BlackBerry Stock Higher on Blue-Chip Partnership

Analyst upgrades and price-target hikes could be on the horizon for BB

Managing Editor
Mar 20, 2018 at 9:45 AM
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Tech stock BlackBerry Ltd (NYSE:BB) is higher this morning, after the company announced another cybersecurity partnership, this time with sector peer Microsoft Corporation (NASDAQ:MSFT). Specifically, BlackBerry will provide security for the blue chip's flagship Office applications that are used by businesses. In reaction, shares of BB are up 4.3% to trade at $13.27 in early trading.

Looking broader, BB stock touched a five-year high of $14.55 in mid-January, before pulling back with the broader equities market. However, the security's dip was contained by familiar support at its 80-day and 100-day moving averages, and it's gained nearly 10% in the past month.

Despite the stock's year-over-year gain of 83%, analyst sentiment remains skeptical, with eight of the nine brokerage firms sporting "hold" or worse recommendations. Not to mention, BB's 12-month price target of $11.46 represents a nearly 14% deficit to current levels. A round of analyst upgrades or price-target hikes could help BlackBerry shares resume their quest for new highs.

In the options pits, though, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows optimism, as BB sports a 10-day call/put volume ratio of 10.84, ranking in the 77th percentile. This suggests calls have been bought to open over puts at a faster-than-usual clip during the past two weeks.

Lastly, the stock's Schaeffer's Volatility Scorecard (SVS) reading comes in at 88 (out of 100). In other words, BlackBerry stock has tended to make outsized moves over the past year, relative to what the options market has priced in.

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