UPGRADE :
Jefferies upgraded Legg Mason (LM) to Buy from Hold on valuation following the recent sell-off, as they find the risk/reward attractive at current levels. However, the firm lowered their target to $23 from $44.
Merriman raised First Solar (FSLR) to Buy from Neutral after the company showed "industry leading growth" in Q3. The firm has a 12-month price target range of $185 to $195 per share.
Ladenburg upgraded KeyCorp (KEY) to Buy from Neutral.
Citigroup upgraded shares of Silicon Laboratories (SLAB) to Buy from Hold on valuation and expects the company to post above average industry growth in 2009.
Janus Capital (JNS) was upgraded to Neutral from Underweight at JP Morgan.
Associated Estates Realty (AEC) was upgraded to Outperform from Neutral at Baird.
S&P maintains buy recommendation on shares of Energizer Holdings (ENR)
ENR posts September-quarter operating EPS of $1.68, vs. $1.03, far above our $1.04 estimate and the $1.18 consensus. The upside was primarily from lower advertising and promotional expenses, early holiday shipments to some key customers, and hurricane-related sales. Underlying battery demand was soft. At current spot forex prices, the company forecasts a negative sales impact of about $135 million in fiscal year 2009 (September), or about a 3% decline, and expects that "holding earnings flat will be a challenge." We are reducing our fiscal year 2009 EPS estimate by $0.68 to $6.20 and our p-e-based target price by $14 to $66. -L. Braverman, CFA
S&P maintains strong buy opinion on shares of Colgate-Palmolive (CL)
CL posts third quarter operating EPS of $0.99, vs. $0.86, $0.03 above our estimate. Upside came from sales, which rose 13%, including a 3.5% benefit from forex, beating our 10% growth estimate. The best-performing segments were Latin America, Greater Asia/Africa and Pet Nutrition. Commodity costs pressured the gross margin more than we had projected, but were offset by more leveraging of operating expenses. We think commodity-cost pressures can start to moderate in the fourth quarter. We will update following this morning's conference call, during which we will be listening for forex guidance. -L. Braverman, CFA
Credit Suisse reiterates outperform on Apollo Group (APOL)
Credit Suisse analyst Kelly Flynn says Apollo Group's (APOL) $0.75 pro-forma EPS beat her $0.64 view. She says 15.4% enrollment growth beat her 10.6%, accelerating from third quarter's 11%; 19.1% starts growth beat her 8.5%; non-associates starts grew 8.1% against a tough comp.
Flynn also notes that the company's retention was up 240 basis points, operating margin expanded 273 basis points, and free cash flow growth outpaced EPS growth by more than 300 basis points.
She raises $3.28 fiscal year 2009 (August) EPS estimate to $3.48. She remains optimistic that her new estimate could prove conservative if current trends continue. She sets fiscal year 2010 estimate at $4.03. She also increases her price target to $75 from $70.
HOLD/NEUTRAL :
S&P maintains hold opinion on shares of Visa (V)
Before $1.1 billion litigation reserve build, Visa posts September-quarter operating EPS of $0.58, vs. pro forma loss of $2.13, $0.02 above our $0.56 EPS estimate. Due to a slowdown in international spending, management expects fiscal year 2009 (September) revenue growth to come in at the lower end of its 11%-15% range. We believe Visa should benefit from its high percentage of debit cards, which are performing better than its credit cards in terms of spending growth. We are maintaining our fiscal year 2009 EPS estimate of $2.70, but lowering our target price by $3 to $54, an above-peer 20 times our fiscal year 2009 EPS estimate. -S. Plesser
S&P maintains hold opinion on Motorola shares (MOT)
Before a number of one-time charges, MOT posts third quarter EPS of $0.05, vs. $0.03, ahead of our $0.02 estimate. Revenues were weaker than we expected, with a decline handset volumes from the second quarter and a surprising decrease in network and enterprise mobility revenues, which had been a stabilizer for MOT. The company announced plans to delay the planned separation of its handset operations beyond original goal of 2009, due to tight credit markets and ongoing restructuring efforts. On the morning call, we look for more details about inventory levels in light of the challenging macroeconomic market. -T. Rosenbluth
S&P maintains hold opinion on shares of Target COrp. (TGT)
Hedge fund Pershing Square Capital Management, which owns nearly 10% of TGT's outstanding shares, has proposed TGT spin off its real estate assets to increase the value of the company. TGT is still evaluating this proposal. TGT shares are down about 19% year to date. We attribute this decline to a weakening economy that is depressing valuations of even best-in-class retailers. We think TGT is well-positioned to weather near-term challenges we foresee, and to improve shareholder value once the economy begins to recover. -J. Asaeda
DOWNGRADE :
Hartford Financial Services Group Inc. (HIG) was cut to "neutral" from "buy"
Hartford Financial Services Group Inc. (HIG), the sixth-largest U.S. insurer, was cut to "neutral" from "buy" by Merrill Lynch & Co. Included are analysts’ calls for Cemex SAB, Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase Bank NA, Citigroup Inc., Dana Gas PJSC, NCI Building Systems Inc. and Grupo Modelo SAB de CV.
