Susquehanna Joins Bullish Chorus on Pure Storage Stock

There's been interesting activity in the options pits, too

by Josh Selway

Published on Sep 9, 2019 at 10:03 AM

Pure Storage Inc (NYSE:PSTG) is trading 3.3% higher at $17.67, after brokerage firm Susquehanna upgraded its rating to "positive" from "neutral," and hiked its price target to $25 from $16. The analyst note called attention to the company's position in the All-Flash Array market, on top of potential tailwinds from expected product announcements. Still, PSTG shares are sitting just below the 200-day moving average, a trendline not touched since a May bear gap.

Bullish attention is more of the same for the equity, as 10 of 13 brokerage firms in coverage have "strong buy" recommendations. The average 12-month price target is $19.55. This target isn't too ambitious, since PSTG traded above $29 at this time last year.

Options traders have seemingly been upbeat, too. During the last 10 days at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), more than 2,700 calls have been bought to open, compared to 219 puts. It's possible, though, that short sellers have been using calls to hedge. Short interest accounts for 8.5% of the total float, or 4.3 times the average daily trading volume.

Regardless, our Schaeffer's Volatility Index (SVI) shows a reading of 36% for Pure Storage, ranking in the 8th annual percentile. Simply put, volatility expectations are rather low for short-term option contracts.


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