Analyst Upgrades: Square Inc, Western Digital Corp, and Dave & Buster's Entertainment, Inc.

Analysts upwardly revised their ratings and price targets on Square Inc (SQ), Western Digital Corp (WDC), and Dave & Buster's Entertainment, Inc. (PLAY)

by Kirra Fedyszyn |

Published on Dec 7, 2016 at 9:19 AM

Analysts are weighing in on payment processor Square Inc (NYSE:SQ), data storage stock Western Digital Corp (NASDAQ:WDC), and entertainment interest Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY). Here's a quick roundup of today's bullish brokerage notes on SQ, WDC, and PLAY.

  • SQ is up 2.3% ahead of the bell, following a price-target hike to $14 from $12 at Piper Jaffray. Also boosting the shares is the latest news from CEO Jack Dorsey, who announced Square Inc's virtual payment cards now work with Apple Inc.'s (NASDAQ:AAPL) Apple Pay. The stock has been marching higher over the past month, and is just 1.4% into positive year-to-date territory, at $13.27. In fact, SQ recently closed its huge post-earnings bear gap from early May. Options traders seem to be betting the stock has more room to run, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity has seen 82.59 calls purchased for each put over the last 10 sessions. What's more, the resulting call/put volume ratio ranks just 3 percentage points from an annual bullish high. 

  • WDC is on track to open at a fresh annual high, up 5.7% in pre-market trading after the company raised its revenue and earnings guidance for its fiscal second quarter and renewed a patent cross-licensing agreement with Samsung. The news inspired no fewer than 13 brokerage firms to raise their price targets on the stock, including Brean Capital, which set its sights highest at the round $100 level. Western Digital Corp stock has nearly doubled from its mid-May lows to trade at $63.85, and has found an ally in its 50-day moving average in recent months. As such, it's little surprise bears have begun to hit the exits. For example, short interest on WDC fell by 44.4% during the two most recent reporting periods. 

  • PLAY is set to surge 13% at the bell, which would put the shares well into record-high territory. The company reported strong third-quarter earnings and raised its full-year outlook, leading Piper Jaffray, Stifel, and Raymond James to increase their price targets -- to $57, $52, and $60, respectively. As of Tuesday's close at $48, PLAY was already seated on a healthy 15% gain for 2016, but the shares could stand to benefit further from a round of short-covering activity. Though these bearish bets dropped by nearly 14% in the last two reporting periods, 12.4% of Dave & Buster's Entertainment, Inc.'s total float is still sold short. Moreover, it would take at least seven sessions for short sellers to cover, based in the stock's average daily volume. 
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