Skechers Stock Snags Fresh High on Double Dose of Bull Notes

Short-term options look attractively priced right now, too

by Emma Duncan

Published on Dec 18, 2019 at 1:34 PM
Updated on Jun 24, 2020 at 10:16 AM

Sneaker name Skechers USA Inc (NYSE:SKX) is enjoying a 3% lift this afternoon, now trading at $42.69 -- just off an annual high of $42.98 -- after receiving a double dose of bull notes. Deutsche Bank initiated a "buy" rating and $49 price target, while UBS raised its own price target by $1, to $49. The matching price targets represent an 18.4% upside to Tuesday night's close, and are in-line with the overall optimistic analyst outlook on the equity, where six of the nine firms in coverage sport a "strong buy" recommendation.

SKX has been climbing higher in 2019, most recently recovering from its late-August lows. Now back in annual high territory, the equity hosts an impressive 86% year-to-date lead, with a layer of support having stemmed from the ascending, 40-day moving average.

Digging deeper, the stock's Schaeffer's put/call open interest ratio (SOIR) comes in at 1.10, and ranks in the 80th percentile of its annual range. In simpler terms, this shows a larger-than-usual put-skew among options traders.

Lastly, short-term options premiums on Skechers stock look relatively cheap at the moment, based on the equity's Schaeffer’s Volatility Index (SVI) of 28%. This ratio ranks in the bottom-most percentile of its annual range, meaning those looking to speculate on SKX with options, should do so now.


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