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Morgan Stanley Waxes Optimistic on Keurig Dr Pepper Stock

Puts have been preferred over calls in recent weeks

Managing Editor
Feb 24, 2020 at 10:40 AM
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Shares of k-cup maker Keurig Dr Pepper Inc (NYSE:KDP) are slightly lower amid the broad market sell-off this morning, down 1% at $29.22, at last check. However, the equity has landed a fresh upgrade out of Morgan Stanley to "equal weight" from "underweight," alongside a price-target hike to $29 from $28. There looks to be room for even more upgrades too, as seven of 10 covering firms sport a "hold" or "sell" rating heading into today.

In the options pits, puts have been preferred of late, leaving an opening for traders to jump further onto the bullish bandwagon. Specifically, Keurig Dr Pepper stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks in the 80th percentile of its annual range.

KDP has been inching its way higher on the charts, now back above its year-to-date breakeven mark. The security also sports a 17% premium to its late-February 2019 bottom, which found a floor of support at the 320-day moving average.

 

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