Morgan Stanley sees nearly 40% more upside for Box stock
The shares of cloud management concern Box Inc (NYSE:BOX) were last seen up 3.8% at $25.29 premarket, following an upgrade from Morgan Stanley to "overweight" from "equal-weight." The analyst also lifted its price target to $34 from $32, noting the company's "strong large deal momentum." The note added that even in a challenging macro environment, the company should be able to continue to benefit from its increasing variety of Suites, especially as the corporate environment continues to shift.
The security saw some impressive momentum in late-June through August, running up to the $31 level before losing steam. A much smaller bounce occurred in early September, though this rally was rejected by the 120-day moving average. It's not all doom and gloom, though, as BOX has held onto a 3% year-over-year lead, with support at the 500-day moving average -- the trendline responsible for BOX's aforementioned late-June rally. It's worth noting that BOX is sitting deep in "oversold" territory with a 14-day Relative Strength Index (RSI) of 16, which could indicate a short-term bounce is already in the cards.
A shift in sentiment among options traders could also provide tailwinds. The security's Schaeffer's put/call open interest ratio (SOIR) of 0.87 stands higher than all but 1% of readings from the past year. In other words, short-term options traders have rarely been more put-biased.
Short selling is starting to ease, dropping 2.5% in the last reporting period. However, there's still some pessimism to be unwound, as the 7.71 million shares sold short make up 5.6% of the stock's available float, or over a week's worth of pent-up buying power.