Gap Inc (NYSE:GAP) stock is up 2.3% to trade at $27.72 at last glance, after Baird and Telsey Advisory upgraded the retailer to "outperform" from "neutral" and "market perform," respectively. The latter hiked the security's price target to $32 from $26, and the former to $33 from $27.
GAP earlier broke above $28 to hit its highest level since May. The stock is now on track for a third-straight gain and sports a 17.1% year-to-date lead. A short squeeze could pad those gains; short interest is rapidly unwinding, down 8.1% in the most recent reporting period, yet the 20.21 million shares sold short still accounts for 9% of the equity's available float.
Analysts were split toward Gap stock coming into today, with nine calling it a "hold," while eight said "strong buy." But with a 12-month consensus price target of $28.61 only a 3.7% premium from its current perch, more bull notes could keep the wind at GAP's back.
Options traders lean firmly bullish, per GAP's 50-day call/put volume ratio of 16.67 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that stands higher than 89% of annual readings. This means calls are getting picked up at a much quicker-than-usual clip.
Premium is affordably priced, per the security's Schaeffer's Volatility Index (SVI) of 38% that ranks in the 9th percentile of its annual range, implying near-term option traders are pricing in low volatility expectations.
