Apple, UnitedHealth, Clovis Oncology Upgraded

Dow stocks AAPL and UNH are trading lower, despite upbeat brokerage attention

May 17, 2017 at 9:50 AM
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Analysts are weighing in on iPhone parent Apple Inc. (NASDAQ:AAPL), fellow Dow stock UnitedHealth Group Inc (NYSE:UNH), and cancer treatment developer Clovis Oncology Inc (NASDAQ:CLVS). Here's a quick roundup of today's bullish brokerage notes on shares of AAPL, UNH, and CLVS.

AAPL Stock Trades Lower After Qualcomm Complaint

QUALCOMM, Inc. (NASDAQ:QCOM) has filed a breach of contract complaint against several Apple suppliers, claiming they have not paid royalties, deepening the legal rift between the two tech companies. Though news of QCOM's countersuit to Apple has done little to stop AAPL stock from hitting record highs in recent weeks-- most recently on May 15, when the equity hit $156.65 -- the shares are trading 1.1% lower at $153.71 amid broad-market headwinds.

Nevertheless, Morgan Stanley and BMO expect Apple stock to continue its trek into uncharted territory -- boosting their respective price targets to $177 and $170 -- with the latter saying there's historical precedent for an additional 10% upside to the p/e multiple. All eyes will continue to be on Apple in coming weeks, when the tech titan unveils a new lineup of MacBooks at its Worldwide Developers Conference (WWDC) in early June. Additionally, Apple said it has started manufacturing iPhones in India to try and expand its presence in the critical market.

Mizuho Securities Says to "Buy the Dips" on UNH Stock

UNH stock shed nearly 2% yesterday, as reports surfaced the insurance giant had overcharged Medicare. Today, the shares are down 0.9% to trade at $166.67, after the Justice Department said it is suing UnitedHealth Group for possible fraud. Mizuho Securities is telling traders to not panic, though, and "buy the dips because the market almost always looks past this kind of news in short order." The brokerage firm has a "buy" rating on UNH shares and a $200 price target -- well above the stock's May 1 record peak of $176.14.

While today's decline has UnitedHealth Group stock paring its modest year-to-date gain, UNH options traders are likely hoping for even bigger losses. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 6.64 sits above nearly all other comparable readings taken in the past year. In other words, puts have been bought to open over calls at an annual-high clip in recent weeks.

CLVS Stock Upgraded at J.P. Morgan Securities

Since hitting an annual high of $74.94 on March 16, CLVS stock had surrendered nearly 34%, based on last night's close at $49.56. J.P. Morgan Securities said there was "no clear fundamental reason" for this sell-off, but it created an attractive risk/reward opportunity. As such, the brokerage firm raised its rating on Clovis Oncology shares to "overweight" from "neutral" and its price target to $72 from $58. While CLVS is up 2.6% this morning at $50.85, short sellers have been in control during the stock's longer-term retreat. Short interest is up almost 10% from the March 15 reporting period, and now accounts for more than 27% of the stock's float.


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