Barclays sees upside for Alibaba, Churchill Downs

Investing.com -- Barclays Equity Derivatives Strategy identified three trading opportunities in its bi-weekly catalyst monitor covering the period from August 12 to August 25.

For Alibaba Group (NYSE: BABA), Barclays recommended buying call spreads ahead of the company's earnings report scheduled for August 20 before market open. The firm's equity research analyst Jiong Shao pointed to several positive factors including accelerating growth in Alibaba's Cloud business, AI annual recurring revenue exceeding targets, faster-than-expected reduction in quick commerce losses, and stabilizing profitability in the core e-commerce business.

The implied move for earnings stands at 6.0%, below the 6-quarter average realized move of 7.6%. Barclays suggested buying the August 21 $133/$145 call spreads at $2.40, or 1.9% of the reference price of $127.80.

For Under Armour (NYSE: UAA), Barclays analyst Adrienne Yih downgraded the stock to underweight following disappointing fiscal first-quarter results that included a revenue miss and lower fiscal 2027 sales guidance. The downgrade reflects intensifying competition, weak pricing power, and tariff pressures that could delay the company's turnaround efforts. Barclays recommended buying September 18 $5 puts and selling Deckers Outdoor (NYSE: DECK) September 18 $90 puts for 1.2%.

For Churchill Downs (NASDAQ: CHDN), Barclays analyst Brandt Montour identified potential upside from the newly launched Thoroughbred Championship Series, which could extend fan engagement beyond Derby season and generate additional revenue from ticketing, wagering, sponsorship, and media rights. Barclays recommended buying December 18 $100/$110 call spreads at $2.80, or 3.1% of the reference price of $88.60.

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