Posts Tagged ‘Upgrades and Downgrades’
Thursday, September 9th, 2010
UBS downgraded Intel (NASDAQ:INTC) to neutral from buy yesterday, lowering its 12-month price target to $19.50 from $28. UBS officials based this move on recent meetings with PC supply chain companies in Asia. They believe PC demand is weak in the near-term, which could negatively impact demand for processors. Intel’s customers are expecting to see a price reduction of 15% or more for mainstream processors.
The UBS team does not expect this environment to impact Intel alone; Hewlett-Packard (NYSE:HPQ), Varian Semiconductor (NASDAQ:VSEA), Western Digital (NYSE:WDC), and other names were downgraded at the firm. Analysts also slashed the overall PC unit growth forecast to 13.1% from 18.4% for 2010 and adjusted the 2011 growth outlook to 9.1% from 9.4%. (more…)
Tags: INTC, Intel, Long Call, Put Butterfly, Upgrades and Downgrades
Posted in blog, Bulls Vs. Bears | No Comments »
The technology sector was under the microscope Friday following mixed reports from Research in Motion (NASDAQ:RIMM) and Oracle Corp. (NASDAQ:ORCL). While many investors focused, respectively, on selling and buying these names, Stifel Nicolaus turned its attention to a historically newsworthy tech stock, Dell (NASDAQ: DELL). The firm reiterated its “buy” rating on the shares but lowered its 12-month price target by 11% from $18 to $16. This represents projected upside of less than 25%.
Earlier in the week, on the eve of its annual analyst day, Dell issued its first official guidance in four years, saying it expects fiscal year 2011 revenue to increase 14% to 19% over this year’s levels. The computer company also said operating income should rise by 18% to 23% throughout the current year. The shares dropped 6.4% in Thursday’s session on the heels of this announcement and were virtually flat in Friday’s trading. DELL has drifted lower since late April (along with the tech sector and the broader market) and remains below its 50-day and 200-day simple moving averages (SMA). At $14.70 and $14.68, respectively, these trendlines are in danger of a bearish cross.
Stifel still believes DELL is worthy of a “buy” rating but appears the bullishness has limits, judging from its adjusted price target. The “buy,” “hold,” and “sell” scale is somewhat limiting, but options traders have access to a full arsenal of strategies they can use depending on their outlook and other factors. Two option strategies on DELL – one bullish, one bearish – are detailed below. Remember these are hypothetical examples, not recommendations. Consider your risk/reward parameters and trading goals before executing any new trades. (more…)
Tags: Bear Call Spread, dell, Options Strategies, Ratio Call Spread, Stifel Nicolaus, Upgrades and Downgrades
Posted in blog, Bulls Vs. Bears | No Comments »
Wednesday, June 23rd, 2010
Tuesday morning, Mattel (NYSE:MAT) was upgraded at Caris & Company to a “buy” rating from an “above average” designation. The firm also adjusted its 12-month price target to $32 from $29 (representing a change of 46% from current levels) and lifted 2010 earnings estimates by nine cents to $1.75 per share (which is, oddly enough, still below the consensus view of $1.81).
The brokerage noted that MAT shares could benefit from Toy Story 3 revenue, as the Pixar film (which features Barbie and other MAT toys) has set box-office records for the studio. Looking ahead for 2011, the covering analyst expects the company to benefit from the release of Cars 2 and Green Lantern, as well as lower costs for plastic resin.
MAT shares rose initially on this vote of confidence but settled lower on the day, edging back below its 50-day simple moving average. The shares are fighting higher from their early-June bottom but have consolidated around the $22 mark for the last several sessions. Caris’ projected target would place MAT shares at an all-time high; the stock hit its previous peak of $29.71 in April 2007.
While traditional brokers are confined to the scale of “buy,” “hold,” and “sell,” ratings, options traders have access to a full arsenal of strategies to use depending on the situation. These can be fine-tuned depending on an investor’s trading thesis and can be impacted by forces other than just the stock itself (including time and implied volatility). Two option strategies on MAT – one bullish, one bearish – are detailed below. Remember these are hypothetical examples, not recommendations. Consider your risk/reward parameters and trading goals before executing any new trades.
*Prices given as of Tuesday afternoon. MAT was trading at $21.93. (more…)
Tags: Analysts, Bull Call Spread, Long Put, MAT, Mattel, Options Trading Strategies, Pixar, Toy Story 3, Upgrades and Downgrades
Posted in blog, Bulls Vs. Bears | No Comments »
Williams Companies (NYSE:WMB) was given a solid vote of confidence on Friday, as Goldman Sachs upped its rating on the natural gas company to “conviction buy” from “buy.” The brokerage said it was placing WMB on its conviction buy list “with 35% total upside to our $28, 12-month target price. An investment in WMB,” Goldman noted, “provides a superior ‘Growth & Income’ vehicle for today’s uncertain market … valuation is compelling, trading at a [five times] 2010 EBITDA multiple versus peers at 8x and its two-year average of 7x.”
WMB moved slightly higher on the day while the broader market hovered near the breakeven zone. Since May 25, WMB shares have retraced 18% of their downside; the stock lost a quarter of its value between its late-April peak and its late-May valley. Is the selling pressure over for WMB shares? Does Goldman Sachs have the courage of its “conviction?”
While traditional brokers are confined to variations of “buy,” “hold,” and “sell,” traders in the options market have many tools at their disposal. Option strategies can be fine-tuned depending on an investor’s level of optimism (or pessimism) and can be impacted by forces other than just the stock itself (including time and changes in volatility).
