The Oil Stock at 'An Attractive Entry Point'

Analysts expect a return to multi-year highs for VMware stock

Managing Editor
Aug 22, 2017 at 9:26 AM
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Analysts are weighing in on tech names VMware, Inc. (NYSE:VMW) and Zayo Group Holdings Inc (NYSE:ZAYO), as well as oil stock Pioneer Natural Resources (NYSE:PXD). Here's a quick roundup of today's bullish brokerage notes on shares of VMW, ZAYO, and PXD.

Deutsche Bank Upgrades VMW Stock Ahead of Earnings

VMW shares are up 2% in electronic trading -- set to open at their highest perch since September 2014 -- after Deutsche Bank upgraded the stock to "buy" from "hold," and raised its price target to $120 from $110, territory not charted in nine years. Since breaking out above its 50-day moving average in late July, VMW stock hit a two-year high of $98.20 on Aug. 14, and closed last night at $97.01, up 23% year-to-date.

Plus, VMware earnings are due after Thursday's close, and the stock has finished higher in the session subsequent to reporting in four of the past five quarters. Another earnings win could shake some of the weaker bearish hands loose. Short interest increased by 6% during the last two reporting periods to 25.28 million shares -- a record high. It would take 19 days to repurchase all of those pessimistic positions, at VMW's average pace of trading. 

Analyst Sees Record Highs For Zayo Group Holdings

Shares of Zayo Group Holdings are down 0.8% in electronic trading, after the fiber optics specialist reported lower-than-expected fiscal fourth-quarter earnings and revenue last night. Nevertheless, J.P. Morgan Securities raised its price target to $38 from $36, representing an expected move to a record highs for ZAYO stock.

The stock is clinging to support above its year-to-date breakeven mark, and analysts are split. Of the 14 brokerages covering the equity, eight rate it a "buy" or better, while the average 12-month price target at last night's close was $37.31 -- 13.1% above Monday's settlement at $32.97. 

Imperial Capital Initiates Coverage on Pioneer Natural Resources

Pioneer Natural Resources stock is up 1.5% ahead of the bell, after Imperial Capital started the oil stock out with an "outperform" rating and price target of $160, saying "the recent pullback offers an attractive entry point." Specifically, PXD stock has slumped 36% since hitting a two-year high of $199.83 in mid-February, falling to an annual low of $127.84 yesterday, before closing at $127.94.

In the options pits, however, there has been a heavier-than-usual appetite for long calls relative to puts in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), PXD's 10-day call/put volume ratio of 3.17 ranks 1 percentage point from a 52-week high. 


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