Stock Downgrades: First Solar's Moment in the Sun Already Over?

By Justin Sharon  JAN 04, 2013 9:25 AM

Wall Street ratings agencies set the tone for today's stock market.

 


MINYANVILLE ORIGINAL Despite the best efforts of Challenger, Gray & Christmas, Wall Street’s annual Santa Claus rally ended right on cue yesterday after St. Nick ordered all his reindeers back to the North Pole. (Adding insult to injury, Rudolph Technologies (RTEC) slid an especially steep 3.16% after incurring a ratings reduction.) Defense and aerospace outfit Boeing (BA) bucked a down Dow (^DJI) day in advancing 0.52% to a fresh 52-week peak, providing proof positive that the sword is indeed mightier than the pen. At least it is when the latter is on automatic presidential pilotGoldman Sachs (GS), a.k.a., the “great vampire squid,” and JPMorgan (JPM), recovering from its “London whale,” both got broker boosts. There must be a movie in there somewhere, which may be why Nexflix (NFLX) ended an otherwise down day by gaining an impressive 4.98%. Indeed Jesse Eisenberg informed us in the film, “I was always afraid of the squid and whale fighting. I can only look at it with my hands in front of my face.” Sorry, Jess. As we are about to see, Goldman just downgraded Morgan.

Today in 10:00 a.m. Eastern economics, December data for factory orders and the Institute for Supply Management’s non-manufacturing index each are expected to slip slightly from the prior month’s pace. In earnings action, Finish Line (FINL) and Mosaic (MOS) both reported results earlier this morning.
 
Abbott Laboratories (ABT): Shares get downgraded to Hold from Buy at Deutsche Bank, whose target price is $33.
 
AmerisourceBergen (ABC): Mizuho moves the health care name to Neutral from Buy with a $45 price objective with shares now trading at a premium multiple to peers.
 
Bank of New York Mellon (BK): Citigroup slashes its financial firm Neutral from Buy.
 
BB&T Corp (BBT): The regional bank gets reduced to Neutral from Buy at Goldman Sachs.
 
Dole Food (DOLE): DOLE, down sharply this week, is cut by an unusual 180 degrees (Underperform from Buy) at Bank of America-Merrill Lynch.
 
eHealth (EHTH): The equity is now Underperform from Neutral at Bank of America-Merrill.
 
First Solar (NASDAQ:FSLR): Following its 7.57% surge on Thursday, Raymond James reduces its rating to Underperform from Market Perform. A stretched valuation and gross margin pressure are each cited as concerns.
 
Large Cap Financials: Key Dow (^DJI) component JPMorgan Chase (JPM) is downgraded to Buy from Conviction Buy at Goldman Sachs, which cuts Wells Fargo (WFC) to Neutral from Buy. Its respective price objectives are $52 and $40.
 
Ligand Pharmaceuticals (LGND): LGND is cut to Hold from Buy at Cantor Fitzgerald, which also trims its target to $23 from $28. In a troubling development, physician awareness of Promacta to treat HCV (Hepatitis C virus) is negligible a month after its approval with reimbursement seen as severely lacking.
 
Lululemon Athletica (LULU): Credit Suisse lowers the maker of yoga apparel to Neutral from Outperform and also reduces its price objective to $80 from $86. Slowing comparative sales momentum and long-term competitive risks are increasingly seen as headwinds. Shares are tumbling ahead of today’s opening bell as a result.
 
Merck KGaA (PINK:MKGAY): The German health care giant is now Neutral from Buy at Nomura.
 
Microsoft (MSFT): Citing weak Surface sales and a slow Windows 8 adoption, Argus moves the Dow member to Hold from Buy.
 
Ruth’s Hospitality Group (RUTH): Shares get downgraded to Hold from Buy at Deutsche Bank, whose $8 objective is intact.
 
Tanger Factory Outlet Centers (SKT): Seeing limited earnings upside in light of its floating rate exposure, Goldman slashes the stock to Sell from Neutral with an objective of $30.
 
Waters Corp. (WAT): Morgan Stanley moves the analytical instrument maker to Equal-Weight from Overweight.

(See also: New Stock Coverage: Sanchez Energy Set to Make Its Mark and Stock Upgrades: No More Tears for Johnson & Johnson.)
No positions in stocks mentioned.

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