

Analysts upwardly revised their ratings and price targets on Microsoft Corporation (NASDAQ:MSFT), J C Penney Company Inc (NYSE:JCP), and Flextronics International Ltd. (NASDAQ:FLEX)

by Karee Venema

Published on Jan 29, 2016 at 9:29 AM
Updated on Jan 29, 2016 at 9:35 AM

Analysts are weighing in on software giant Microsoft Corporation (NASDAQ:MSFT), retailer J C Penney Company Inc (NYSE:JCP), and semiconductor concern Flextronics International Ltd. (NASDAQ:FLEX). Here's a quick roundup of today's bullish brokerage notes on MSFT, JCP, and FLEX.

  • MSFT turned in better-than-expected earnings last night, prompting a fresh batch of attention from analysts. On the plus side, no fewer than seven brokerages raised their price targets on the stock, including Piper Jaffray to $66 from $64 -- never-before-seen territory. However, the security also received price-target cuts at BMO (to $58) and RBC (to $63). MSFT appears ready to capitalize on the good news, though, up 4% in electronic trading after settling Thursday at $52.06. However, the shares could run out of steam near their descending 10-week moving average, which has contained the stock in recent weeks. Ahead of last night's results, option traders were scooping up long calls at a rapid-fire rate -- and paying a pretty penny to do so. Specifically, Microsoft Corporation's Schaeffer's Volatility Index (SVI) of 40% sits just 2 percentage points from a 52-week peak.

  • JCP is set to open 2% higher, after Credit Suisse upgraded the stock to "neutral" from "underperform," citing "a shift in messaging to prioritize debt pay down." On the charts, JCP has put in a pretty dismal performance since a double-barreled rejection at the $10 mark in September and October 2015 sent the shares spiraling. In fact, the stock closed last night at $6.82 -- and is on pace to notch its third consecutive close south of its 20-month moving average -- and hit a new annual low of $6 during the Jan. 20 broad-market swoon. Short sellers, it seems, have been rolling the dice on more downside for J C Penney Company Inc. Short interest rose 3.7% in the last two reporting periods, and now accounts for more than 36% of the equity's available float.

  • FLEX received upgrades from Stifel (to "buy") and Raymond James (to "strong buy"), after reporting stronger-than-forecast fiscal third-quarter results last night. Deutsche Bank and Citigroup, meanwhile, lowered their respective price targets to $10 and $12. Nevertheless, the stock is up 10% ahead of the bell, after closing last night at $9.53. The shares could certainly use the boost, considering they're down 15% year-to-date, and hit a new annual low of $8.85 on Jan. 20. In the options pits, short-term speculators have rarely been as put-heavy as they are now. In fact, Flextronics International Ltd.'s Schaeffer's put/call open interest ratio (SOIR) of 1.19 sits just 1 percentage point from a 52-week peak.
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