Price Target Alert: Trading the Zacks price target change for TELEFONICA
The automated Quantcha Trade Ideas Service has detected a promising
TEF was recently trading at $10.38 and has an implied volatility of 17.64% for this period. Based on an analysis of the options available for TEF expiring on 15-Jun-2018, there is a 23.39% likelihood that the underlying will close within the analyzed range of $11.70-$14.30 at expiration. In this scenario, the average linear return for the trade would be 172.04%.
Price target: Zacks Research has updated their six-month price target for TEF to $13.00. This price target is a consensus price created from the price targets published by 1 participating analysts whose targets ranged from $13.00 to $13.00.
Mean recommendation: Zacks normalizes analyst recommendations to a 1-5 scale where 1 indicates a strong buy. Their mean recommendation for TEF has been updated to 2.83, which indicates a hold consensus from analysts. Sentiment has moved from 3.00 to 3.20 to 3.20 over the past three months.
Trade approach: The difference between the current price for TEF and the mean price target is $2.62, which represents a 25.24% move (57.84% annualized). Since the 180-day implied volatility for TEF is 0.00%, a bullish strategy could prove effective if the price target ultimately turns out to be accurate.
Upside potential: Using this bullish strategy, the trade would be profitable if TELEFONICA closed at or above $11.00 on 15-Jun-2018. Based on our analysis, there is a 40.44% likelihood of this return.
Downside risk: As with any options trade, there is a substantial downside risk where you may lose most or all of your investment.
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This is an automated post generated based on a market analysis of delayed data at 10/19/2017 1:00:28 PM ET. The analysis does not include brokerage fees or commissions and is not investment advice.