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Upgrades & Downgrades: ITT the New 'It' Stock?


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

Today may be all about 11/11/11 but 7/7/7 isn't prepared to cede center stage without a fight. The same number that so spooked stocks on Wednesday showed us its more benign side yesterday. Dow industrials posted triple-digit gains, blue chips boosted by both initial jobless claims dropping to a seven-month low and Merck (MRK) increasing its dividend for the first time in seven years. Also assisting equities was Italy's encouraging ability to tap the credit markets, a successful auction of 12-month bills buying time for the eurozone's third-largest economy. Shares snapped back from a mid-morning swoon that resulted from Standard & Poor's, in a pleasant change from perusing porn, mistakenly saying it cut the AAA credit rating of France, the eurozone's second largest economy. (As for the eurozone's largest economy, I honestly can't remember, but two out of three is generally good enough for government work.) Among standout stocks MTV owner Viacom (VIA) advanced 8.21% to top the S&P 500 Index, its export of Jersey Shore to Italy - country that clearly can't catch a break at the moment - boosting earnings on a day overall U.S. exports reached record highs.

Elsewhere Reading, Pennsylvania-based EnerSys (ENS) surged 18.86%; someone send stock options to citizens of that city, officially America's poorest. And amid all the up arrows Apple Inc (AAPL) tumbled 2.55%, breaching its 50-day moving average as supply chain concerns only added to the angst at a firm whose recently deceased founder has seen his halo slip at startling speed. In only a month Steve Jobs has in some quarters gone from saint to daughter-disavowing, philanthropy-foregoing, idea-imitating opportunist. (Seriously? People who live in glass houses shouldn't throw stones at the dead, especially when the latter have just demonstrated an uncanny ability to improve upon glass houses from the Great Beyond.) This morning in economics, analysts expect an increase in the University of Michigan's preliminary November consumer sentiment survey at 9:55 a.m. Eastern. The Treasury market is closed for Veterans Day but another frantic earnings week comes to a close with Allianz, Atlantic Power (AT), Box Ships (TEU), D.R. Horton (DHI), Petrobras (PBR), and Telefónica (TEF) all due to report results.


Internet stocks: (AMZN) and eBay (EBAY) are each initiated with a Neutral at Nomura.

ITT Industries (ITT): The stock is reinstated with a Buy rating and $24 price target at KeyBanc Capital, which says the post spin-off outfit offers investors an attractive mix of later cycle end-market exposure including as oil/gas, mining, chemical, power generation and commercial aerospace.

Seattle Genetics (SGEN): Needham starts SGEN with a Buy and sets a $20 target price. Adcetris, launched in late August and having already generated $10 million in third quarter sales, is marketed under accelerated FDA approval for a limited subset of the Hodgkin's lymphoma patient populations.

First Solar (FSLR): Barclays has a fresh Equal Weight on the alternative energy stock.

Regions Financial (RF): BMO Capital rolls out Outperform rated coverage of RF.

Plains Exploration (PXP): Keybanc Capital picks up PXP at a Buy.

Turkcell (TKC): TKC is started with a Sell at ING Group.

Equinix (EQIX): JP Morgan initiates the stock at an Overweight.

Micromet (MITI): MITI is assigned a post-earnings Buy at Needham, whose target is $10.


AMC Networks (AMCX): AMCX is upgraded to Hold from Sell at Stifel Nicolaus. The brokerage sees strong Q4 ad growth, with shows such as Walking Dead tracking well.

Allegiant Travel (ALGT): Ticonderoga takes ALGT to Buy from Hold and establishes a price objective of $60. Catalysts include an improved operating expense outlook and yesterday's annual investor day that suggested a substantially better than expected reduction in non-fuel unit costs.

Genworth Financial (GNW): Shares get a Neutral-from-Sell increase at Citigroup.

Lattice Semiconductor (LSCC): Jefferies lifts LSCC to Buy from Hold.

Northeast Utilities (NU): NU is moved to Outperform from Market Perform with Wells Fargo.


PepsiCo (PEP): Shares are cut to Neutral from Buy at Janney Montgomery Scott.

Abercrombie & Fitch (ANF): The clothing company is now Neutral from Buy at Nomura.

Viacom (VIA-B): The media giant gets moved to Neutral from Buy at Janney Montgomery Scott after yesterday's good gains. For related content, see Media Companies' Fundamentals Intact, but Wall Street Remains Skeptical.

MetLife (MET): The insurance outfit is also now Neutral from Buy at Janney Montgomery.

Air France-KLM: Shares, which trade here in the States under ticker symbol AFLYY, are downgraded to Neutral from Overweight at HSBC Securities.

ConAgra (CAG): CAG is cut to Neutral from Buy at UBS.

Coca-Cola Hellenic Bottling Company (CCH): CCH gets cut to Hold from Buy at the Royal Bank of Scotland.

Susser Holdings (SUSS): The stock is downgraded to In-line with a $26 target at Imperial Capital. While fundamentals remain strong, given that the stock is up some 71% in 2011 they see less near-term upside.

Quanta Services (PWR): PWR is cut to Neutral from Outperform by brokers Robert W. Baird.

Pioneer Natural Resources (PXD): The stock gets downgraded to Hold from Buy at Deutsche Bank

Alternative energy stocks: RBC Capital cuts Yingli Green Energy (YGE), First Solar, and Trina Solar (TSL), all to Sector Perform from Outperform. See also Solar Power Is Still in the Dark.

Silver Standard (SSRI): Shares are lowered to Sector Perform from Outperform at CIBC World Markets.

Zimmer Holdings (ZMH): The medical device maker is moved to Hold from Buy at Argus after earnings.

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No positions in stocks mentioned.
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