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Dick’s Sporting Goods Inc. (NYSE:DKS), Procter & Gamble Company (NYSE:PG) and Joy Global Inc. (JOYG) are three large stocks with favorable analyst coverage this week. Investors looking to take advantage of these opportunities within a largely bearish market may want to consider using long-term stock options as a substitute for equity in order to lower the amount of capital at risk and boost potential returns.

Dick’s Sporting is Under-Appreciated

Dick’s Sporting Goods Inc. (DKS), a sporting goods retailer offering a broad range of equipment, apparel and footwear, is under-appreciated at current levels, according to Citigroup. The analyst believes that the company’s second half of 2011 guidance is conservative and sees upside potential in the stock. Citigroup therefore reiterated its Buy rating and $43.00 per share price target on the stock.

Currently, at-the-money 37.50 January ’12 Dick’s Sporting Goods calls are trading at $3.10 per contract. If an investor purchased one contract for $310 and DKS moved up to $43.00 per share, they would realize a 77.4% return on their investment with just $310 at risk. This compares to $3,707 at risk and a 16.2% return on investment holding the underlying stock.

Restructuring Improves P&G’s Outlook

Procter & Gamble Company (PG), a provider of consumer packaged goods in more than 180 countries through various retailers, was upgraded to Outperform by BMO Capital this week. The analyst cited restructuring initiatives expected to be announced in December and improving shareholder returns as catalysts. Meanwhile, the analyst raised its price target from $71.00 to $75.00 per share.

Currently, at-the-money 65 January 12 Procter & Gamble calls are trading at $1.80 per contract. If an investor purchased one contract for $180 and PG moved up to $75.00 per share, they would realize a 455% return on their investment with just $180 at risk. This compares to $6,480 at risk and a 15.3% return on investment holding the underlying stock.

Pullback Makes Joy Global Attractive

Joy Global Inc. (JOYG), a manufacturer and servicer of mining equipment for the extraction of coal and other minerals and ore, was upgraded to a Buy at Jefferies this week. The analyst cited the recent pullback in the firm’s shares and its top-line outlook as catalysts for the move, and raised its price target from $95.00 to $100.00 per share for the stock.

Currently, at-the-money 77.50 January ’12 Joy Global calls are trading at $9.00 per contract. If an investor purchased one contract for $900 and JOYG moved up to $100 per share, they would realize a 150% return on their investment with just $900 at risk. This compares to $7,773 at risk and a 28.6% return on investment holding the underlying stock.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Options Plays For These 3 Large Cap Analyst Picks