FTSV Stock Attracts Options Bulls, Analysts

The stock hit yet another record high today

Deputy Editor
Mar 3, 2020 at 2:31 PM
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Drugmaker Forty Seven Inc (NASDAQ:FTSV) hit yet another all-time high of $94.68 today, and was last seen up 0.3% at $94.22. This comes just one day after its impressive 61% surge during yesterday's trading -- sparked by news that Gilead Sciences (GILD) agreed to purchase the company for $4.9 billion, or $95.50 per share. While today's pop is peanuts compared to yesterday's bull gap, analysts and options players are still making plenty of noise. Below, we'll dig into what Wall Street thinks the equity will do next. 

Both Sun Trust Robinson and Morgan Stanley downgraded the security to "hold" from "buy," but lifted their price targets to $95.50. The latter predicted limited upside above Gilead Sciences' buying price, but said there's a good chance that the company would close the deal. Meanwhile, no less than four analysts also downgraded the stock yesterday, but lifted their price targets to $95.50. 

This puts the consensus 12-month price target at $72.09 -- still a 23.6% discount to current levels. Coming into today analysts were overwhelmingly bullish on Forty Seven, with all seven in coverage calling it a "buy" or better. 

The options pits have exploded today. Over 4,000 calls and 1,360 puts have exchanged hands, 15 times the intraday average and volume pacing in the 100th annual percentile. It looks like the March 95 call is the most popular, with new positions being opened here, while the April 60 call is also seeing quite a bit of action.

For those wanting to get in on the action, options are relatively cheap right now. FTSV's Schaeffer's Volatility Index (SVI) of 104% sits lower than all but 23% of readings from the past year, implying that near-term options traders are pricing in low volatility expectations right now. 

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