Digital River (DRIV: sentiment, chart, options) has vaulted more than 10% higher today following an upgrade to "buy" from "hold" by Deutsche Bank analyst Jeetil Patel. Patel also lifted his price target on DRIV to $30 from $20 per share. In a research note, the analyst said, "business trends have been improving" in the first quarter, and that "future prospects look particularly healthy."
Patel believes that DRIV could diversify revenues shifting more toward direct Web distribution and facing growing costs in managing e-commerce internally. As a result of his improved view of the company, Patel upped his first-quarter earnings estimate to 51 cents from 49 cents per share, with full-year earnings seen at $2.05, up from $2 per share.
Checking in with the rest of the brokerage bunch, Deutsche Bank has gone out on a limb with today's "buy" rating. Currently, only 3 analysts rate DRIV a "buy," while 10 have doled out "holds" and another 2 have issued "sells," according to Zacks. Meanwhile, Thomson Reuters reports that the consensus 12-month price target for DRIV rests at $26 per share - a discount to the stock's current trading range just shy of $27. Any additional upgrades or price-target increases could provide additional buying pressure for the security.
Technically speaking, DRIV has rallied into long-term resistance at the 27 level following this morning's upgrade. Despite several attempts to best resistance in the region, the shares have not closed above $27 per share since Oct. 20, 2008. If DRIV can best this technical hurdle, the next region of resistance doesn't materialize until the 30 level - which is home to the stock's February 2008 lows and its declining 10-month moving average.
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