Retail Stock Upgraded on Web Traffic Potential

Puts have recently turned popular in the options pits

Deputy Editor
Sep 15, 2020 at 3:10 PM
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The shares of VF Corporation (NYSE:VFC) are up 2.2% at $74.84 at last check, after BTIG upgraded the stock to "buy" from "neutral." The firm cited growing demand as well as web traffic, and noted that the concerns involving excess inventory for a couple of their brands are "well on their way to being resolved." 

At the height of the day, VFC was trading at $76.24, above the $75 for the first time since early March. Still down 25.5% year-to-date, the equity is on track to score its fourth-straight weekly win. 

VFC Sep 15

On the analyst front, 10 carry a "buy" or better rating on the security, with the remaining 11 at a tepid "hold." Meanwhile, the 12-month consensus price target of $67.25 is a 9.6% discount to current levels. This leaves plenty of room for upgrades/price-target hikes that could carry the stock higher.

Amid limited absolute options volume, VFC options have taken a bearish turn in the last 10 days. The stock's 50-day call/put volume ratio of 2.44 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 70% of all readings -- revealing a strong preference for puts of late. 

Options look like a decent way to go when weighing in on VFC. The apparel stock's Schaeffer's Volatility Index (SVI) of 43% sits higher than 25% of readings in its annual range, suggesting short-term options are pricing in relatively low volatility expectations. In other words, the stock's near-term options are attractively priced at the moment.

 

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