ZG Named "Catalyst Call Buy" by Deutsche Bank

Zillow could be ripe for even more upgrades, too

Digital Content Manager

Sep 16, 2020 at 9:09 AM

The shares of Zillow Group Inc (NASDAQ:ZG) are set to open at fresh highs this morning, up 3.1% at $93.80 in pre-market trading. This surge comes on the back of an upgrade from Deutsche Bank to $115 from $106 -- a more than 26% premium to last night's close. The analyst named Zillow a "catalyst call buy" and added that the $4.8 billion special purchase acquisition company (SPAC) deal for real estate start-up Opendoor could help Zillow "get more valuable attribution for the Homes Segment of its business."

With the housing market booming, it's no wonder Zillow has been aggressively clawing its way back up the charts. The shares briefly consolidated below the $65 level -- home to its pre-pandemic highs -- back in July and early August, but were able topple this level with the help of the 10-day moving average. ZG's 30-day moving average has also been significant -- capturing a pullback earlier this month. For the year, ZG has nearly doubled.

This could leave the door wide open for even more bull notes. While 10 covering ZG call it a "buy" or better, 10 still say "hold," and two a "sell" or worse. Plus, coming into today, the 12-month consensus price target of $85.58 sits at a 6% discount to Monday's close.

Option traders have been quicker to come around to ZG. The stock sports a 50-day call/put volume ratio of 3.02 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 90% of readings from the past year, suggesting long calls have rarely been more popular.

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