Analysts Dole Out Love to JUNO; Lululemon Price Target Lifted Ahead of Earnings

Options traders are buying calls on Lululemon stock as earnings approach

Patrick Martin
Aug 29, 2017 at 10:08 AM
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Analysts are weighing in on biotech stock Juno Therapeutics Inc (NASDAQ:JUNO), yoga apparel retailer Lululemon Athletica Inc. (NASDAQ:LULU), and semiconductor stock Mellanox Technologies, Ltd. (NASDAQ:MLNX). Here's a quick roundup of today's brokerage notes on shares of JUNO, LULU, and MLNX.

JUNO Stock Hits New Highs After Upgrades

Juno Therapeutics stock is up 14% to trade at $41.58 -- a new annual high -- after Raymond James and Wedbush both upgraded the biotech stock to "outperform," and hiked their price targets to $45 and $42, respectively. In the wake of Gilead Sciences' deal to buy Kite Pharma -- which resulted in a bull gap for JUNO stock yesterday -- Wedbush believes more positive attention will come to Juno Therapeutics' CAR-T therapies.

JUNO stock has now more than doubled year-to-date. A short squeeze could create even more tailwinds for JUNO stock. The 15.73 million shares of JUNO sold short represent over a quarter of the stock's total available float. It would take over 13 days for the shorts to fully cover their pessimistic positions, at Juno's average pace of trading. 

LULU Stock Gets Price-Target Hike Ahead Of Earnings

Lululemon stock is down 0.7% to trade at $59.70, as a sector swoon for athletic apparel stocks overshadows a price-target hike to $64 from $60 at Susquehanna. Lululemon will report earnings on Thursday, and shareholders are hoping LULU stock can avoid the same fate as many of its sector peers. Since touching an annual low of $47.26 on May 31, LULU has tacked on 24%. 

In the options pits, traders have bought to open LULU calls over puts at an accelerated clip ahead of earnings. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), LULU sports a 50-day call/put volume ratio of 2.62, which ranks 4 percentage points from a 52-week high.

Mellanox Stock Gets A 'Buy' Rating, Lofty Price Target 

Mellanox Technologies stock is up 0.9% to trade at $45.60, after Benchmark started coverage of the chip stock with a "buy" rating and a price target of $60. The new target implies expected upside of about 32% from MLNX's current price, and stands in territory not charted in over four years. MLNX stock has tacked on 12% year-to-date, but its 100-day moving average stifled a breakout attempt earlier this year. 

There are plenty of short sellers sniffing around MLNX. Short interest has increased by 6% during the last reporting period, and represents a healthy 7% of the stock's total available float. In fact, it would take over nine days to repurchase all of those pessimistic positions, at MLNX's average daily trading volume. 


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