3 Stocks to Watch After Analyst Upgrades

Argus set a Street-high Pinterest price target of $40

Aug 15, 2019 at 2:53 PM
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A positive reaction for Walmart (WMT) earnings is keeping the Dow above water today, though the Nasdaq is lagging on post-earnings losses for Cisco Systems (CSCO). Among other stocks making notable moves are online trading name Gain Capital Holdings Inc (NYSE:GCAP), Wrangler jeans maker Levi Strauss & Co. (NYSE:LEVI), and social media name Pinterest Inc (NYSE:PINS). Here's a quick look at what's moving the shares of GCAP, LEVI, and PINS.

Gain Capital Stock Soars After Upgrade

J.P. Morgan Securities upgraded Gain Capital to "overweight" from "neutral," and raised its price target to $6 from $5.50 -- a 42% premium to last night's close. The brokerage firm thinks GCAP is in a prime position to benefit from higher volatility, and said buzz is building the company could be a potential takeover target. In reaction, the stock is up 6.4% to trade at $4.50.

GCAP stock's longer term trend remains lower, with the shares down 27% year-to-date, and today's pop being contained by familiar resistance at the 100-day moving average. Short sellers have been in the driver's seat, too, with short interest up 9% since the Jan. 1 reporting period. These bearish bets now represent more than 19% of the equity's available float, or 14.6 times the average daily pace of trading.

Brand Strength Could Buoy Levi Strauss, Says BofA-Merrill Lynch

Levi Strauss was up 4% earlier, after BofA-Merrill Lynch raised its rating on the stock to "buy" from "neutral." The firm waxed optimistic on the retailer's brand strength amid a "disrupted environment" due to U.S.-China trade tensions, but said a tough time for U.S. department stores has "weighed on valuation," and lowered its LEVI price target by $5 to $20.

At last check, the shares have swung down 0.8% to trade at $16.12. LEVI stock has been sliding since going public late in the first quarter, down 27% from its March 21 open at $22.22 -- hitting a record low of $16 yesterday.

Analysts remain upbeat toward the retail stock, though. Prior to today, four of six brokerages maintained a "buy" or better rating, with not a single "sell" on the books. Plus, the average 12-month price target of $23.17 is a 44% premium to LEVI stock's current price.

Argus Raised its Pinterest Rating to "Buy"

Argus lifted its Pinterest rating to "buy" from "hold," and set a Street-high $40 price target on the stock -- representing expected upside of 25.7% to current levels. Analyst Jasper Hellweg said PINS is "off to a strong start in 2019," and believes revenue will continue to grow at a pace similar to that seen in the first half of this year.

After surging as much as 3% earlier, PINS stock was last seen trading down 1.1% at $31.89. Looking closer at the charts, the equity gapped higher earlier this month on a positive earnings reaction, eventually topping out at a record high of $36.10 on Aug. 12. Though the shares have consolidated some of these gains, the $31.50-$32.00 region has emerged as support.

And while options traders have been eyeing more upside, short sellers have been throwing in the towel. Short interest on PINS slumped 19.2% in the two most recent reporting periods to 12.4 million shares -- the fewest since mid-June.


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