Upgrades & Downgrades: Bunge Set to Jump
Wall Street ratings agencies set the tone for today's stock market.
They said PIIGS would fly when Europe got its fiscal house in order and hey, you wait long enough, it happens. Stocks surged, blue chips bouncing back from last week’s drubbing to post their best performance in over a month on signs the continent is at long last taking coordinated action to tackle its economic crisis. This despite monthly new home sales here in the US falling to their lowest level since 1963. Which was when the suddenly ubiquitous Pan Am building went up; its successor Met Life (MET) skyrocketed 6.52% in a strong financial sector. Eastman Kodak (EK) also introduced its iconic Instamatic that year, but the stock’s 26.89% tumble suggests we won’t soon see a return to their salad days. Speaking of, Le Gaga Holdings (GAGA), Chinese purveyor of cabbage, carrots, and cucumbers, slid 7.71% on an otherwise stellar day but Martha Stewart (MSO) -- who preferred to “focus on [my] salad” rather than answer awkward insider trading questions -- saw her stock gain 3.63% after rejoining the board.
The dead get rent subsidies in New York but one dying industry is looking to live for the first time. (Or not; Elvis is after all the top selling stamp ever.) Meanwhile Stamps.com (STMP) some of whose offerings have been in decidedly questionable taste, fell 5.39%. And an analyst upgrade of Otis maker United Technologies (UTX) helped lift the Dow member 3.82%. If only the elevator it installed in the Washington Monument was in similarly strong shape. Today in economics, analysts expect an increase in September consumer confidence at 10:00AM Eastern. On the earnings front Accenture (ACN), American Greetings (AM), Jabil Circuit (JBL), Omnova Solutions (OMN), Park Electrochemical (PKE), Paychex (PAYX), Progress Software (PRGS), Sealy Corp (ZZ), Standard Microsystems (SMSC), and Walgreen (WAG) are all due to report results.
Alcohol Stocks: Boston Beer Co (SAM) is begun with a Hold rating and $79 price objective at Auriga. While sales remain relatively robust, concerns include tough comps and rising commodity costs. It begins a more bullish Buy on Constellation Brands (STZ), whose target price is $25. Catalysts include a strong portfolio of several top wine and spirit brands.
Callon Petroleum (CPE): The small cap stock is a new Neutral ($5 target) at brokers Robert W. Baird.
Alexion Pharmaceuticals (ALXN): ALXN is a new Outperform at Oppenheimer, which has a $74 price target amid optimism over its Soliris phase II results in severe/refractory generalized myasthenia gravis.
Tech Stocks: Aruba Networks (ARUN) and F5 Networks (FFIV) are each Holds at Jefferies.
Vera Bradley Inc (VRA): The handbag manufacturer is begun with a Buy and $50 target at Jefferies.
Education Stocks: FBR Capital covers the under-performing sector, assigning Outpeforms on American Public Education (APEI) and Grand Canyon Education (LOPE). Its respective price objectives are $45 and $19.
Gartner (IT): IT is initiated with a Neutral at Goldman Sachs.
Booz Allen Hamilton (BAH): The consulting firm is a new Negative at Susquehanna.
Food Stocks: Lazard launches Buy rated coverage on Panera Bread (PNRA) ($137 target) and has new Neutrals on Einstein Noah (BAGL) and Chipotle Mexican Grill (CMG).
Daimler AG: The German car giant is now Outperform from Neutral at Credit Suisse, noting that it has “significant room for self-help” by cutting labor costs.
Tesco ADR: The British grocer is upgraded to Neutral from Underweight at HSBC Securities.
Kimco Realty (KIM): KIM us now Neutral from Underperform at Robert W. Baird, which has a target of $18.
Affymax (AFFY): The stock is boosted to Strong Buy from Buy at WBB Securities, which notes that the FDA is expected to rule on peginesatide by March 27, 2012.
BNP Paribas (BNPQY): The bank is upgraded to Buy at WestLB.
Medical Device Stocks: Baxter (BAX) is boosted to Overweight from Neutral at JP Morgan, which moves Boston Scientific (BSX) to Neutral from Underweight and Stryker (SYK) to Overweight from Neutral.
Bunge (BG): BG is upgraded to Buy from Hold at Citigroup.
Potash (POT): POT is upgraded to Overweight from Neutral at Atlantic Equities. See also Two Canadian Stocks Ready for Explosive Growth.
Sanderson Farms (SAFM): SAFM is added to the Conviction Buy List at Goldman, which says “the industry has consistently cut sufficient supply, margins have consistently moved towards peak, and we see no reason this time will be different.”
Equity One (EQY): The stock gets upgraded to Hold from Sell at Citigroup
Clorox (CLX): The cleaning company is increased to Average from Below Average at Caris & Company after Carl Icahn withdrew his offer.
Medical Device Stocks: Abbott Labs (ABT) and Zimmer (ZMH) are both now Neutral from Overweight at JP Morgan. For related content, see Orexigen Surges on New Hope for Diet Pill.
Fertilizer Sector: Atlantic Equities cuts CF Industries (CF) to Underweight and Agrium (AGU) to Neutral.
European Airlines: Deutsche Lufthansa AG and Ryanair Holdings PLC (RYAAY) are each reduced to Neutral from Buy at Goldman Sachs as “The demand picture remains tough.
Koninklijke Ahold: The Dutch supermarket stock is downgraded to Underweight from Neutral at HSBC Securities.
SK Telecom (SKM): SKM is now Neutral from Overweight at HSBC Securities.
WMS Industries (WMS): Shares are cut to Neutral from Buy at Sterne Agee, which takes its target down to $22 from $33.
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