FAANG Stock Showered in Bull Notes After Earnings

Facebook calls have been a popular pick for options traders

Emma Duncan
Apr 25, 2019 at 9:57 AM
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Social media giant Facebook, Inc. (NASDAQ:FB) is soaring in early trading, after the company reported a first-quarter profit beat. The company also mentioned it has set aside $3 billion to settle with U.S. regulators over data sharing, but could end up having to fork over up to $5 billion. Analysts have been far from shy to respond, with no fewer than 13 price-target hikes and one upgrade for FB shares today. 

Among the slew of bull notes was an upgrade to "buy" from "neutral" at UBS, as well as a price-target hike to $240 from $170. The analysts waxed optimistic on Instagram growth, and said, “While concerns will persist about core Facebook maturation, regulatory headwinds and/or safeguarding the platform for a privacy first approach, we think the market now better understands many of those risks (as they dominate almost all of our investor conversations)." 

In terms of options trading, calls have been heavily preferred over puts during the past two weeks. This is per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which shows FB's 10-day call/put volume ratio of 2.71 ranking in the 99th percentile of its annual range. In other words, recent option buyers are likely cheering FB's positive earnings reaction.

On the charts, Facebook has been moving higher since its Dec. 24 low, and today is set for its highest close since the July 25 record peak. With the shares last seen up 8.5% at $198, the stock is pacing for its best day since a late-January bull gap.

 


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