The Downgraded rating was citing greater than expected capital volatility and the potential for another $2B capital raise or more in order to maintain ratings.
Listen/Download this Podcast from Bloomberg (Duration: 02:29 , Format: *.MP3)
Baird downgraded Polypore International (PPO) to Neutral from Outperform and lowered its target to $16 from $28 due to the company's announcement that its battery separator pact with Johnson Controls (NYSE: JCI) will end in December.
Ashland (ASH) and Pan American Silver (PAAS) were cut to Neutral from Overweight at JP Morgan.
Achillion (ACHN) was downgraded at Oppenheimer to Perform from Outperform.
Needham downgrades VistaPrint (VPRT)
Needham analyst Mark May says he's downgrading VistaPrint (VPRT) to hold from buy, as its first quarter results confirmed his view going into the report that VPRT's business is likely paced in line, but that a strengthening U.S. dollar would negatively impact the company's fiscal year 2009 (June) revenue guidance.
May notes that what he didn't fully anticipate was the meaningful (likely economically-induced) slowdown in order growth that VPRT has supposedly witnessed since the start of the second quarter.
He cuts $1.52 fiscal year 2009 EPS estimate to $1.32 and $521.2 million revenue forecast to $480.1 million.
Goldman cuts Altera (ALTR) to sell from neutral to sell, while Xilinx (XLNX) to neutral
Goldman Sachs analyst James Schneider says he is becoming more cautious on programmable logic devices (PLD) stocks, as he now believes there likely to be significant pullback in communications infrastructure spending, especially for wireless infrastructure in emerging markets, over the next year.
He downgrades Altera (ALTR) to sell from neutral and Xilinx (XLNX) to neutral from buy. Despite outperformance relative to his coverage in past year and good cost control from both companies, Schneider believes growth is likely to be challenged in 2009.
He cuts Altera $1.20 2009 EPS estimate to $0.95 and $1.50 2010 to $1.00, and his $20 6-month price target to $16.
INITIATION :
- Vertex's (VRTX) shares were initiated with a Buy rating
Merriman believes the Vertex's (VRTX) lead compound, telaprevir, is the most advanced therapeutic for the treatment of hepatitis C in clinical development. The firm thinks shares are undervalued at current levels and initiated shares with a Buy rating.
Markel (MKL) shares initiated with a Market Perform
Markel (MKL) was initiated at Keefe Bruyette with a Market Perform and $360 target. The firm believes shares are fairly valued at current levels.
Cemex (CX) was assumed with an Underperform rating and $7 target at Credit Suisse.
Pharmasset (VRUS) shares were initiated with a Buy rating
Merriman believes Pharmasset (VRUS) has a strong pipeline with drugs targeting major indications in the infectious disease space. The firm, which started shares with a Buy rating, thinks shares could trade closer to a range of $22 to $26 in the next 12 months.
Related Posts :
Sources :
- Business Week: Analyst Actions: Altera, Xilinx, Apollo Group, VistaPrint, October 29, 2008, 12:11PM EST
- Business Week: S&P Picks and Pans: Visa, Motorola, Colgate-Palmolive, Target, Energizer, October 30, 2008, 10:17AM EST
- Blogging Stocks: Analyst calls: LM, FSLR, KEY, HIG, PPO, ASH, VRTX, MKL, CX ..., October 30, 2008, 11:31 AM EST
- Bloomberg: Bloomberg on the economy, October 30, 2008
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