J.P. Morgan thinks Bloom Energy stock will benefit from long-term tailwinds
J.P. Morgan Securities upgraded Bloom Energy Corp (NYSE:BE) to "overweight" from "neutral," though also cut its price target to $20 from $22. The analyst in coverage said BE's recent pullback was "overdone," and added this could be an opportunity to take advantage of volatility to buy a stock that will likely see prolonged tailwinds from a transition to clean energy.
Options bulls seem to be taking cues. So far, 1,148 calls have been traded -- four times the volume that's typically seen at this point -- compared to 349 puts. The most popular contract is the June 15 call, followed by the January 2024 17-strike call, with positions being opened at both.
This penchant for bullish bets hasn't always been the norm, given that the equity's 50-day put/call volume ratio over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands in the 98th percentile of readings from the past 12 months.
Options are affordably priced, too, making this an opportune time to weigh in on Bloom Energy stock's next moves. In fact, its Schaeffer's Volatility Index (SVI) of 61% ranks in the 15th percentile of its annual range.
Short sellers are already hitting the exits, with short interest down 7% over the last two reporting periods. There's plenty of pessimism left to unwind, though, as the 18 million shares sold short still account for 10% of the stock's available float, or more than one week's worth of pent-up buying power.
Last seen up 6.2% at $14.50, the security is bouncing off a dip to a May 12, one-year low of $12.33. The shares remain firmly below the 20-day moving average, and have shed 24.4% in 2023.