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Stock Downgrades: Aflac Not All It's Quacked Up to Be


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

MINYANVILLE ORIGINAL The "Santa Claus" rally officially ends today, and St. Nick can hang up his sleigh for another year having done an excellent job, if yesterday's stock surge is any indication. Good gainers included funeral home operator Carriage Services (CSV), which jumped 13.31% to a fresh 52-week peak. Unfortunately Premier Exhibitions (PRXI) - whose own experience with dead bodies has previously caused considerable consternation - missed out on the fun and fell 6.84%. With New Year's dieting on everyone's mind, Weight Watchers (WTW) brought proceedings to a close, but the broccoli forests at Dole Food (DOLE) contained no money tree as that stock tumbled 13.43% to post the NYSE's poorest performance. And Smart Balance surged 7.13% to a fresh peak after announcing it will change its name to Boulder Brands (BDBD) and move to Colorado. Buyer beware, however, for Rocky Mountain Highs evidently don't last long.

Today's quarterly earnings announcements are due to include A. Schulman (SHLM), Family Dollar (FDO), Piedmont Natural Gas (PNY), Sonic Corp. (SONC), and Worthington Industries (WOR).

AFLAC Inc. (NYSE:AFL): The insurance outfit, famous for its ubiquitous advertising duck, gets downgraded to Neutral from Overweight at JPMorgan amid an excessive current valuation. The price target is taken to $54 from $55.

American Tower (AMT): The name is now Neutral from Outperform at Macquarie.

A.O. Smith Corp. (AOS): Janney Capital cuts the electrical equipment outfit to Neutral from Buy amid valuation issues. Its price objective is $65.

BCD Semiconductor (BCDS): The name is now Neutral from Buy with an $8 price objective at Robert W. Baird, as its shares no longer trade on fundamentals following Diodes' (DIOD) recent acquisition announcement.

Biogen Idec (BIIB): Troubled by both a relatively rich valuation and high expectations for the upcoming launch of BG-12, Piper Jaffray cuts the biotech to Neutral from Overweight. Its target price comes down to $166 from $175.

Clear Channel Outdoor Holdings (CCO): Citing channel checks that suggest higher than expected occupancy declines, Wedbush cuts CCO to Underperform from Neutral with a $6 target.

Delphi Automotive (DLPH): DLPH gets downgraded to Neutral from Buy at Guggenheim.

JC Penney (JCP): Shares are pulled from the Short-Term Buy List at Deutsche Bank.

Kronos Worldwide (KRO): Oppenheimer cuts KRO to Perform from Outperform.

Managed Care Companies: Deutsche Bank gives Hold-from-Buy downgrades to UnitedHealth (UNH), newly added to the Dow (^DJI), and WellPoint (WLP), with its respective price objectives lowered to $61 and $68. Concerns include increased underwriting risks and an overall lack of catalysts for the managed care space.

Morgan Stanley (MS): The financial firm, upgraded elsewhere today, is taken to Reduce from Neutral at Suntrust Robinson Humphrey.

Ryland Group (RYL): The home builder gets taken to Hold from Buy at Topeka.

SBA Communications (SBAC): Macquarie moves the stock to Neutral from Outperform.

Tech Stocks: Altera (ALTR), Cypress Semiconductor (CY), Lam Research (LRCX), LSI Logic (LSI), and Volterra Semiconductor (VLTR) are all lowered to Equal-Weight from Overweight by Barclays, which moves Advanced Micro Devices (AMD) to Underweight from Equal-Weight.

(See also: New Stock Coverage: Sun Rises on Western Gas and Stock Upgrades: JPMorgan Having a Whale of a Time.)
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