The firm upgraded Signet Jewelers stock to "overweight"
The shares of Signet Jewelers Ltd. (NYSE:SIG) are up 2.1% at $80.11 this morning, following an upgrade from Wells Fargo to "overweight" from "equal weight." The analyst also lifted its price target to $100 from $80, commending the company's improved capital structure, and adding the brokerage expects margins to rise to 10% -- nearly double the company's pre-pandemic levels -- thanks to a shift to digital sales.
SIG is well on its way towards its Sept. 2, five-year high of $88.49, with a pullback from the area contained by the 20-day moving average. The stock has been battling with the $79 level for the better part of the past week, but still boasts an impressive 187.6% lead this year.
Circling back to analyst sentiment, a round of similar bull notes may be overdue. Coming into today, just one of the five in coverage called SIG a "strong buy," while three said "hold," and one considered the stock a "sell."
Signet Jewelers stock looks ripe for a short squeeze, too. Short interest rose 4.7% in the last two reporting periods, and now makes up 9.3% of the stock's available float. Plus, it would take traders over six days to cover their bearish bets, at SIG's average daily pace of trading.
For those wanting to get in on Signet stock's next move, options look like the way to go. The equity's Schaeffer's Volatility Index (SVI) of 54% stands higher than a mere 7% of readings from the past 12 months. This means options traders are pricing in relatively low volatility expectations at the moment. What's more, the security's Schaeffer's Volatility Scorecard (SVS) ranks at 83 out of a potential 100, meaning SIG tends to outperform said volatility expectations, which is great for potential buyers.