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VIDEOUpgrades and Downgrades: Education Stocks Taught Tough Lesson
By
Justin Sharon
Sep 09, 2010 8:40 am
Wall Street ratings agencies set the tone for today's stock market.
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Snooki however plumbed the depths in Seaside Heights, fined $533 in a double-whammy day during which her employer Viacom (VIA) also got downgraded. (Jersey Shore‘s Santiago born star may soon get some celebrity competition from countrymen who are slightly more deserving of our attention.) On the political front we learned Hu’s on first when the US bowed down to China while Treasury’s Tim Geithner, a big fan of tax breaks, pushed for their extension to both small businesses and middle class Americans. And as Switzerland’s Roger Federer strode into the US tennis open semifinals in straight sets amid a noticeable lack of competition, his country stands atop a just-released list of the world’s most competitive economies. Today’s earnings are expected to include Korn/Ferry International (KFY), National Semiconductor (NSM), and Piedmont Natural Gas (PNY).
Initiations
Biotech Stocks: Amgen (AMGN) is begun with a Buy and $68 price objective at Stifel Nicolaus, which cites a robust product adoption in the postmenopausal osteoporosis and SRE settings among other favorable factors. By contrast the broker begins Biogen Idec (BIIB) at a Sell due to upcoming threats in its multiple sclerosis market. Human Genome Sciences (HGSI) and Celgene (CELG) are both Buys while Gilead Sciences (GILD) gets a Hold. For related content, see Big Pharma Says Let's Make a Deal.
King Pharmaceuticals (KG): The stock is a new Buy at brokerage Duncan Williams, which assigns it an $11 price as they like the diversification of their base business and believe that near-term revenues from Meridian and Animal Health should drive stable growth.
Continental Resources (CLR): Ticonderoga launches Neutral rated coverage on Continental Resources as it sees their shares as expensive, currently trading at 76% of Net Asset Value compared to 71% of peers. Exact Sciences (EXAS): Small cap Exact Sciences is initiated with a Buy at Jefferies.
Whiting Petroleum (WLL): The firm also begins Whiting Petroleum with a Neutral. While it sees the company as a nice oil play, it also feels current valuation is too rich.
Triangle Capital (TCAP): Brokerage Robert Baird begins Triangle Capital at a Neutral and sets a $17 price target. With a dividend yield of approximately 10.4% they are positively disposed to the shares but would prefer a more attractive entry point given a cautious macro outlook.
Pharma Stocks: Leerink Swann launches IDEXX Labs (IDXX) at Market Perform and has an Outperform on ViroPharma (VPHM).
Upgrades
Wimm-Bill-Dann (WBD): JP Morgan moves Wimm-Bill-Dann to Overweight from Neutral.
Harmony Gold (HMY): JP Morgan also hoists Harmony Gold to Overweight from Neutral.
Temple-Inland (TIN): TIN gets a Buy-from-Neutral boost by Goldman Sachs.
Celanese (CE): Citigroup takes Celanese to Buy from Hold.
Stereotaxis (STXS): The stock is upgraded to Buy from Hold with a $5.50 target price at Needham.
Infinera (INFN): INFN is increased to Buy from Hold with a $12.50 target at Soleil Securities.
Downgrades
Educations Stocks: Apollo Group (APOL), ITT Educational (ESI), and Education Management (EDMC) are all now Neutral from Overweight at Piper Jaffray. Also read Enroll Now in Education Stocks.
Zymogenetics (ZGEN): With their shares no longer trading on fundamentals following the company’s proposed purchase by Bristol-Myers (BMY), UBS lowers Zymogenetics to Neutral from Buy.
Melco Crown Entertainment (MPEL): JP Morgan moves Melco Crown Entertainment to Neutral from Overweight.
Anglogold (AU): AU gets cut to Neutral from Overweight, also at JP Morgan. For related content, see Miners on Verge of Breakout: Mergers and Acquisitions Heating Up Sector.
Boise (BZ): The stock is now Neutral from Buy at Goldman.
Valspar (VAL): Citigroup cuts Valspar to Hold from Buy.
Tellabs (TLAB): TLAB is taken to Hold from Buy at Soleil.
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No positions in stocks mentioned.
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