Why AAPL, OLED, CRUS Stocks are Soaring Today

Outperforming OLED stock seems overdue for bull notes

Oct 31, 2019 at 3:09 PM
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The U.S. stock market is spiraling today, with Wall Street spooked by U.S.-China trade headlines and a formal vote in the House of Representatives to proceed with the impeachment inquiry into President Donald Trump. However, not all stocks are trading lower, with the shares of tech giant Apple Inc. (NASDAQ:AAPL) and smartphone suppliers Universal Display Corporation (NASDAQ:OLED) and Cirrus Logic, Inc. (NASDAQ:CRUS) all higher after earnings.

Apple Flirts With New High After Earnings

Apple is the best stock on the Dow today -- up 1.8% at $247.72 to trade within a chip-shot of its Oct. 29 record high of $249.75 -- after the iPhone maker reported fiscal fourth-quarter earnings of $3.03 per share on $64.04 billion in revenue, more than analysts were expecting. The company also gave an upbeat sales forecast for the holiday shopping season, with CEO Tim Cook noting a "very, very good start" to sales of its new iPhone 11 line.

A round of bullish brokerage attention is keeping the wind at Apple's back, too. Among those chiming in was Monness, Crespi, Hardt, which lifted its AAPL price target to $300 from $265 -- a 23.3% premium to last night's close -- while Morningstar thinks Apple will return to growth in 2020, thanks to a strong iPhone 11 launch.

Some options traders are calling a short-term top for AAPL stock. Amid today's accelerated activity, the weekly 11/1 250-strike call has emerged as the most active AAPL option. It looks like speculators may be selling to open the weekly options, expecting the shares to stay below $250 through expiration at the close tomorrow, Nov. 1.

Universal Display Earnings, Revenue Blow Past Estimates

Universal Display stock is also popping post-earnings, last seen up 15% at $199.68. The LED technology firm banked a third-quarter profit of 78 cents per share on $97.7 million in revenue, easily topping analysts' expectations for earnings of 58 cents per share on $85.9 million in sales. The company also gave an upbeat full-year revenue forecast, and Citigroup boosted its OLED price target by $5 to $228 -- just below the stock's Sept. 6 record peak at $230.32.

More upbeat analyst notes could come down the pike for Universal Display, which is now up almost 114% year-to-date. While seven of the nine covering brokerages maintain a "hold" or "strong sell" recommendation on the stock, the average 12-month price target of $205.64 is a slim 2.8% premium to OLED's current perch.

Analysts Rush to Raise Cirrus Logic Price Targets Post-Earnings

The shares of Cirrus Logic tagged a two-year high of $69.26 earlier, last seen up 15.7% at $67.68. The upside comes after the audio chip producer's adjusted fiscal second-quarter earnings of $1.55 per share arrived above the consensus estimate, as did its quarterly revenue of $388.9 million. The company also lifted its current-quarter revenue guidance.

Susquehanna was quick to chime in, lifting its CRUS price target to $70 from $58, projecting a "$40 million annual opportunity" for the company, as it broadens its "design reach into the next generation of mainstream [Apple] AirPods." At least five other brokerage firms raised their price targets on the tech stock, too.

CRUS stock has now doubled in value year-to-date, and short sellers are starting to sweat. The 4.96 million shares controlled by these bearish bettors represents 8.6% of the stock's float, or 7.1 times the average daily pace of trading. A round of short covering could translate into buying power for Cirrus Logic.


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