QCOM Attracts Options Bulls, Analysts After Fiscal Q2 Beat

Already, call volume is surging during today's trading

Deputy Editor
Apr 29, 2021 at 10:35 AM
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Qualcomm, Inc (NASDAQ:QCOM) stepped into the earnings confessional last night, posting fiscal second-quarter profits of $1.90 per share and revenue of $7.62 billion, handily topping analysts' expectations. The chip company attributed strong handset shipments in China and an uptick in smart phone demand for the beat, and also lifted its full-year guidance for handset shipments. 

The equity is up 6% at $144.72 this morning, set to top its 70-day moving average for the first time since its early February bear gap -- should today's gains hold. While QCOM is still a ways away from its Jan. 20 all-time high of $167.94, the equity looks to have found a floor near the $125 level, and is up over 81% year-over-year. 

Several analysts have responded to the upbeat fiscal second-quarter report. No less than five analysts lifted their price targets, including Piper Sandler, which upped its price target to $175 from $160. Citigroup was the outlier, slashing its price estimate to $154 from $165. The brokerage bunch is leaning bullish, with thirteen considering QCOM a "buy" or better, compared to eight "hold' ratings. Plus, coming into today, the 12-month consensus price target of $171.81 was an 18.7% premium to current levels. 

The options pits have been leaning bearish, however. While call volume is still outpacing put volume on an overall basis, the equity's 10-day put/call volume ratio stands higher than 72% of  readings from the past year at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), suggesting long puts have been more popular than usual of late. 

Today's option trading is quite call-heavy, however. Within the first hour of trading, 23,000 calls and 9,914 puts have exchanged hands -- quadruple the average intraday amount. The most popular contract is the 4/30 145-strike call, followed by the 140-strike call in the same series. 

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