Schaeffer's 43rd Anniversary Stock Picks in 2024

Navient Stock Rises on Slew of Bull Notes

The stock has attractively priced options at the moment

Digital Content Manager
Oct 22, 2020 at 9:53 AM
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The shares of Navient Corp (NASDAQ:NAVI) are up 3.4% at $9.49 this morning, after the student-loan company earned an upgrade from Wedbush to "outperform" from "neutral," and no fewer than five price-target hikes, including one from Compass Point to $12.25 from $11, following an upbeat quarterly report. One of the analysts in coverage said the stock's selloff in the face of a solid quarter creates an attractive entry point for NAVI, and added that its dividend could arguably go higher.

Digging deeper, the security been slowly inching its way higher since dropping to its March 18, all-time-low of $4.07. And while shares have somewhat risen from that bottom, with newfound support at the 20-day moving average, the stock still has some ways to go before it reaches this year's pre-pandemic high near the $15 mark. In the last six months, however, NAVI has gained 39.1%.

Analysts were already mostly optimistic towards the equity coming into today, with three of the five in question sporting a "strong buy" rating. Echoing this is the stock's 12-month consensus target price of $12.33, which is a whopping 26.3% premium to current levels.

A short squeeze could create even more tailwinds for the security. Short interest is up 8% in the most recent reporting period, and the 14.46 million shares sold short make up a substantial 7.6% of Navient stock's available float. In other words, it would take over a week to buy back these bearish bets, at the equity's average pace of trading. 

Now certainly seems like a good time to weigh in on NAVI options. This is per the security's Schaeffer's Volatility Index (SVI) of 61%, which sits in just the 20th percentile of all other annual readings, meaning the stock sports attractively priced premiums at the moment. 


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