Morgan Stanley upgraded U to “overweight” from “equal weight”
Shares of Unity Software Inc (NYSE:U) are 7.3% higher pre-market, after a bull note from Morgan Stanley. The analyst upgraded U to “overweight” from “equal weight,” citing the video game maker’s position as “the clear game engine,” and also saying that the “company has maintained its 70% market share despite significant backlash from its customer base.”
Coming into today, analysts were hesitant toward U. In fact, 12 of the 19 in question carry a tepid “hold” or worse rating, leaving room for a shift in sentiment amongst the brokerage bunch.
Options traders, meanwhile, are exceptionally bullish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), U sports a 50-day call/put volume ratio of 4.75 that ranks higher than 89% of annual readings.
These traders are in luck, as Unity Software stock sports attractively priced premiums. This is per its Schaeffer’s Volatility Index (SVI) of 48% that sits higher than only 4% of readings from the past 12 months, indicating options traders are pricing in low volatility expectations.
The security touched its most recent annual high back in December, when it touched $43.54, which is a far cry from Friday’s close of $16.37. The stock has steadily worked its way lower over the last eight months, thanks in part to consistent pressure from its 40- and 80-day moving averages. The shares now sport a 60% year-to-date deficit.