Analyst Upgrades: Computer Sciences, HP, and Monsanto

Analysts upwardly revised their ratings and price targets on Computer Sciences Corporation (CSC), Hewlett Packard Enterprise Co (HPE), and Monsanto Company (MON)

May 25, 2016 at 10:15 AM
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Analysts are weighing in on tech stocks Computer Sciences Corporation (NYSE:CSC) and Hewlett Packard Enterprise Co (NYSE:HPE), as well as agricultural concern Monsanto Company (NYSE:MON). Here's a quick roundup of today's bullish brokerage notes on CSC, HPE, and MON.

  • CSC has soared 33.6% to $47.61 -- just off a record high of $48.18 -- following reports that HPE will spin off its IT services business and merge it with Computer Sciences Corporation. Additionally, CSC unveiled upbeat fiscal fourth-quarter earnings. Optimistic analysts have since chimed in, with Barclays upgrading the stock to "overweight" from "equal weight" and boosting its price target to $54 -- joining at least five other brokerage firms that raised their price targets on the shares. Raymond James bucked the bullish trend, however, lowering its rating on CSC to "market perform" from "outperform." Some bearish options traders may not be so pleased with today's bull gap. Although volume has been relatively low on an absolute basis, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 1.81 sits in the 98th percentile of its 12-month range.

  • HPE is also flying high, up 11.9% to $18.19 -- within striking distance of its April 1 all-time high of $18.55 -- after its spinoff news was paired with better-than-expected fiscal second-quarter revenue. What's more, Needham raised its rating on the stock to "buy" from "hold," and at least six brokerage firms have increased their price targets. Jefferies and BMO set the loftiest target, at $24 -- a 32% premium over Hewlett Packard Enterprise Co's current value. The stock has already tacked on 20% year-to-date, and it looks as though options traders have been betting on further gains. Across the ISE, CBOE, and PHLX, traders have bought to open 3.46 HPE calls for each put over the past 10 trading days.

  • MON received an upgrade to "buy" from "hold" at Jefferies, which also raised its price target on the stock to $132 from $95, after the company rejected a $62 billion buyout offer from German-owned Bayer AG. But, reports are circulating that Monsanto Company is open to further talks regarding a deal. Against this backdrop, the shares are up 2.9% to $112.46. MON has added roughly 16% over the past week amid the takeover chatter, and option bulls just keeping looking for more upside. MON's 10-day call/put volume ratio on the ISE, CBOE, and PHLX sits at 9.69 -- higher than 97% of all readings in the past year.
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