Near-term options traders are call-heavy on AMAT
Analysts are weighing in on software stock Splunk Inc (NASDAQ:SPLK), footwear retailer Shoe Carnival, Inc. (NASDAQ:SCVL), and semiconductor equipment specialist Applied Materials, Inc. (NASDAQ:AMAT). Here's a quick roundup of today's bullish brokerage notes on shares of SPLK, SCVL, and AMAT.
Splunk Stock Hits Fresh High After Beat-and-Raise
Splunk stock is up 14% this morning at $79, touching a three-year high of $79.75, as analysts rush to raise their outlooks following the company's third-quarter earnings beat and upwardly revised full-year outlook. Mizuho was one of several brokerage firms to weigh in, upgrading SPLK this morning to "buy" from "neutral" while boosting its price target to $90 from $60. The highest price target, however, came from Maxim at $96.
The shares were already up 35.5% year-to-date, despite some choppy trading. Short sellers are seemingly expecting more upside, since the number of shorted shares fell by 20.1% during the last two reporting periods. But the 11.1 million Splunk shares still dedicated to short interest are equal to 7.6 times its average daily trading volume, so there's ample sideline cash that could come in and help fuel more upside.
Shoe Carnival Torches Short Sellers with Strong Quarter
Shoe Carnival also released better-than-expected third-quarter earnings and raised its full-year outlook, and the stock has jumped 25% to trade at $25.60 as a result. Plus, Wedbush and Jefferies raised their respective price targets to $27 and $22. The strong price action puts SCVL shares comfortably above their 200-day moving average, a trendline that's acted as strong resistance over the past year, though they still have work to do to reclaim their year-over-year breakeven level near $30.
The sudden jump on the charts is bad news for a new batch of short sellers. Specifically, short interest on Shoe Carnival surged 36.5% in the last reporting period alone, and the 1.9 million shares now sold short are the most since mid-2008.
AMAT Stock Hits Record High After Another Earnings Beat
Shares of Applied Materials are hitting record highs once again, last seen up 2% at $58.85, after the maker of semiconductor manufacturing equipment delivered yet another earnings beat and upbeat forecast. The stock has now roughly doubled over the past year, and analysts are expecting even more upside. The boldest price-target hike came from Credit Suisse at $72, while D.A. Davidson and J.P. Morgan Securities both set their marks at $70.
Near-term options traders are seemingly well positioned for this price action. AMAT stock has a Schaeffer's put/call open interest ratio (SOIR) of 0.66, ranking in the low 28th annual percentile. In other words, options traders targeting contracts expiring within three months are unusually call-skewed at the moment.