Analyst Upgrades: Groupon Inc, VMware, Inc., and Western Digital Corp

Analysts upwardly revised their ratings and price targets on Groupon Inc (GRPN), VMware, Inc. (VMW), and Western Digital Corp (WDC)

Oct 27, 2016 at 9:26 AM
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Analysts are weighing in on deals distributor Groupon Inc (NASDAQ:GRPN), virtualization stock VMware, Inc. (NYSE:VMW), and storage device maker Western Digital Corp (NASDAQ:WDC). Here's a quick roundup of today's bullish brokerage notes for GRPN, VMW, and WDC.

  • Despite posting in-line earnings and receiving a price-target hike to $4.80 from $4.40 at Goldman Sachs, GRPN is down 7.2% pre-market. Meanwhile, the company announced it will acquire one-time rival LivingSocial. Last night, Groupon Inc settled at $5.26, and on a 71% year-to-date lead. Yet, short sellers haven't shied away from the outperforming stock. Eleven percent of GRPN's total float is sold short, which would take two weeks to cover, based on the equity's typical trading levels. If today's losses materialize, the collective spirit of these bearish traders could get a lift. At the same time, bullish options traders could be left kicking rocks.
  • VMW reported better-than-expected earnings last night, with CEO Pat Gelsinger describing the quarterly performance as "very good." Wall Street seems to agree. Citigroup upped its opinion on VMware, Inc.  to "buy" from "neutral," and was one of at least 10 brokerage firms to hike its price target. Heading into the session, the stock was up 29.6% year-to-date at $73.31, and based on their 5% gain in electronic trading, the shares could make a run at a new annual high today. Additional upgrades could add even more fuel to VMW's fire. Of the 27 analysts tracking the stock, 15 have doled out either a "hold" or a "sell" rating.
  • WDC blew past its consensus earnings estimate during last night's trip to the confessional. As a result, BofA-Merrill Lynch upped its opinion to "neutral" from "underperform," while no fewer than 12 other analysts raised their price targets. Ahead of the open, Western Digital Corp is pointed 4.4% higher, relative to Wednesday's close at $56.52 -- and, longer term, the shares have been on fire since bottoming around $35 in mid-May. Not surprisingly, options traders have shown a distinct preference for long calls over puts. WDC's 10-day call/put volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is 3.03, ranking in the bullishly skewed 86th annual percentile.
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