Visa Stock Moves Higher on Piper Sandler Bull Note

The options pits already echo today's bullish analyst sentiment

Digital Content Manager
Jun 7, 2021 at 10:36 AM
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The shares of Visa Inc (NYSE:V) are up 1.8% to trade at $234.16 this morning, after the security earned an upgrade from Piper Sandler to "overweight" from "neutral," as well as a price-target hike to $260 from $234. The analyst in coverage cited the fast recovery of the U.S. economy amid ramped up vaccinations, which should help the company catch up to competition. Separately, Visa today announced it has partnered with Goldman Sachs (GS) to offer cross-border corporate payments.

On the charts, the security has been chopping higher, culminating in an April 29 record of $237.50. While shares have since cooled off from that peak, the pullback was captured by its 60-day moving average. Though it's struggling with resistance at the $234 mark today, the equity still sports a 17.4% year-over-year lead.

Analysts were already overwhelmingly bullish towards the equity coming into today, with 18 of the 20 in question carrying a "buy" or better rating, while only two said "hold." Plus, the 12-month consensus target price of $266.79 is a 13.9% premium to current levels.

The options pits echo that optimism, with an appetite for calls. This is per Visa stock's 10-day call/put volume ratio of 3.50 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands in the 86th percentile of its annual range, indicating calls are being picked up at a faster-than-usual rate. 

Drilling down to today's options activity, 26,000 calls have already crossed the tape, which is three times what is typically seen at this point. Most popular is the weekly 6/11 235-strike call, followed by the June 235 call, with new positions being opened at the former. 

Now seems like a great time to bet on Visa stock's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 19% sits in the extremely low second percentile of its 12-month range, suggesting option players are pricing in low volatility expectations at the moment.

 

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