AMD Deal Earns Xilinx Bevy of Bull Notes

The equity sports a 24% lead for the year

Deputy Editor
Oct 28, 2020 at 10:43 AM
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At least five analysts have chimed in with bull notes since yesterday's announcement that Advanced Micro Devices (AMD) will buy competitor Xilinx, Inc. (NASDAQ:XLNX) in a $35 billion all-stock deal. Already this morning, Citigroup and Deutsche Bank lifted their price targets, to $136 and $143, respectively, while J.P. Morgan upgraded the equity to "neutral" from "underweight" and upped its price target to $138 from $96. XLNX, this morning, has gone by the way of the broader market, off 2.6% at $121.18, at last check. 

While the equity may be cooling from yesterday's annual high of $130.40, it's still trading at its highest levels in over a year, with former pressure at the $120 mark looking like potential support going forward. For the year, XLNX is now up 24%.

A look at analyst sentiment coming into today shows that many members of the brokerage bunch still aren't convinced. Of the 15 in coverage, only three considered it a "buy" or better. Plus, the 12-month consensus price target of $119.47 is at a slight discount to current levels. 

The options pits have been quite bearish of late, too. In fact, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). XLNX sports a 10-day put/call volume ratio of 1.29, which stands higher than 95% of readings from the past year. This suggests a healthier-than-usual appetite for long puts of late. 

 

 

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