Synaptics Stock Soars on Sales-Boosting Purchase

Susquehanna upgraded the stock to "positive" from "neutral"

Deputy Editor
Jul 21, 2020 at 10:23 AM
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The shares of Synaptics Inc (NASDAQ:SYNA) are up 12.1% at $80.75 at last check --one of the best stocks on the Nasdaq today -- after making an all-cash deal to acquire video interface DisplayLink for $305 million. This will extend SYNA's video interface capabilities, and the company expects to add $94 million in annualized sales from the purchase. Following the news, Susquehanna upgraded the stock to "positive" from "neutral," with an added price-target hike to $100 from $60. Rosenblatt Securities and JP Morgan have chimed in as well, raising their price targets to $86 and $67, respectively. 

Today's pop has SYNA breaking out past the $73 region, an area that has rejected the stock's highest rallies since early March, as well as trading at levels not seen since mid-February. In the past 12 months, the equity is up 152%.

Coming into today, five out of the 10 analysts in coverage sport a "buy" or better," while four are settled at a tepid "hold" rating, with one at a "strong sell." More price-target hikes could be on the way, as well, as SYNA is now in line with the 12-month consensus price target of $80.56. 

Meanwhile, the 5.15 million shares sold short account for 15.6% of the stock's available float, or nearly ten days worth of pent-up buying power. An unwinding of these bearish bets could certainly push the stock higher.

Though options volume is generally low on an absolute basis, calls have crossed the tape so far today at 11 times what's typically seen, with the September 70 call the most popular. This penchant for calls has been standard for the past 10 weeks, as SYNA's 50-day call/put volume ratio of 4.47 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 92% of readings from the past year. 

 

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