Analyst Upgrades: Amazon.com, Inc., Alibaba Group Holding Ltd, and Red Hat Inc

Analysts upwardly revised their ratings and price targets on Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Ltd (NYSE:BABA), and Red Hat Inc (NYSE:RHT)

Karee Venema

Sep 22, 2016 at 9:22 AM

Analysts are weighing in on e-tailers Amazon.com, Inc. (NASDAQ:AMZN) and Alibaba Group Holding Ltd (NYSE:BABA), as well as tech stock Red Hat Inc (NYSE:RHT). Here's a quick roundup of today's bullish brokerage notes on AMZN, BABA, and RHT.

BMO boosted its price target on AMZN to $900 from $875 -- in record-high territory -- and its fourth-quarter sales estimate, citing strength in the company's Prime service. Additionally, Argus upgraded the stock to "buy" from "hold," saying the firm's growth prospects are increasing at a faster pace than the share price.

While AMZN stock has already added 16.8% year-to-date to trade at $789.74, it is up an additional 0.4% ahead of the bell -- and looks poised to take out its Sept. 7 all-time peak. Options traders, meanwhile, have been buying to open puts relative to calls at a quicker-than-usual clip in recent months. Amazon.com, Inc.'s 50-day put/call volume ratio of 0.99 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the 87th annual percentile. Separately, AMZN said its Handmade division is expanding into Europe.

BABA saw its price target raised to $125 from $104 at Stifel -- representing expected upside of 17.9% to last night's close at $106, and a move into uncharted waters. Against this backdrop, shares of BABA are nearly 2% higher in electronic trading, ready to add to their already impressive 30.4% year-to-date surge, and top yesterday's annual peak of $106.19. While option bulls have been circling Alibaba Group Holding Ltd of late, the stock could get an additional boost, should short sellers start to jump ship. Short interest accounts for 10% of BABA's float, or 6.9 times the security's average daily pace of trading.

RHT has jumped 7% in pre-market trading, after the company's solid second-quarter earnings and upwardly revised outlook were met with a bevy of price-target hikes. CLSA offered up the most optimistic goal, boosting its price target to $99 from $94. Elsewhere, Mizuho Securities said it believes Red Hat Inc's results were "driven by stronger-than-expected cloud sales." Today's projected price move could have RHT filling a late-June bear gap. Longer term, the shares are up a modest 5.2% year-over-year, based on last night's settlement at $77.04. Nevertheless, analysts are mostly optimistic, with 14 of 16 maintaining a "buy" or better rating and not a single "sell" to be found.

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