Analyst Upgrades: Microsoft, Archer Daniels , Western Digital

Analysts upwardly revised their ratings and price targets on Microsoft Corporation (MSFT), Archer Daniels Midland Company (ADM), and Western Digital Corp (WDC)

May 24, 2016 at 10:06 AM
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Analysts are weighing in on Dow component Microsoft Corporation (NASDAQ:MSFT), agricultural interest Archer Daniels Midland Company (NYSE:ADM), and data storage stock Western Digital Corp (NASDAQ:WDC). Here's a quick roundup of today's bullish brokerage notes on MSFT, ADM, and WDC.

  • MSFT was upgraded to "outperform" from "market perform" at Cowen and Company, lifting the shares 1% to $50.53, and helping the stock pare its year-to-date loss to less than 9%. The equity has been struggling in recent weeks, losing support at its 200-day moving average, but analysts are largely optimistic toward Microsoft Corporation, with 68% maintaining a "buy" or better recommendation. And in MSFT's options pits, long calls have doubled puts over the past 10 weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), with the resulting call/put volume ratio of 1.99 ranking higher than two-thirds of the past year's readings.

  • ADM is up 3.2% at $41.72, after BMO raised its rating on the stock to "outperform" and its price target to $48 from $36. This is a change of pace from the brokerage corner, where six out of seven analysts rate Archer Daniel Midland Company a "hold" or "strong sell." ADM has been a strong performer in 2016, adding 13.7%, and finding a recent foothold in the form of its 160-day moving average. In fact, the shares earlier touched a year-to-date high of $41.87. Predictably, near-term option traders are at a call-heavy extreme, with the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.60 parked at an annual low. But with a 14-day Relative Strength Index (RSI) of 69.7, the stock is quickly approaching overbought territory, suggesting a correction may not be far off. 

  • WDC is 4.4% higher at $42.25, following an upgrade to "outperform" from "market perform" at Cowen and Company, which also lifted its price target on the stock to $50 from $45. Jefferies, on the other hand, lowered its price target to $50 from $56, but maintained its "buy" rating. The stock has been a long-term laggard, shedding 54.7% year-over-year. While the shares have been on the mend from a three-year low of $34.99, seen just over a week ago, pessimism in the options pits is still running high. At the ISE, CBOE, and PHLX, Western Digital Corp's 50-day put/call volume ratio of 1.45 sits just 2 percentage points shy of a 12-month high. Looking ahead, the company will hold its fiscal fourth-quarter guidance call after the close this Thursday.
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