Analyst Upgrades: The Kroger Co, Groupon Inc, and Wynn Resorts, Limited

Analysts upwardly revised their ratings and price targets on The Kroger Co (KR), Groupon Inc (GRPN), and Wynn Resorts, Limited (WYNN)

Feb 12, 2016 at 10:03 AM

TFM
WYNN
KR
GRPN

Analysts are weighing in on grocery chain The Kroger Co (NYSE:KR), coupon concern Groupon Inc (NASDAQ:GRPN), and casino stock Wynn Resorts, Limited (NASDAQ:WYNN). Here's a quick roundup of today's bullish brokerage notes on KR, GRPN, and WYNN.

Stifel began coverage on KR with a "buy" rating and $45 price target, amid reports that Kroger is interested in a bid to acquire The Fresh Market Inc (NASDAQ:TFM). The Kroger Co is up 2% at $37.19, and has outperformed the S&P 500 Index (SPX) by about 12 percentage points over the last three months, with help from a well-received earnings report. But sentiment among the options crowd is still quite bearish, with the stock's 10-day put/call volume ratio of 0.64 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranking higher than three-fourths of all readings in the past year. Short interest has also climbed by nearly 29% over the past month, indicating a fair amount of buying power sitting on the sidelines if KR can maintain today's upward momentum.

GRPN reported better-than-expected fourth-quarter earnings last night, prompting several brokerages to adjust their price targets on the stock, including Piper Jaffray, which raised its target on Groupon Inc to $3 from $2.50. The stock has been sliding steadily lower for nearly a year, touching a record low of $2.15 on Thursday, but has popped 23.9% to $2.78 today. The rally could have short sellers sweating -- more than 18% of GRPN's total available float is wrapped up in these bearish bets. At the stock's typical pace of trading, it would take almost two full weeks to buy back all those shares.

After reporting earnings well above predictions, WYNN is up 10.8% at $66.15 -- the top percentage gainer on the SPX -- and received a price-target hike to $70 from $64 at Nomura (though Credit Suisse lowered its price target by $4 to $70). Short interest on Wynn Resorts, Limited accounts for about 21% of its total available float, representing plenty of potential for a short squeeze to keep today's rally going. Meanwhile, option traders will be cheering, having a recent penchant for bullish bets. On the ISE, CBOE, and PHLX, WYNN's 50-day call/put volume ratio of 1.81 is in the 99th percentile of its annual range.

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