Lowe's (NYSE: LOW) implied volatility of 38 above 26-week average of 33 into EPS. LOW is expected to report EPS of .61 cents on 8/20, according to Thomson First Call. Deutsche Bank said on 8/16, "while we are slightly reducing our 2Q and FY EPS on a weak environment, we note that consensus already reflects conservative sales and EPS views." LOW September option implied volatility of 38 is above its 26-week average of 33 according to Track Data, suggesting larger price fluctuations.

Pep Boys (NYSE: PBY) September implied volatility Elevated at 61 into EPS. PBY, an operator of automotive retail and service chains, has a market cap of $784 million. PBY is expected to report EPS on 8/22. Morgan Joseph CO says, "update on potential sale/leaseback of property possible. During its last conference call, PBY confirmed a 2004 appraisal that valued its owned property as around $900 million and belief that today it is worth in excess of $1 billion." PBY September option implied volatility of 61 is above its 26-week average of 38 according to Track Data, suggesting larger price risk.

Daily options update is provided by stock specialist Paul Foster of theflyonthewall.com.

MOST NOTEWORTHY: The automotive sector was today's most noteworthy initiation:

• Prudential initiated the automotive manufacturers industry and automotive retail industry with Favorable ratings and the automotive parts and equipment industry with an Unfavorable rating. The firm initiated coverage on following stocks:
  
• Overweight-rated names included Autoliv Inc (NYSE: ALV), Group 1 Automotive, Inc (NYSE: GPI), Honda Motor Co, Ltd (NYSE: HMC), Johnson Controls, Inc (NYSE: JCI), Sonic Automotive, Inc (NYSE: SAH), & Toyota Motor Corp (NYSE: TM).
  
• Neutral Weight-rated names included AutoNation, Inc (NYSE: AN), DaimlerChrysler (NYSE: DCX), Magna International Inc (NYSE: MGA) and United Auto Group, Inc (NYSE: UAG).
  
• Underweight-rated names included Ford Motor Co (NYSE: F), General Motors Corp (NYSE: GM) and Gentex Corp (NASDAQ: GNTX).

OTHER INITIATIONS:

• Bernstein initiated JPMorgan Chase & Co (NYSE: JPM) with a Market Perform rating and $54 target.

• Lehman started Time Warner Cable Inc (NYSE: TWC) with a Neutral rating.

• Merriman initiated shares of Progressive Gaming International Corp (NASDAQ: PGIC) with a Buy rating, as the firm believes it is on the cusp of gaining meaningful market share of casino floors through its technologies and now is the time to get involved in shares.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).