Sprint Stock Pops on Merger Talk; Best Buy Falls on Lackluster Guidance

BBY is among the worst stocks on the NYSE after issuing unimpressive guidance for fiscal 2021

by Katie Coburn

Published on Sep 19, 2017 at 3:16 PM

U.S. stocks are trading higher this afternoon, with the Dow set to extend its winning streak to eight sessions -- the longest since early August. Among the names in the spotlight today are telecom stock Sprint Corp (NYSE:S), electronics retailer Best Buy Co Inc (NYSE:BBY), and clothing company Gap Inc (NYSE:GPS). Here's a quick look at what is moving shares of S, BBY, and GPS.

Sprint Stock Soars on Talk of T-Mobile Merger

Sprint stock is up 9.2% to trade at $8.39, amid reports the telecom is in active merger talks with T-Mobile. Sprint is no stranger to M&A chatter, though; not long ago, Charter Communications said it had "no interest" in a merger with Sprint.

Today's jump ranks Sprint as the second-most active stock by volume, and as the second-best percentage gainer on the New York Stock Exchange (NYSE). S shares are flirting with their year-to-date breakeven level -- down only 0.6% in 2017 -- and are pacing to close above their 160-day moving average for the first time in a month.

Options traders on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been more bullish than usual toward Sprint stock of late. S sports a 10-day call/put volume ratio of 14.43 -- just 2 percentage points from an annual high. In other words, near-term option players have bought more than 14 times as many S calls for every S put in the past two weeks.

Best Buy Stock Glitches on Lackluster Guidance

Among the worst stocks on the NYSE today is Best Buy stock, last seen down 7.3% to trade at $53.17, after the company reported lackluster guidance for fiscal 2021. In addition, CEO Hubert Joly warned that the company's solid second quarter may not translate into a strong holiday quarter. BBY stock reached a record high of $63.32 on Aug. 24, but is now attempting to maintain a foothold atop its 160-day moving average. Still, BBY is up roughly 39% year-over-year.,

Short interest represents 11.5% of the stock's total available float. At BBY's average daily trading volume, it would take more than four days to cover these shorted shares -- plenty of fuel for a short squeeze, should the shares resume their longer-term uptrend. BBY, however, is on the short-sale restricted (SSR) list today.

Bullish Analyst Notes Give Gap Stock a Lift

While September is a historically tough trading month for Gap stock, GPS shares are inching their way higher today, last seen up 0.4% at $27.99 -- and fresh off a year-to-date high of $28.50 -- thanks to a round of bullish analyst notes. This morning, Credit Suisse upgraded the clothing retail stock to "neutral" from "outperform," and raised its price target to $30 from $23. Telsey Advisory Group also raised its price target on GPS to $31 from $27 -- territory not charted in almost two years.

Contrary to the data, Gap stock has performed quite well this month, tacking on 18.3%. However, only three of the 15 analysts following Gap stock recommend buying the stock. Additional upgrades could propel GPS shares even higher.

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