Goldman Eyes Record Highs for Fiat Chrysler, MOMO Stocks

Analysts think FCAU stock can double

Managing Editor
Aug 31, 2017 at 10:07 AM
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Analysts are weighing in on Jeep parent Fiat Chrysler Automobiles NV (NYSE:FCAU), Chinese social networking concern Momo Inc (NASDAQ:MOMO), and footwear retailer Shoe Carnival, Inc. (NASDAQ:SCVL). Here's a quick roundup of today's brokerage notes on shares of FCAU, MOMO, and SCVL.

Goldman Expects FCAU to Double

Fiat Chrysler stock is up 2.2% to trade at $15.12, a new record high, after Goldman Sachs raised its price target to $30.10 from $22.40 -- about twice FCAU stock's current price -- and said it maintains a "conviction buy" rating. The Goldman analysts were encouraged by the spin-off potential the company has been exploring. FCAU stock has already tacked on 120% year-over-year.

In the options pits, traders have demonstrated a stronger-than-usual appetite for calls. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FCAU sports a 50-day call/put volume ratio of 5.46, which ranks in the highest percentile of its annual range. 

Goldman Sets The Bar High For MOMO Stock

MOMO stock is up 3.7% to trade at $37.44, after Goldman Sachs initiated coverage on the Chinese stock with a "buy" rating and a price target of $56 -- in uncharted territory for the shares, and representing expected upside of 55% from MOMO's current levels. The stock has more than doubled year-to-date, and the shares' 200-day moving average contained their  latest pullback attempt following a subpar earnings report.

It's a prime time to buy premium on short-term MOMO options, based on the security's Schaeffer's Volatility Index (SVI) of 49%, which ranks in the 6th percentile of its annual range. Furthermore, MOMO has consistently exceeded options traders' volatility expectations over the past year, as evidenced by the stock's Schaeffer's Volatility Scorecard (SVS) of 96.

Earnings Beat Has Shoe Carnival Back From The Dead

Shoe Carnival stock is up 22% to trade at $19.99, after the retailer posted well-received earnings. The earnings beat prompted Susquehanna to raise its price target to $19 from $18. It's been a rough year for SCVL stock, which fell to six-year low of $15.07 on Tuesday. The rally today takes the shares past their 80-day moving average, which hasn't been toppled on a daily closing basis since April.

A great deal of Shoe Carnival shorts could be kicking rocks today. Short interest increased by 30% during the last two reporting periods, and represents a healthy 10% of the stock's total available float. It would take nearly 10 days for the shorts to fully cover their positions, at SCVL's average daily trading volume.

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