PayPal, Skechers Stocks Soar to Fresh Highs After Earnings

Citigroup thinks Amazon's new athletic line doesn't pose a threat to Lululemon

Oct 20, 2017 at 9:57 AM
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Analysts are weighing in on digital payment processor PayPal Holdings Inc (NASDAQ:PYPL), shoe stock Skechers USA Inc (NYSE:SKX), and athletic apparel retailer Lululemon Athletica inc. (NASDAQ:LULU). Here's a quick roundup of today's bullish brokerage notes on shares of PYPL, SKX, and LULU.

PayPal Stock Soars to Record High After Raising Guidance

PayPal stock is up 5.2% to trade at $70.75 and hit a record high of $71.66 earlier, after the company reported better-than-expected third-quarter earnings and raised its full-year guidance thanks to a sharp growth in mobile payments. As such, several brokerage firms upped their price target on PYPL, the highest mark of $83 coming from Evercore ISI.

The shares are on track to extend their impressive monthly win streak, now up 79% in 2017, and a short squeeze could help propel the security higher. Short interest on PYPL grew 5.3% during the last reporting period to 26.1 million shares. At the equity's average daily trading volume, it would take more than three sessions to cover these shorted shares.

Skechers Stock Pops On Strong Sales, Earnings

Another stock soaring on a third-quarter earnings beat is Skechers, last seen trading 30.7% higher at $31.40 -- territory SKX shares haven't visited since July 2016. The shoe maker also reported a new quarterly sales record. As a result, Wedbush upgraded the stock to "outperform" from "neutral" and joined three other brokerage firms in raising its price target, bumping it to $35 from $25.

Today's jump has Sketchers shares pacing for their first close above their 10-week moving average since early August. Meanwhile, near-term options traders have been unusually call-heavy. The equity's Schaeffer's put/call open interest ratio (SOIR) of 0.41 ranks higher than just 11% of all other comparable readings from the past year. In other words, near-term options traders have rarely been more call-heavy during the past 12 months.

Analyst Thinks Lululemon Will Survive Amazon's Expansion

Lululemon stock is up 2.2% to trade at $61.43, after Citigroup upgraded the security to "buy" from "neutral," citing optimism for the company's December earnings release and growth potential. The brokerage firm said market concerns over Amazon's expansion in retail are "overblown," and raised its price target to $73 from $62.

Not all analysts are convinced, however, as 12 of the 25 brokerage firms following LULU stock rate it a "hold" or "strong sell." The shares are still down 6% year-to-date, and continue to struggle to fill their March bear gap.

 

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