Netflix, Visa Score Price-Target Hikes Ahead of Earnings; Valeant Sells Obagi

Valeant Pharmaceutical International plans to repay debt

Jul 17, 2017 at 10:57 AM
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Analysts are weighing in on pharmaceutical company Valeant Pharmaceuticals Intl Inc (NYSE:VRX), FAANG stock Netflix, Inc. (NASDAQ:NFLX), and Dow component Visa Inc (NYSE:V). Here's a quick roundup of today's bullish brokerage notes on shares of VRX, NFLX, and V.

Valeant Sells Obagi Medical Unit

Valeant Pharmaceutical stock is up 2.3% to trade at $17.61, after the pharmaceutical company agreed to sell its Obagi Medical Products business for $190 million. VRX plans to use the proceeds to repay its term loan debt. A Stifel analyst reiterated her "buy" rating on VRX, while Deutsche Bank raised its price target to $19 from $18.

Since hitting $8.31 on April 24 -- the lowest VRX has traded since December 2008 -- the stock has more than doubled, stair-stepping back above its 200-day moving average. VRX's 14-day Relative Strength Index (RSI) sits at 67, placing it on the cusp of "overbought" territory. Additionally, VRX sports a 10-day call/put volume ratio of 3.68 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), indicating that traders have bought to open more than three VRX calls for every put during the past two weeks. This ratio sits in the 98th percentile of its annual range, hinting at a much healthier-than-usual appetite for bullish bets over bearish of late. Moreover, Valeant's Schaeffer's Volatility Scorecard (SVS) sits at 97, indicating VRX stock has tended to exceed option traders' volatility expectations during the past year.

Instinet Places Confidence in Netflix's Subscriber Growth

Ahead of Netflix's earnings release tonight, Instinet raised its price target on NFLX to $175 from $165, while maintaining a "buy" rating, on the belief that the TV streaming company will continue to gain subscribers into 2018. This lifted NFLX shares up 1.1% to trade at $162.83.  

Up more than 30% year-to-date, NFLX hit a record high of $166.87 on June 8, before pulling back with the broader tech sector, but has since recovered from most of those losses. Of the 29 analysts following NFLX, more than half rate it a "buy" or better. However, options buyers have been upping the bearish ante. The stock's 10-day put/call volume ratio of 0.90 is higher than 76% of all others from the past year, suggesting traders have bought to open Netflix puts over calls at an accelerated clip ahead of earnings.

Visa Swipes Price-Target Hike Ahead of Earnings

Visa stock is up 0.2% to trade at $97.11, after Barclays raised its price target to $111 from $106 -- in uncharted territory. This price-target hike comes before Visa is scheduled to release earnings on Thursday. Using its 40-day moving average as support, V is up more than 24% year-to-date, and is nearing Friday's record high of $97.37. What's more, Visa stock tends to be one of the best to own in the third quarter, historically.

Of the 21 analysts following Visa stock, 19 rate it a "buy" or better. However, short interest represents nearly a week's worth of pent-up buying demand, at the equity's average pace of trading. A solid earnings showing could squeeze the shorts.

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