Wells Fargo lifted its rating from “overweight” from “underweight”
Wells Fargo doled out a double upgrade for Cinemark Holdings, Inc. (NYSE:CNK) to “overweight” from “underweight” and hiked its price target to $23 from $13. The analyst in question cited improved performance and strong demand. CNK is up 3.9% at $19.50 before the open.
Today’s pop has shares looking to open at their highest level since October and push above recent pressure near the $19 level. The equity bounced off the $17.60 floor earlier this month and so far this year has added 33.1%.
Analysts are still split on CNK, indicating they could soon echo Wells Fargo’s stance. In fact, five of the 10 in coverage carry a tepid “hold” or worse rating. An unwinding of short interest could also boost Cinemark stock, as 24.9% of its available float is sold short.
The options pits are firmly bearish. This is per the security’s 10-day put/call volume ratio of 6.57 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 91% of readings from the past year.
Premium players are pricing in low volatility expectations, making this a good opportunity to weigh in on the stock’s upcoming moves with options. CNK’s Schaeffer’s Volatility Index (SVI) rating of 40% ranks higher than just 13% of readings from the last 12 months.