- Merril upgrades developers Developers Diversified Realty (DDR) to buy from neutral
Merrill Lynch analyst Steve Sakwa says, unlike other over-leveraged real estate investment trusts, Developers Diversified Realty (DDR) is taking a number of steps to reduce its leverage, including a 45% cut in its 2009 dividend; acceleration of asset sales and joint-ventures; curtailment of new development activity.
Sakwa ways these steps should help repay maturing debt in late 2008 and 2009 and fund any remaining development.
Despite the upgrade, he cuts estimates and price target due to some changes to his model. He lowers $3.90 2008 estimate to $3.24, and $4.10 for 2009 to $2.93; $18 target is cut to $14.
Fortress (FIG) was upgraded at Citigroup to Hold from Sell.
Prudential (PUK) was lifted to Overweight from Neutral at JP Morgan.
Keefe Bruyette upgraded Franklin Resources (NYSE: BEN) to Outperform from Market Perform and added shares to their Best Ideas List on valuation as they see an attractive risk/reward at current levels.
UBS upgraded ASML Holding (ASML) to Buy from Neutral on valuation as they believe the company remains a market leader.
Oppenheimer raised Seattle Genetics (SGEN) to Outperform from Perform on valuation following the recent weakness as they expect positive clinical news flow beginning in December.
Deutsche Bank upgraded PepsiCo Inc. (PEP) to buy from hold, saying recent weakness in the share price has overshot the earnings risk from the economic slowdown and currency fluctuations. Deutsche Bank added that the company could also benefit from lower input costs, which were a major headwind in 2008, and a better relationship with bottlers than rival Coca Cola . "Pepsi and its bottlers appear to be playing much nicer together than Coke and Coca-Cola Enterprises at present," Deutsche Bank said.
Goldman Sachs upgraded bottlers Coca Cola Enterprises(COKE) and Pepsi Bottling (PBG) to neutral from sell, citing easing comparisons, a more benign commodity outlook and improved take-home profitability.
Chip maker SanDisk Corp. (SNDK) was upgraded to neutral from underperform at Cowen & Co., which said fundamentals remain challenging, but the weak environment is fully reflected in the stock price. "SanDisk is approaching levels where, absent a significant worsening of already horrific fundamentals or a failure of restructuring actions, many investors could reasonably see valuation support," Cowen & Co. said. The broker added it wouldn't be a buyer of the stock until fundamentals in the memory chip market improve and there is evidence that SanDisk's operating initiatives are effective, which will likely be mid-2009 at the earliest.
Downgrade :
- Cowen downgrades Savient Pharmaceuticals (SVNT)
Cowen analyst Rachel McMinn says she is downgrading Savient Pharmaceuticals (SVNT) to underperform from outperform on her lack of conviction that Puricase will receive first-pass FDA approval, and her view that the market opportunity for Puricase is significantly smaller than current Street expectations.
McMinn believes high rates of cardiovascular adverse events, discontinuations due to infusion reactions, and anaphylaxis like reactions complicate the risk-reward profile of the drug, although admittedly the refractory patient population it aims to treat is extremely ill.
RBC cuts target for Thoratec (THOR)
RBC analyst Ryan Bachman says Thoratec (THOR) initiated a "corrective action" for HeartMate II LVAS - overtime, wear and fatigue could interrupt pump function and result in injury or death.
After talking to management, Bachman believes the near-term financial impact is not so bad and the company recognizes revenue from replacement sales. He says the real commercial opportunity for HeartMate II lies in Destination Therapy (DT). The big question is what impact, if any, this will have on referring doctors who are gatekeepers of DT patient population; this uncertainty could weigh on share multiple.
He cut his price target to $18.
UBS downgraded U.S. Steel (NYSE: X) to Sell from Buy and lowered its target to $30 from $60 citing deteriorating U.S. conditions and concerns about the company's high fixed costs in a falling steel price environment.
China Unicom (NYSE: CHU) was lowered to Underweight from Neutral at JP Morgan.
Merriman downgraded Rick's Cabaret (NASDAQ: RICK) to Neutral from Buy to reflect the tough economic environment, potential weakness in Las Vegas and potential delays in acquisitions.
B. Riley cut Cache (CACH) to Neutral from Buy and lowered its target to $3.40 from $11 on concerns that comp declines have accelerated in October and will not get better for the holiday season.
Old Second Bancorp (OSBC) was cut to Underperform from Market Perform at Keefe Bruyette.
Standard & Poor's said Friday that it may downgrade the ratings of PNC Financial Services Group Inc. (PNC) on the bank's $5.5 billion offer for National City Corp. (NCC) . S&P has an A+ rating on PNC. At the same time, S&P said it may upgrade the A- ratings of National City. "The CreditWatch negative action on PNC reflects the size of this transaction, which comes amidst the current credit crisis -- an external operating environment that presents significant challenges for banks' financial performances," said John Bartko, an S&P credit analyst, in a statement. "The transaction materially increases PNC's exposure to residential mortgage-related loans in some of the weaker banking markets in the Midwest and Florida."
Credit Suisse downgraded Royal Dutch Shell to underperform from neutral and recommended a switch into rival BP or BG Group . Credit Suisse cited risks to Shell's third-quarter earnings, due Thursday, as well as recent outperformance to peers. "Shell has historically attained lower E&P earnings per barrel than its peers and this becomes more of an issue at a lower oil price," the broker noted.
UBS downgraded Nortel Networks(NT) to neutral from buy and upgraded Riverbed Technology to neutral from sell as part of a broader note on the communications equipment industry in which it notes dramatic slowing in Europe and emerging markets. On Nortel, UBS sees tougher end-market fundamentals and is increasingly worried about liquidity, and on Riverbed, it said it's more appropriate to value the stock on 2010 earnings per share once growth resumes.
Goldman downgraded Boston Beer (SAM) to sell from neutral on a weaker volume outlook and a full valuation.
Initiation :
- B. Riley initiated EnerSys (ENS) with a Buy rating and $16.50 target. The firm believes the company's core business is gaining strength due to product innovation and continued expansion into new commercial and renewable energy applications.
Oppenheimer believes Syniverse (SVR) is well positioned with rising mobile services penetration given its leverage to roaming and data. Shares were assumed with an Outperform rating and $19 target.
MAG Silver (MVG) and Northern Dynasty (NAK) were initiated with Speculative Buy ratings at Canaccord.
Related Posts :
Sources :
- Fox Business
- Marketwatch
- Blogging Stocks: Analyst calls: PEP, FIG, PUK, BEN, ASML, X, RDS.A, CHU, SVR ..., October 27, 2008 10:13 AM
- Business Week - Standard & Poor's Equity Research: Analyst Actions: Savient Pharmaceuticals, Thoratec, Developers Diversified Realty, October 27, 2008, 12:14PM EST
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