Apple, Groupon Stocks Pop After Analyst Upgrades – Schaeffers Research (blog)

Analysts are weighing in on Dow stock Apple Inc. (NASDAQ:AAPL), online discount provider Groupon Inc (NASDAQ:GRPN), and mining company AngloGold Ashanti Limited (NYSE:AU). Here’s a quick roundup of today’s bullish brokerage notes on shares of AAPL, GRPN, and AU.

KeyBanc Weighs In On Apple Stock

Apple stock is up 0.8% to trade at $158.23, after KeyBanc upgraded the Dow component to “overweight” from “sector weight,” on optimism the tech giant’s transition to a subscription-like strategy could offset weak iPhone sales and increase margins. The brokerage firm also said its surveys suggest the iPhone 7 is outselling the newer iPhone 8, while many customers are choosing to wait for the iPhone X.

AAPL shares hit a record high of $164.94 on Sept. 1, but have since fallen roughly 5%, amid pressure from reports of lackluster iPhone X sales, negative Apple Watch reviews, and reports of iPhone 8 battery swelling. Overall, the equity has shown a tendency to make bigger-than-expected moves over the past year, compared to what options traders have expected. This is evidenced by its Schaeffer’s Volatility Scorecard (SVS) of 99.

Groupon Stock Pops on Upgrade

Shares of Groupon stock are trading 4% higher at $4.82, after Cowen and Company upgraded the stock to “market perform” from “underperform” and raised its price target to $5.50 from $3.50 — territory GRPN shares haven’t visited since September 2016. The brokerage firm cited the company’s new product initiatives like Groupon+. The security struggled in the first half of 2017, hitting an annual low of $2.90 on June 12, but has since rallied back thanks in part to support from its 40-day moving average. 

Options traders on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been unusually bearish toward the equity of late, however. GRPN’s 10-day put/call volume ratio of 0.46 ranks in the 96th annual percentile. In other words, options traders have been buying to open puts relative to calls at an accelerated pace during the past two weeks.

AngloGold Ashanti Breaks Technical Resistance After Upgrade

A third stock on the rise this morning is AngloGold Ashanti stock, last seen up 4.7% to trade at $9.89, after J.P. Morgan Securities upgraded the stock to “overweight” from “neutral.” The brokerage firm also cut its price target on AU shares to $13.40 from $13.69 — still an upside of 36% to current levels.

AU stock has struggled over the past year, hitting an annual low of $8.89 on Aug. 25. Although the mining stock is still down 6.6% year-to-date, today’s jump helped the equity break through its 80-day moving average, which had acted as technical resistance since early September. Plus, now may be a good time to buy premium on the equity, as evidenced by its Schaeffer’s Volatility Index (SVI) of 39% — lower than 91% of all other readings from the past year. In other words, near-term options traders are pricing in relatively low volatility expectations for AU stock.

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