Wall to Wall Street Coverage: Upgrades and Downgrades
Ain't it odd how real life is always messier than the ads make it seem? Take Benetton. Italy's largest clothing company, famous for its can't-we-all-just-get-along commercials, yesterday announced net income nosedived 33%, buffeted by a backdrop among its European neighbors it called "very critical." This even as Unicredit, the country's most internationally exposed lender, announced a $14.6 billion loss. Thus did Roman ruins and renewed contagion fears combine to snap a two-session winning streak for stocks. An ebullient mood which made for the best Veterans Day for the Dow since 1932 quickly got old, with all 10 S&P sectors ending in the red even if Nasdaq volume was the lowest of the entire year. Italian anxiety was amped up after an increase in borrowing costs at a five-year bond auction. A nation whose total liabilities are expected to touch €2 trillion by year-end now turns to Super Mario as it aims to mount a Full Monti attempt at improving its finances. (As the old saw says, "If the debt mountain won't come to Mohamed, Mr. El-Erian must go to the mountain" for more media attention.)
Speaking of, Green Mountain Coffee Roasters (GMCR) fell 3.59% on an analyst downgrade; perhaps President Obama was right in declaring "There are no magic beans that you can toss in the ground and suddenly a bunch of money grows on trees" while speaking at the Asia-Pacific Economic Cooperation forum in Honolulu. Certainly, he would have been happy to see Hawaiian Holdings (HA) surge 6.62% on an otherwise down day — unlike the rest of us, investors in that stock were in no danger of losing their shirts, tropical or otherwise. Elsewhere Imperial Sugar (IPSU), its core ingredient infinitely more addictive than cocaine, fell 4.28% to near a new low. A welcome development on World Diabetes Day. And CBS Corp (CBS) slipped 0.65% on researcher's ratings reduction even as its 60 Minutes exposé sent Taser International (TASR) shares up 3.24% to a fresh 52-week peak. Alas a little late for the Connecticut resident killed by a stun gun on Sunday. This morning in economics, September business inventories are expected to show a slight increase at 10:00 a.m. Eastern. On the earnings front Autodesk (ADSK), Beazer Homes (BZH), Covidien (COV), Dell Inc (DELL), easyJet PLC, Home Depot (HD), Jacobs Engineering (JEC), Saks Inc (SKS), TJX Cos (TJX) and Wal-Mart (WMT) are all due to release results.
Initiations:
MicroStrategy (MSTR): MSTR is initiated at an Outperform by JMP Securities.
Sourcefire (FIRE): Bank of America-Merrill Lynch launches Buy rated coverage on FIRE and assigns a price objective of $36.
Kirby Corp (KEX): KEX is covered with Buy rating and assigned a $76 price objective at Dahlman Rose. The broker highlights strong growth in demand for fracturing equipment.
Bryn Mawr Bank (BMTC): The stock is begun with a Buy at Sterne Agee.
Upgrades:
Agilent (A): The tech firm gets a Buy-from-Neutral boost at Bank of America-Merrill Lynch.
Covance (CVD): Goldman Sachs gives a Buy-from-Neutral upgrade to CVD.
Porsche (POAHY.PK): The luxury car company is lifted to Outperform from Neutral at Exane BNP Paribas.
Western Refining (WNR): Goldman adds WNR to its list of Conviction Buys. See also Why Increased Demand Will Save Natural Gas.
Northeast Utilities (NU): NU is now Buy from Neutral at Bank of America-Merrill Lynch.
Downgrades:
AMR Corp (AMR): The American Airlines parent gets downgraded to Neutral from Buy at Sterne Agee.
Amgen (AMGN): The world's biggest biotech is now Neutral from Overweight at Piper Jaffray, sending shares lower before the bell. Also read 13 Drug Companies Trying to Beat the Odds in Pancreatic Cancer.
Advance Auto Parts (AAP): Shares are lower in pre-market trading after being cut to Hold from Buy at Argus, which says earnings growth is slowing due to gross margin trends and expenses related to new store growth.
Kellogg (K): The cereal stock is also down ahead of the open on a Market Perform-from-Outperform ratings reduction by Sanford Bernstein.
Marathon Oil (MRO): MRO is moved to Neutral from Buy at Goldman.
LDK Solar (LDKS): Shares are cut to Sell from Hold at Kaufman Brothers, which slashes its target to $2 from $5 after the alternative energy outfit issued lowered guidance. Concerns include challenges associated with entering the module market and problems concerning competing head-to-head in the wafer market.
Seagate Technology (STX): Deutsche Bank downgrades STX to Hold from Buy.
Western Digital (WDC): Seagate rival WDC is also downgraded this morning, similarly moved to Hold from Buy at Needham.
Imperial Tobacco (ITYBY.PK): Shares are taken to Sell from Neutral at Goldman Sachs.
Allianz SE: Stock in the German insurance outfit, which trade in America under ticker symbol AZSEY, are cut to Add from Buy at WestLB.
Utilities: Bank of America-Merrill Lynch lowers CenterPoint Energy (CNP) and NV Energy (NVE), both now Neutral from Buy.
Brady Corp (BRC): BRC is now Neutral from Outperform at Robert W. Baird, which trims its target price by $2 to $31. Weaker projected organic growth reflects the sharp declines in U.K. and eurozone October manufacturing, and the significant impact of Thai flooding on firm's electronics customers.
Knight Transportation (KNT): Sterne Agee takes the stock to Underperform from Neutral with a $16 target.
