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Upgrades & Downgrades: High Hopes for Lowe's


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

Last Thursday we devoured, this Thursday we digested. A week after Thanksgiving and 24 hours on from the Dow's best showing in almost three years, markets paused to take stock. The Blue Chip average fell for the first day in four, iffy initial unemployment data proving sufficient to stay on the sidelines, though declines were minor and volume below average. Standout stocks included National Bank of Greece (NBG), which slid 7.20% in a reminder that while you can temporarily take economic basket cases off the front page, don't expect them to stay on the back burner for long. Barnes & Noble (BKS), surprisingly seeing no boost from its recent book reading by Snooki in Paramus, slumped 16.34% on a Q2 sales miss, making it the Russell 2000's poorest performer. One only hopes the Jersey Shore star invested instead in Movado Group (MOV), also based in the Bergen County borough and currently enjoying the time of its life after moving up 13.35% on good earnings guidance.

Elsewhere it was a case of "Blame Canada!", what with Montreal-based underwear outfit Gildan Activewear (GIL) giving up 31.49% and Vancouver's own Lululemon Athletica (LULU), though thrice upgraded this morning, losing 5.09%, the worst intra-day showings since December 2008 for each. (With trendsetter extraordinaire Kim Kardashian currently extolling the virtues of naked yoga, it's no surprise both stocks endured such torment.) At least Guess (GES) is respectably clothed. The denim darling rose 5.30% after results. Having famously designed Marty McFly's jacket, such trading action is also to be expected. After all, with The Muppets in movie theaters, "students" storming western embassies in Iran, and Russians once again making mischief, we have gone Back to the Future with a vengeance. And in analyst action, Fiat SpA was downgraded by an unusual 180 degrees, to Underweight from Overweight, at Morgan Stanley. Yet its shares are up sharply in Europe as we speak. Seems strange but hey, where the Italian car company is concerned, things are frequently not what they appear. Earnings today are expected to include both Blyth Inc (BTH) and Big Lots (BIG).


Domino's Pizza (DPZ): KeyBanc Capital has a Hold on the fast food stock. Though the overall growth potential is favorable, near-term share price gains may be limited by difficult comparisons in both same-store-sales and operating margins. For more on fast food, see McDonald's Scores Magnificent Win in Happy Meal Debacle.

Consumer products: Energizer (ENR) is initiated with a Buy at Janney Montgomery Scott, which has a new Neutral on Helen of Troy (HELE).

Intuit (INTU): The TurboTax owner is a new Neutral at Goldman Sachs.

Atlas Air Worldwide (AAWW): AAWW is begun with a Buy rating and assigned a price objective of $51 at Maxim Group, which cites sustainable growth and a conservative Earnings Per Share multiple of only nine times fiscal 2012.

Software & Services: Ariba (ARBA) and Concur Technologies (CNQR) are both new Neutrals at Goldman. The bank is more bullish on SuccessFactors (SFSF), adding the stock to its Conviction Buy List.

Communications infrastructure companies: American Tower (AMT) and Crown Castle (CCI) are each initiated with Outperforms at Macquarie.

Anthera Pharmaceuticals (ANTH): Brokerage Collins Stewart starts the stock at a Buy and sets a $13 target price. Catalysts include varespladib (P3) for acute coronary syndrome and blisibimod for lupus, with data from both studies expected in Q2 of 2012.

MAP Pharmaceuticals (MAPP): Staying in the space, MAPP is picked up at an Overweight by JPMorgan.

Celldex Therapeutics (CLDX): Jefferies rolls out Buy rated coverage on the small cap stock.

Indian outsourcing & IT stocks: Infosys (INFY) is a fresh Hold at Jefferies, which begins Buy rated coverage on its Bangalore-based rival Wipro (WIT).

Green Plains Renewable Energy (GPRE): Shares get assigned an Outperform and $16 objective with Wedbush.

Steven Madden, Ltd (SHOO): Canaccord Genuity starts the footwear firm at a Buy.


Lowe's (LOW): Goldman gives the home improvement retailer a Buy-from-Neutral increase, sending shares up before the bell.

Lululemon Athletica (LULU): A trio of upgrades after yesterday's steep sell-off for the yoga outfitter. Barclays lifts LULU to Overweight from Equal Weight, Janney Capital boosts the stock to Buy from Neutral, and Keybanc takes it to Buy from Underweight. Positives include the company's plans to aggressively grow the women's line and, in time, men's athletic wear market with sustainably high upper 20% operating margins.

Sina Corp (SINA): Shares of the Chinese Internet outfit are hoisted to Buy from Hold at Deutsche Bank.

Allstate (ALL): The insurance outfit is upgraded to Buy from Hold at Deutsche Bank.

Sun Life Financial (SLF): Staying in the sector, SLF is moved to Equal Weight from Underweight at Morgan Stanley.

Booz Allen Hamilton (BAH): The consulting giant gets upgraded to Outperform from Market Perform with Wells Fargo.

Analog Devices (ADI): The semiconductor stock is now Buy from Neutral at Sterne Agee.


Guess (GES): Citigroup clearly has question marks over the clothing company, now Neutral from Buy at the bank. For related content, see What Really Happened on Cyber Monday? Separating the News From the Hype.

Sirona Dental Systems (SIRO): Goldman puts its money where its mouth is, pulling the stock from its Conviction Buy List.

Rolls Royce PLC: The British luxury car maker is moved to Sell from Neutral at UBS.

Canadian Imperial Bank of Commerce (CM): Shares are now Neutral from Buy, also at UBS.

Cash America (CSH): CSH is cut to Neutral from Buy at Sterne Agee.

Franklin Resources (BEN): Ticonderoga takes BEN to Neutral from Buy. Emerging negatives include global product fatigue and a less favorable asset concentration.

Ameren (AEE): The utility is lowered to Underperform from Neutral by Bank of America-Merrill Lynch.

Beacon Roofing Supply (BECN): Keybanc cuts the company to Hold from Buy.

Louisiana-Pacific (LPX): RBC Capital reduces its recommendation on the lumber firm to Sector Perform from Outperform.

Celestica (CLS): Ticonderoga takes CLS to Sell from Neutral and sets a $5 price objective amid concerns Research in Motion (RIMM), itself out with bad news this morning, will increasingly weigh on the company's 2012 performance.


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