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Upgrades & Downgrades: Nike Just Can't Do It

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

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Granted, given the choice, most people would probably rather spend a Week With Marilyn than one with Mr. Market. But for sheer thrills and spills, even Ms. Monroe would have a hard time topping the excitement equities have recently provided us in precisely the same time frame. No sooner did stocks post their worst Thanksgiving week since 1932 than equities enjoyed their best week since 2009. The S&P 500 Index ended up 7.39% amid coordinated global central bank action and an unexpected plunge in November's U.S. unemployment rate to 8.6% from 9.0%, its lowest level for 33 months. Pfizer (PFE) gained 7.8% despite the loss of patent protection from its iconic little pill from the late 1990s. (This one, not the other one). Central European Distribution Corp (CEDC), a New Jersey based purveyor of Polish vodka to Russia, jumped 55.74% after Russian Standard Vodka bought a 9.9% stake in the company. Days later, someone with a wicked sense of humor picked the two countries to play each other in next summer's Euro 2012 soccer tournament. Insider trading? No, probably just coincidence, especially since Congress is suddenly adamant about putting a stop to that scourge. On Monday, inebriated executives of Research in Motion (RIMM) were placed in plastic handcuffs at 34,000 feet and thus unable to give their employer the thumbs down on Friday, when the BlackBerry maker fell another 9.74%.

Crude oil advanced 2.8% to go back above $100 a barrel in a surging commodity space. That turkey who walked into a gas station two days before Thanksgiving was smart to guzzle when he did, though one fears the poor soul is no longer with us. A trip to a BP Plc (BP) gas station in Stamford certainly proved profitable for three mystery money men from Connecticut, who claimed a $254 million Powerball jackpot even as their hometown lost power. Never mind, Greenwich-based scented candles maker Blyth Inc (BTH) ended up 3.50% at week's end to a fresh 52-week peak after announcing earnings. Also in the Nutmeg State, Waldo the Bull went walkabout, presumably in a fruitless search for Jon Corzine. And Britain marked 21 years to the day since the Channel Tunnel bonded the country to the European mainland for the first time in approximately eight millennia. Alas in England they regard such closer ties to their continental cousins as anything but lucky. Today in economics, October factory orders and November's Institute for Supply Management services index are each out at 10:00 a.m. Eastern. On the earnings front Dollar General (DG), Hi Tech Pharmacal (HITK), and Pep Boys – Manny, Moe & Jack (PBY) are all due to release results.


Initiations:

General Motors (GM): The car company is a new Neutral at Piper Jaffray.

TiVo Inc (TIVO): UBS begins the stock at a Buy.

Cobalt International Energy (CIE): CIE is assigned a Buy at Deutsche Bank.

Rackspace Hosting (RAX): Shares are a new Neutral at Collins Stewart, which sets a $43 price target.

Hologic (HOLX): Needham begins Buy rated coverage and establishes a $22 target. The brokerage believes a 3-D mammography upgrade cycle is imminent and likely to drive shares higher, much as a transition from film to digital did several years ago.

Trius Therapeutics (TSRX): The small cap stock is initiated with an Outperform and $12 target Outperform at Oppenheimer. If approved, its lead pipeline candidate Tedizolid for acute bacterial skin and other infections will allow TSRX to meaningfully penetrate a multi-billion dollar market globally. For related content, please see December Catalysts for Drug and Biotech Stocks.

Cliffs Natural Resources (CLF): Goldman Sachs resumes coverage with a Buy.

Tech stocks: SanDisk (SNDK) is begun with a Buy at Nomura, which has a new Neutral on Micron (MU).


Upgrades:

American Eagle Outfitters (AEO): BMO Capital boosts the retailer to Outperform from Market Perform.

United Continental (UAL): The newly merged air carrier is upgraded to Buy from Neutral at Ticonderoga, which establishes a price objective of $33. The broker believes last week's chapter 11 filing from competitor AMR Corp (AMR), owner of American Airlines, is likely to improve UAL's already optimistic outlook even further.

LinkedIn (LNKD): Shares are lifted to Equal Weight from Underweight with a $70 target price at Evercore. Also read Conor Sen's 2011 Recap: Death Throes of the Baby Boomer Society.

Time Warner Cable (TWC): Wells Fargo takes TWC to Outperform from Market Perform.

Comcast (CMCSA): The stock is upgraded to Buy from Hold at Stifel.

Take-Two (TTWO): Shares are upgraded to Outperform from Perform at Pacific Crest.

DR Horton (DHI): Barclays boosts the homebuilder to Overweight from Equal Weight.

Oil service stocks: Transocean (RIG) and Nabors Industries (NBR) are each Outperform from Market Perform at BMO Capital.

Royal Bank of Canada (RY): The financial firm is upgraded to Buy from Hold at Canaccord Genuity.

Health Management Associates (HMA): Leerink Swann hoists HMA to Outperform from Market Perform.

Willis Group (WSH): Citigroup gives the insurance broker a Buy-from-Neutral increase.

Dole Food (DOLE): Wells Fargo raises its rating to Outperform from Market Perform.


Downgrades:

Alcoa (AA): The Dow member gets cut to Neutral from Buy at Goldman.

Nike (NKE): The athletic apparel giant is now Hold from Buy at McAdams Wright Ragen. While upcoming global sporting events are likely to drive excitement for such products, shares appear fully valued in light of still challenging consumer conditions and continued cost pressures.

Papa John's (PZZA): The fast food firm is downgraded to Sell from Hold with a $32 target at Feltl & Co amid concerns over 2012 earnings guidance.

Autodesk (ADSK): Shares are now Sell from Neutral at Goldman, sending the stock lower ahead of the open.

Dreamworks Animation (DWA): Piper Jaffray downgrades DWA to Neutral from Overweight.

Cablevision (CVC): CVC is cut to Market Perform from Outperform with Wells Fargo.

Molex (MOLX): Goldman moves MOLX to Neutral from Buy.

Riverview Bancorp (RSVB): The recommendation is reduced to downgraded to Hold from Buy with at Wunderlich, which cites a significant deterioration in asset quality.

SuccessFactors (SFSF): Morgan Keegan moves its rating to Market Perform from Outperform with a price objective of $40. Shares are no longer trading on fundamentals following an acquisition offer from Germany's SAP AG (SAP).

Valero Energy (VLO): The oil refiner is cut to Hold from Buy with a $23 target at The Benchmark Company. A less favorable mid-cycle earnings assessment suggests fair value roughly equal to the current share price.

Kaydon (KDN): Shares are downgraded to Hold from Buy at Keybanc.

Chicago Bridge & Iron (CBI): Goldman pulls the stock from its list of Conviction Buys.

Incyte (INCY): The stock is now Neutral from Buy at Citigroup.


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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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