Analyst Update: UnitedHealth, Discover, and Kite Pharma

Analysts revised their ratings and price targets on UnitedHealth Group Inc (NYSE:UNH), Discover Financial Services (NYSE:DFS), and Kite Pharma Inc (NASDAQ:KITE)

Kirra Fedyszyn
Apr 20, 2016 at 3:24 PM
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Analysts are weighing in on healthcare concern UnitedHealth Group Inc (NYSE:UNH), financial interest Discover Financial Services (NYSE:DFS), and biotech stock Kite Pharma Inc (NASDAQ:KITE). Here's a quick roundup of today's brokerage notes on UNH, DFS, and KITE.

  • UNH is up 3.4% at $134.88, after hitting a new record high of $134.98 earlier, bringing its year-to-date lead to nearly 15%. No fewer than nine brokerage firms have raised their price targets on the stock since the company reported strong first-quarter earnings on Tuesday morning, and announced that it would exit Affordable Care Act (ACA) exchanges in most states by 2017. Mizuho Securities set the loftiest target at $156 -- a roughly 16% premium over the stock's current value. Bearish option traders may be kicking rocks as UnitedHealth Group treks farther north, but analysts have largely been in the equity's corner, with 15 out of 17 rating UNH a "buy" or better
  • After reporting better-than-expected earnings last night, DFS earned price-target hikes from at least seven analysts -- the highest target set at $75 by Oppenheimer -- while Susquehanna broke the trend, lowering its target on Discover Financial Services to $66. The stock has added 8% at $56.73, continuing a strong uptrend that began after the shares hit a nearly three-year low of $42.86 in mid-February. DFS has since been enjoying solid support from its rising 20-day moving average. Options traders have been relatively optimistic of late, buying to open 3.52 DFS calls for each put on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) over the past two weeks. And short sellers have been backing off, as well, with these bearish bets falling nearly 24% during the most recent two-week reporting period.
  • KITE is 6% higher at $48.91, after the drugmaker reported upbeat results from a Phase 1 trial of its investigational non-Hodgkin's lymphoma treatment. Kite Pharma Inc is shaking off a price-target cut to $72 from $75 at Jefferies, but the shares are still off nearly 21% year-to-date. In fact, KITE gave up 57% between its record high of $89.84 in November, and its annual low of $38.41, less than three months later. The shares have also been stuck beneath their 100-day moving average since mid-December. Meanwhile, short interest on KITE remains elevated, representing 13.6% of the equity's available float. At KITE's typical daily trading pace, it would take more than a week to buy back these bearish positions.
For other stocks in analysts' crosshairs, read Analyst Upgrades: Yahoo! Inc., Intuitive Surgical, Inc., and VMware, Inc. and Analyst Downgrades: Apple Inc., CalAmp Corp., and Intel Corporation.

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