2 Banks On the Move After Earnings; Plus, Analysts Eye New Highs for ONCE

Four brokerage firms hiked their Spark price targets into uncharted territory after a key FDA approval

Managing Editor
Oct 13, 2017 at 10:08 AM
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U.S. stocks are trading higher this morning, en route to new record highs as third-quarter earnings roll in. Among the stocks making moves this morning are financial institution Bank of America Corp (NYSE:BAC), bank holding company Wells Fargo & Co (NYSE:WFC), and gene therapy concern Sparks Therapeutics Inc (NASDAQ:ONCE). Here's a closer look at what's moving shares of BAC, WFC and ONCE.

Bank of America Bounces Post-Earnings

After a shaky start to the session, shares of BAC are trading slightly higher this morning following better-than-expected third-quarter earnings. BAC stock is up 1% at $25.69, hovering just below its Oct. 6 nine-year high of $26.30. Bank of America has gained roughly 60% year-over-year, and on Thursday found a foothold at its rising 20-day moving average (currently located at $25.38).

Options players favored puts ahead of BAC earnings. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.89 ranks in the 98th percentile of its annual range, as near-term options traders have rarely been more put-biased in the past 12 months. Plus, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), BAC sports a 50-day put/call volume ratio of 0.37, in the 99th percentile of its annual range -- indicating puts were bought to open at a faster-than-usual clip relative to calls over this time frame.

Wells Fargo Gaps Lower on Revenue Miss

Wells Fargo stock is taking a hit after the scandal-stricken bank reported worse-than-expected third-quarter revenue, with mortgage banking revenue tanking 37% during the period. WFC gapped lower out of the gate this morningand at last check was trading down 3.5% at $53.30 -- tumbling back into negative year-to-date territory for the first time this month.

At the ISE, CBOE, and PHLX, Wells Fargo sports a 50-day call/put volume ratio of 1.34, which ranks in the 70th percentile of its annual range. This suggests that, despite the bank's costly scandal stemming from the creation of fake customer accounts, traders have preferred WFC call options over puts during the past 10 weeks.

Analysts Target Triple Digits for Spark Therapeutics Stock

Spark Therapeutics received no fewer than four price-target raises this morning, after receiving unanimous FDA panel approval for its Luxturna retinal disease drug. Analysts at Stifel, BMO, and SunTrust Robinson all hiked their ONCE price targets to $101, while Barclays lifted its own target all the way up to $107. The biotech stock is trading up 2.7% at $88.50, and earlier set a fresh record high of $91.75. 

Prior to the FDA nod, analysts following ONCE were already shouting "buy" for the stock, with 16 out of 18 carrying "buy" or "strong buy" recommendations. Meanwhile, short interest on the stock accounts for more than 7% of its available float, suggesting some of today's gains could be the result of short-covering activity.

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