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business newsUpgrades and Downgrades: Monday Morning Blues for Microsoft
By
Justin Sharon
Oct 25, 2010 8:30 am
Wall Street ratings agencies set the tone for today's stock market.
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Christine Lagarde, the country’s Finance Minster, couldn’t be accused of idleness either as she worked over the weekend along with other G20 counterparts trying to make nice over trade in South Korea, which incredibly enough had the same per capita income as Egypt in the early 1960′s before embarking on a long boom to demonstrate hard work is its own reward. Since this particular October has five Fridays, five Saturdays and five Sundays for the first time in 823 years, there is presumably still time for European productivity to catch up before the month is out. Spain meanwhile, home to the continent’s longest jobless lines, took an alternative approach to 62 year olds and awarded its first annual nine-day siesta crown to an unemployed ex-security worker of that age, although to be fair he originally hails from Ecuador. Today in economics, September existing home sales are anticipated to increase approximately four percent at 10:00AM Eastern. On the earnings front fully one-third of the S&P 500 reports results this week, with today’s announcements expected to include Amgen (AMGN), Lorillard (LO), Luxottica (LUX), RadioShack (RSH), Sony (SNE), and Texas Instruments (TXN).
Initiations
Government Properties Income Trust (GOV): GOV gets initiated with a Neutral at Janney Montgomery Scott.
Rock-Tenn (RKT): The stock gets resumed with a Buy rating at Goldman Sachs.
Xilinx (XLNX): The semiconductor stock is begun with a Buy and $32 price objective at Deutsche Bank.
Upgrades
JetBlue Airways (JBLU): JBLU gets moved to Overweight from Neutral with a $9 price objective at JP Morgan.
Citigroup (C): C gets added to the Conviction Buy List at Goldman.
Wireless Technology Stocks: Novatel Wireless (NVTL) and Sierra Wireless (SWIR) are both boosted to Outperform from Market Perform by BMO Capital. Also read Morgan Stanley Report on Broadband Pricing Wildly Overblown.
Principal Financial (PFG): PFG gets upgraded to Buy from Neutral at Goldman.
Endo Pharmaceuticals (ENDP): Brokerage firm Collins Stewart takes Endo Pharmaceuticals to Buy from Hold and lifts its target price to $43 from $38. While Wall Street is expecting a 90% plus decline in 2016 sales of Lidoderm once the drug loses patent protection in 2015, Collins contends that the sales decline will be 50% or less. For related content, see Why Investors Shouldn't Expect Big Things From Stocks of Arena, Vivus, and Orexigen.
StanCorp Financial (SFG): SFG is now Neutral from Sell at Goldman.
Alliance Data Systems (ADS): ADS is upgraded to Outperform from Sector Perform at RBC Capital, which sets it a $75 target.
Downgrades
Microsoft (MSFT): Key Dow component Microsoft is moved to Market Perform from Outperform at FBR Capital, which takes its target to $27 from $32. The brokerage believes that the enterprise PC refresh cycle is likely to proceed at a slower pace than previously anticipated. Also, over the past several months the tablet form factor (via the iPad) is gaining meaningful traction not just with consumers but it’s also starting to penetrate the enterprise market.
Southwest Airlines (LUV): No love lost for Southwest Airlines at JP Morgan, which moves it to Neutral from Overweight with a $15.50 target.
Athenahealth (ATHN): ATHN is downgraded to Hold from Buy with a price objective of $37 at Jefferies.
ANSYS (ANSS): Jefferies also reduces its ANSYS rating to Hold from Buy with a $47 target.
Brookdale Senior Living (BKD): BKD gets lowered to Neutral from Buy at Goldman.
Lincoln National (LNC): Goldman also gives a Neutral-from-Buy reduction to Lincoln National.
Protective Life (PL): Goldman is even less constructive on Protective Life, which gets lowered to Sell from Neutral.
Applied Signal (APSG): The stock is moved to Neutral from Buy at Merriman, which says that with shares up 20% last week, much of the upside of a potential sale process is already reflected in its stock.
Weatherford International (WFT): WFT is now Neutral from Outperform at Credit Suisse.
United Natural Foods (UNFI): UNFI is now Hold from Buy at Canaccord Genuity.
Beneficial Mutual Bancorp (BMCL): Sterne Agee downgrades Beneficial Mutual Bancorp to Neutral from Buy.
Mentor Graphics (MENT): MENT is cut to Neutral from Overweight with a $12 objective at JP Morgan.
J. Crew (JCG): The retail stock is downgraded to Neutral from Buy at MKM Partners as shares will remain constrained by tough comparisons and lost momentum in its underlying business.
Wipro (WIT): Indian outsourcer Wipro is now Neutral from Outperform at Credit Suisse.
Nu Skin (NUS): NUS is downgraded to Hold from Buy at Stifel Nicolaus due to valuation.
No positions in stocks mentioned.
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