|Upgrades & Downgrades: Mixed Views on PMC-Sierra|
By Justin Sharon OCT 01, 2009 8:35 AM
Maybe the experts know something we don't know.
Stocks slipped after disappointing data blew in from the Windy City via a weaker than expected Chicago PMI report. See also Chicago PMI Freezes the Bulls. Maybe markets simply needed to CIT (CIT) (-45%) down amid signs a seven month rally is entering the September of its years. More likely investors were unnerved by The Boss gracing an AARP Magazine cover on the day ADP announced monthly private sector payrolls plunged 254,000. Still, the Dow did post its biggest third quarter gain since the outbreak of World War II and October, notwithstanding ‘29 and ‘87, is invariably less ominous for equities than popularly perceived.
Life on Mars is again being discussed but the death-knell has started for Saturn after Penske Automotive (PAG) pulled the plug on investment. After the close Bank of America (BAC) announced a departure beyond everybody’s Ken while today sees Accenture (ACN) and Constellation Brands (STZ) report results. Brace also for a battery of economic data including weekly jobless claims, August personal income and spending and ISM’s September Manufacturing Index.
Auto Parts Companies: Barclays puts O’Reilly Automotive (ORLY) in the driver’s seat with an Overweight, while AutoZone (AZO) and Advance Auto Parts (AAP) will hope slow and steady wins the race after the broker initiated each with Equal-Weight.
Casinos: Soleil initiates casino companies Las Vegas Sands (LVS) (Buy; $20 target), MGM Mirage (MGM) (Hold; $13) and Wynn Resorts (Hold; $80). For more on these names, see Casino Stocks Are a Bad Bet.
AFLAC (AFL): The AFLAC duck may have wished for more to crow about after Sandler O’Neill starts with a Hold ($46 target).
Alcoa (AA): The aluminum company, which kicks off earnings season next week, is boosted by Deutsche Bank (Buy from Hold). The broker cites an improving near-term outlook in aluminum allied to ebbing financial risk.
PMC-Sierra (PMCS): J.P. Morgan upgrades PMC-Sierra to Overweight from Neutral and takes its target up $2 to $11.50.
Big Lots (BIG): Closeout retailer Big Lots looks for a big bounce after an upgrade to Overweight at JP Morgan, which notes most of its products are aimed at non-consumable categories.
Microsoft (MSFT): It’s hardly bye-bye for Microsoft but it is cut to Buy from Conviction Buy by Goldman Sachs. See today's article Why Microsoft's Downgrade Doesn't Matter.
Saks (SKS): Another Saks (Inc.) could be more five and dime than Fifth Avenue today after a downgrade (Neutral from Overweight) at JP Morgan.
PMC-Sierra: In contrast to Morgan, Goldman sees PMC-Sierra heading downhill and lowers the stock to Neutral from Buy.
Agilent (A): The stock gets downgraded to Market Weight from Overweight over at Thomas Weisel.
BMC Software (BMC): JP Morgan reduces its BMC Software rating to Underweight from Neutral and establishes a objective of $30.