FireEye Stock Rally Could Draw More Upgrades

FEYE has cleared a key technical level in today's trading

Jul 9, 2018 at 10:14 AM
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Piper Jaffray raised its rating on FireEye Inc (NASDAQ:FEYE) to "overweight" from "neutral," and upped its price target by $3 to $20 -- a more than 25% premium to last Friday's close. The analyst in coverage said FEYE stock is at an attractive entry point, and cited "significant improvement" in demand trends, as well as new pricing bundles, that will likely drive revenue growth in the third quarter.

In reaction, FEYE shares have shot up 5.1% to trade at $16.74. The equity is now trading back above the key $16.50 region -- a 50% Fibonacci retracement of the rally from its February lows near $13.60 to its mid-April two-year high at $19.36 -- which helped support a handful of second-quarter pullbacks.

Options traders have been betting on more upside for FireEye stock, too. The September 20 call is home to notable open interest of 13,423 contracts, and data from Trade-Alert points to mostly buy-to-open activity here.

More upgrades and/or a round of short covering could help the equity close the gap between its current price and the round $20 mark. Despite FEYE's nearly 18% year-to-date advance, 12 of 22 analysts still maintain a tepid "hold" recommendation.

Plus, the 17.71 million FireEye shares sold short represents a healthy 10.1% of the stock's available float. It would take short sellers more than a week to cover these bearish bets, at FEYE's average daily pace of trading.


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