Jefferies initiated coverage of RENT with a "buy" rating and a $13 price target
Rent the Runway Inc (NASDAQ:RENT) is surging today, last seen up 20% at $6.79, after Jefferies initiated coverage of the equity with a "buy" rating and a $13 price target. The firm is optimistic on the fashion resale sector, after consumer surveys pointed to the potential acceleration of a shift from shoppers towards value, with price and product uniqueness also driving interest.
Jefferies is joining an already bullish brokerage bunch. In fact, all six of the analysts covering RENT call it a "buy" or better, while the 12-month consensus target price of $22.63 is a whopping 240.8% premium to current levels.
Short sellers do not share that sentiment, leaving the equity ripe for a short squeeze. The 7.91 million shares sold short account for 13.8% of the stock's available float, or more than one week's worth of pent-up buying power.
Publicly traded since October, Rent the Runway stock has faced pressure at the 50-day moving average since the trendline first emerged in January. Today's pop has the shares eyeing their first close above it, however. Month-to-date, RENT currently sports an 18% lead.
The security's normally quiet options pits are bursting with bullish activity today. So far, 129 calls have been traded, or double what's normally seen at this point, compared to just 16 puts. Most popular by far is the April 7.50 call, followed by the March 5 call.