Bulls Take Notice After J.P. Morgan Hands Out Round of Upgrades

SNAP and PENN both earned price-target hikes from J.P. Morgan Securities

Deputy Editor
Jul 15, 2020 at 12:05 PM
facebook twitter linkedin

J.P. Morgan Securities passed out a round of bull notes today, with a specific focus on the tech sector. Two names in particular the analyst highlighted were Barstool Sports-partner Penn National Gaming, Inc (NASDAQ:PENN) and social media stalwart Snap Inc (NYSE:SNAP). Below, we'll take a look at how these two stocks are behaving today, and the heightened call trading surrounding both. 

Starting with PENN, J.P. Morgan Securities upped its price target to $36 from $28, and maintained its "overweight" rating. In response, PENN is flying higher, up 14.5% at $33.35 midday. The security is set to topple its 20-day moving average, which has acted as pressure since late-June.

PENN July 15

Despite an impressive 29% gain for the year, short sellers are starting to climb aboard the gaming equity, and the 19.6 million shares sold short make up a solid 16.7% of PENN's available float. Should today's surge change these bears' minds, an unwinding of shorts could potentially put even more wind at the stock's back. 

A look at today's options activity shows a strong preference for calls. So far, 25,000 calls have crossed the tape -- double the intraday average -- compared to 7,915 puts. The July 33.50 call is seeing a lot of action, with positions being bought to open here. 

Moving on to SNAP, the J.P. Morgan hiked its price target on the stock to $22 from $28 and maintained its "overweight" rating. At last check, snap is up 0.3% at $23.81, once again contending with overhead pressure at its 10-day moving average. This trendline helped guide the security toward its July 9 all-time high of $26.76, though the shares fell below here just a few days later. 

SNAP July 15

Other analysts are chiming in with price-target hikes today, too. Cowen and Company and MKM Partners both lifted their estimates to $29. This puts the consensus 12-month price target at $21.49, which is a 10.2% discount to current levels. 

Options players are favoring calls for SNAP, too. So far, 72,000 calls have exchanged hands -- 1.6 times the intraday average. The most popular is the August 25 call, where positions are being opened. 




Special Offers from Schaeffer's Trading Partners