Analyst Upgrades: AK Steel, US Steel, Micron Technology

Analysts upwardly revised their ratings and price targets on AK Steel Holding Corporation (AKS), United States Steel Corporation (X), and Micron Technology, Inc. (MU)

Jun 8, 2016 at 11:37 AM
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Analysts are weighing in on steel stocks AK Steel Holding Corporation (NYSE:AKS) and United States Steel Corporation (NYSE:X), as well as semiconductor stock Micron Technology, Inc. (NASDAQ:MU)Here's a quick roundup of today's bullish brokerage notes on AKS, X, and MU.

  • AKS is up 11.1% at $5.09 -- just a chip-shot from a 12-month high -- after Credit Suisse upgraded the steel stock to "outperform" from "underperform," and doubled its price target to $7 from $3.50. Further, the analysts said the remain "very bullish" on the U.S. steel sector. AKS shares have more than doubled year-to-date, and are on pace to topple their 50-month moving average for the first time since 2014. Even before today, AKS had outperformed the greater S&P 500 Index (SPX) by 23.5 percentage points over the last 20 sessions, yet 19.9% of the stock's float is still sold short. AK Steel Holding Corporation's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE) and NASDAQ OMX PHLX (PHLX) is a whopping 153.7, the highest of all readings taken within the past 12 months, showing an exceptionally strong bullish appetite among option buyers of late.
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  • is also reaping the benefits of a Credit Suisse note, up 9.1% at $17.38, after the brokerage firm issued a price-target hike to $26 from $22. Like AKS, X has more than doubled year-to-date, and is now facing off against its 20-month trendline. But analysts don't seem sold on the stock just yet, with 12 of 14 rating United States Steel Corporation a "hold" or worse. Now may be the time to strike for near-term option buyers. X's Schaeffer's Volatility Scorecard (SVS) is at a relatively high 90, indicating the stock has tended to exceed volatility expectations over the past year, compared to what the options market has priced in. Likewise, its Schaeffer's Volatility Index (SVI) of 63% sits only in the 31st percentile of all other readings from the past year, suggesting near-term option traders are still pricing in relatively low volatility expectations.

  • MU is down 1.5% at $12.80, despite a brief early morning jump, after announcing a delay in its acquisition of Inotera, a Taiwan-based DRAM chip manufacturer. Before the delay was announced, Cowen and Company issued a price-target hike to $15 from $13 for the semiconductor stock. The shares have gained more than 28% in the past month, but are still staring up at their 200-day moving average, which hasn't been conquered since February 2015. What's more, the stock's 14-day Relative Strength Index (RSI) stands at 73 -- in "overbought" territory, suggesting a breather may have been due. Micron Technology, Inc. near-term options players have been more put-skewed than usual of late, with MU's Schaeffer's put/call open interest ratio (SOIR) of 0.77 sitting in the 92nd percentile of its annual range.
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