Constellation Brands Stock Rallies on Big Upgrade

Goldman likes STZ even without any cannabis gains

by Patrick Martin

Published on Jan 10, 2019 at 2:57 PM

Stocks are cautiously higher, but gains are capped by subpar holiday sales data. Among stocks making notable moves higher today are beer maker Constellation Brands, Inc. (NYSE:STZ), cardiovascular disease specialist Amarin Corporation (NASDAQ:AMRN), and casino name MGM Resorts International (NYSE:MGM). Below, we'll take a look at the news moving the shares of STZ, AMRN, and MGM.

Goldman Sees STZ Outperforming Even Without Cannabis

Earlier today, Constellation Brands stock received an upgrade to "buy" from "neutral" at Goldman Sachs. The analyst in coverage is not concerned about the company's investment in cannabis stock Canopy Growth (CGC). At last check, STZ was up 5.8% to trade at $159.76, near the top of the New York Stock Exchange (NYSE) and shaking off no fewer than five price-target cuts, including to $162 from $192 at Macquerie. 

The rise today helps Constellation Brands stock dig itself out of the two-year low of $155.56 it fell to yesterday after slashing its guidance. Even with today's rally, the shares are still staring up at their 20-day moving average, a trendline of resistance in place since a mid-October bear gap.

Buyout Rumors Fuel Big Week for AMRN

Amarin stock is up 19.6% to trade at $17.97, one of the best stocks on the Nasdaq today, amid rumors that pharma giant Pfizer (PFE) was interested in buying the biotech name. AMRN raced to an 11-year high of $23.33 back on Nov. 6. A sharp pullback ensued, but the shares found support at their 100-day moving average. And after flashing a bullish signal to end 2018, Amarin stock has now gained 34% this week, on track for its best week since late September

In the options pits, calls have become quite popular today. So far, about 49,000 calls have changed hands, four times the average intraday pace and volume pacing for the 97th percentile. Most of the action is transpiring at the February 20 call, with buyers expecting the upside run to continue.

Hedge Fund Stake Rumors Fuel MGM Streak

According to Reuters, activist hedge fund Starboard Value is reportedly building a stake in MGM Resorts.This news has MGM stock up 1.6% to trade at $28.05, on track for its fifth straight win. Since bottoming at $21.61 on Dec 24, MGM has added nearly 30%. Today's rally has run out of steam just below the shares' 160-day moving average. 

Despite shedding 17% year-over-year, analysts have stayed with MGM. Of the 11 brokerages in coverage of the casino operator, seven rate it a "buy" or better, with zero "sells" on the books. 

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