Analysts Hopeful About AMD Before Q3 Report

Options bulls are surrounding the stock ahead of the event , too

Deputy Editor
Oct 26, 2020 at 10:39 AM
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Semiconductor manufacturer Advanced Micro Devices, Inc. (NASDAQ:AMD) is set to post its third-quarter earnings after the close tomorrow, and its getting some analyst attention ahead of the event. Specifically, Susquehanna lifted its price target to $95 from $85, on grounds that a growing next-gen gaming console market, and continuing strength in the PC market will be enough for the company to beat out analysts' estimated for the quarter. As a result, AMD is up 3.1% at $84.59. 

This puts AMD back above its 10-day moving average, which has acted as pressure on the charts as of late. While the $89 mark rejected an attempt to rally back toward its Sept. 2 all-time high of $94.28, the 70-day captured most of this pullback. For the year, AMD is up 83.3%. 

Options trading is ramping up ahead of the event, too, with 131,000 calls across the tape so far -- two times the intraday average -- compared to 36,000 puts. The most popular is the 10/30 90-strike call, followed by the 85-strike call in the same weekly series, with positions being opened at both positions. 

More analyst upgrades could be on the way, coming into today, 12 of the 25 analysts in coverage consider AMD a "hold." What's more, the 12-month consensus price target of $81.88 is a 3.3% discount to current levels. 

A look at AMD's post-earnings past shows five negative earnings reactions in the past two years, including a 15.4% plummet two years ago. On the other hand, of the three reactions that were positive during the past two years, enjoyed a 12.5% surge in July, and a 19.9% gap in January 2019. This time around, the options pits are pricing in a 10.6% move, regardless of direction, slightly bigger than the 8.8% move averaged during these past eight post-earnings sessions. 

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