Price Target Alert: Trading the Zacks price target change for T-MOBILE US INC. COMMON STOCK
The automated Quantcha Trade Ideas Service has detected a promising trade opportunity for T-MOBILE US INC. COMMON STOCK () for the 17-Nov-2017 expiration period. You can analyze the opportunity in depth over at the .
TMUS was recently trading at $64.72 and has an implied volatility of 28.42% for this period. Based on an analysis of the options available for TMUS expiring on 17-Nov-2017, there is a 41.19% likelihood that the underlying will close within the analyzed range of $60.12-$73.48 at expiration. In this scenario, the average linear return for the trade would be 69.44%.
Price target: Zacks Research has updated their six-month price target for TMUS to $66.80. This price target is a consensus price created from the price targets published by 19 participating analysts whose targets ranged from $34.00 to $80.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for TMUS has been updated to 1.5, which indicates a buy consensus from analysts. Sentiment has moved from 1.59 to 1.59 to 1.56 over the past three months.
Trade approach: The difference between the current price for TMUS and the mean price target is $5.29, which represents a 3.22% move (6.63% annualized). Since the 180-day implied volatility for TMUS is 27.60%, a neutral range-bound strategy could prove effective if the price target ultimately turns out to be accurate.
Upside potential: Using this neutral range-bound strategy, the trade would be profitable if T-MOBILE US INC. COMMON STOCK closed in the range $60.10-$74.90 on 17-Nov-2017. Based on our analysis, there is a 44.50% likelihood of this return. The maximum return for this trade would be 96.08% if T-MOBILE US INC. COMMON STOCK closed in the range $65.00-$70.00.
Downside risk: As with any options trade, there is a substantial downside risk where you may lose most or all of your investment.
To analyze this trade in depth, please visit the .
This is an automated post generated based on a market analysis of delayed data at 6/13/2017 11:19:00 AM ET. The analysis does not include brokerage fees or commissions and is not investment advice.