Options Bulls Favor EBAY Despite Deutsche Bank Downgrade

The equity sports a 69% year-over-year lead, too

Digital Content Manager
Jan 28, 2021 at 10:31 AM
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The shares of eBay Inc (NASDAQ:EBAY) are up 0.3% at $58.56 at last check, pushing past a downgrade from Deutsche Bank to "hold" from "buy." The analyst in question said the company doesn't seem to be taking advantage of an online shift in consumer demand, adding that the recent appreciation of its shares creates a more balanced risk/reward ratio. 

The charts tell a different story. The security more than doubled off its March three-year lows to reach a July 13, all-time-high of $61.06. And while shares cooled off for a brief period, just yesterday they came back within striking distance of those record levels once again. EBAY is also receiving support from the 10-day moving average, and is up 69% year-over-year. 

Analysts were hesitant towards the security coming into today, leaving plenty of room for upgrades going forward. Of the 24 in coverage, 13 carried a tepid "hold" rating, while 11 said "strong buy." Meanwhile, the 12-month consensus target price of $62.71 is a 7.4% premium to current levels.

The options pits are overwhelmingly bullish, on the other hand. This is per the equity's  50-day call/put volume ratio of 3.09 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all but 10% of readings from the past year. In other words, long calls are being picked up at a faster-than-usual pace.   

 

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