*Prices given as of Friday afternoon. WMB was trading at $21.36. (more…)
Tags: Bear Call Spread, Goldman Sachs, Long Call, Natural Gas, Option Strategies, options trading, Upgrades and Downgrades, Williams Companies, WMB
Posted in blog, Bulls Vs. Bears | No Comments »
Thursday morning, Credit Suisse lifted its rating on First Solar (NASDAQ:FSLR) to “outperform” from “neutral,” which is essentially raising a “hold” rating to a “buy.” The firm also bumped the 12-month price target to $150 from $110.20.
Credit Suisse analysts expressed that the upside in pricing for the second and third quarters has not yet been reflected in the stock’s price. This suggests roughly 20% of upside from current levels. The Street appreciated this vote of confidence, sending the stock up more than 4% against the backdrop of an uninspired market.
FSLR dipped along with the broad market over the past several weeks, losing 34% of its value from its April 29 high to its June 8 low. In the past week-and-a-half, however, the shares have attempted recovery, tacking on more than 20%. Thursday’s gains boosted the shares above their 50-day moving average.
Investors who want to jump on the bull side of FSLR might find the stock’s price tag a bit off-putting – 100 shares currently costs nearly $12,400. The typical requirement of less initial capital is one reason traders have continually flocked to the option markets, whether they are bullishly or bearishly inclined. Two option strategies on FSLR – one bullish, one bearish – are detailed below. Remember these are hypothetical examples, not recommendations. Consider your risk/reward parameters and trading goals before executing any new trades.
Want to learn more about different options strategies or the OptionsHouse platform? Stop by our events page to review our schedule of free weekly webinars and sign up for one that interests you. Next week’s strategy webinar is a look at the risks and rewards of long puts.
(more…)
Tags: Alternative Energy, Credit Suisse, First Solar, FSLR, Long Put, Synthetic Long Stock, Upgrades and Downgrades
Posted in blog, Bulls Vs. Bears | No Comments »
Wednesday, June 16th, 2010
Earlier this week, Standpoint Research upped its rating on NetEase.com (NASDAQ:NTES) to a “buy” from a “hold,” maintaining its 12-month price target of $42. The Beijing-based NTES operates an online community and e-commerce services throughout mainland China. An analyst with the firm noted that “At 10x estimates for next year, the concerns regarding margins, regulations and competition are already priced in.”
From a technical perspective, NTES hasn’t behaved very bullishly of late. Since its late-September peak, the stock has backpedaled 36% and is below multiple simple moving averages, including the 50-day trendline. NTES recently rebounded off its 50-month trendline, however, so it is possible that selling has abated as Standpoint projects.
For investors who are looking to add option strategies to their trading arsenals, two hypothetical strategies on NTES – one bullish, one bearish – are described below. Remember these serve as examples, not recommendations. Consider your own risk/reward parameters and personal trading goals before executing any new trades.
Want to learn more about different options strategies or the OptionsHouse trading platform? Stop by our events page to review our schedule of free weekly webinars and sign up for one that interests you. Next week’s strategy webinar is a look at the risks and rewards of long puts. (more…)
Tags: Bear Put Spread, Bull Call Spread, China, NetEase.com, NTES, Online Options Broker, Option Trading Strategies, OptionsHouse, Upgrades and Downgrades
Posted in blog, Bulls Vs. Bears | No Comments »
Thursday morning, an analyst with MKM Partners lifted his rating on eBay (NASDAQ: EBAY) to “neutral” from “sell.” (Neutral is essentially a “hold” rating). MKM maintains a 12-month price target of $20. The analyst noted that while his firm still has concerns about EBAY’s drooping market share in the e-commerce segment, they are “hard-pressed to identify a near-term negative catalyst that might drive the shares below our … fair value estimate.” In other words, EBAY may not move higher, but it might not move lower either, at least according to MKM Partners.
Looking at an EBAY chart, it’s clear that the stock has been relatively range-bound for several months. Since September 2009, the stock has made minimal movement below 21 or above 25, despite historically high volatility in the broader market and the tech sector.
There isn’t much a stock trader can act on when it comes to a “hold” or “neutral” rating. After all, it seems counterintuitive to buy a stock that isn’t going up or sell a stock that isn’t going lower. That could be where option strategies come in. Two hypothetical option strategies on eBay – one neutral, one bearish – are outlined below. Remember these are merely examples, not recommendations. Consider your own risk/reward parameters and personal trading goals before executing any new trades. (more…)
Tags: Bear Call Spread, EBAY, Iron Condor, Long Put, Options Strategies, options trading, Technical Analysis, Upgrades and Downgrades
Posted in blog, Bulls Vs. Bears | No Comments »
Microsoft Corp. (NASDAQ: MSFT) has dropped 16% over the last month and has breached previous support at its 50-week moving average. But a disconcerting pullback for some means a buying opportunity for others, and on Thursday, analysts with FBR upgraded MSFT shares to “outperform” from “market perform.” (This is essentially a move to “buy” from “hold”).
The new MSFT bulls cited a price-to-earnings ratio of 11.2 and the stock’s recent underperformance of its technology peers, presenting investors with a potential opportunity to buy on the dip.
For bullish investors who don’t want to simply buy shares (or who want an opportunity to hedge their position), there are many options-trading strategies to explore. The same is true for traders who disagree with FBR’s thesis and who want to take advantage of potential downside in the shares. Two hypothetical options trades on the stock – one bullish, one bearish – are outlined below. Remember these are merely examples, not recommendations. Consider your own risk/reward parameters and personal trading goals before executing any new trades.
(more…)
Tags: Bear Put Spread, Collar, Microsoft, MSFT, Options Strategies, options trading, Upgrades and Downgrades
Posted in blog, Bulls Vs. Bears | No Comments »
