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Upgrades & Downgrades: Dialing Up Motorola


Maybe the experts know something we don't know.

68 years after a date which will live in infamy came a day no one will long remember in equities. While Sprint (S) showed no signs of fatigue, its 13.28% gain topping the S&P 500, the index itself (-2.73 points) along with the Dow (+1.21) and Nasdaq (-4.74) were all illustrative of a market turning down the volume and staggering over the finish line for '09. Ben Bernanke's free lunchtime boost for bourses was short lived and oil fell for a fourth straight session.

Trading was especially rough for diamond jeweler Zale Corp (ZLC), which tumbled 24.4% on a downgrade and must hope its hit was a Bad Day which occurs only once a decade. (Rival Tiffany (TIF) rose, but would do well to avoid throwing stones lest they land in glass houses). FedEx (FDX) showed strength after hours on another positive earnings preannouncement as it attempts to catch up to the profit margins of the Pony Express. It's all quiet on the economic front though US weekly chain store sales did slip 1.27% according to the latest ICSC/Goldman Sachs survey. Earnings announcements include AutoZone (AZO), Brown-Forman (BF-B), CKE Restaurants (CKR), Cooper Cos (COO), H&R Block (HRB), Korn/Ferry (KFY), Kroger (KR), Men's Warehouse (MW), SAIC Inc (SAI), Sanderson Farms (SAFM), Talbots (TLB), and Vail Resorts (MTN).


Apple (AAPL): The stock is now covered at Calyon Securities with a Buy and $260 target price, with its increasingly robust set of apps and an anticipated tablet launch in 2010 among the favorable factors.

Motorola (MOT): The mobile device maker is up before the bell after being begun with an Outperform and $11 price objective at Sanford Bernstein.

AOL Inc (AOL-WI): The stock is initiated at Hold at Hudson Square as its dial-up subscription business is likely to disappear over the next few years. See also Will AOL Overcome its History or Be Hobbled By It?

Time Warner Cable (TWC): Needham initiates Time Warner Cable with a Buy ($55 target) based on first half 2010 deleverage.

Baidu (BIDU): Kaufman initiates Baidu at Hold.

Hotel Stocks: Robert Baird initiates Intercontinental Hotels Group (IHG) and Choice Hotels (CHH), each at Neutral.

Daimler AG (DAI): Barclays begins Daimler AG at Underweight.

Baker Hughes (BHI): Stifel Nicolaus starts Baker Hughes at Hold due to uncertainties associated with the ongoing organizational restructuring.

Energy Sector: Citigroup starts coverage of the Energy & Petroleum sector, its Buys including Anadarko (APC) ($80 price objective) Apache (APA) ($130), EOG Resources (EOG) ($110), and XTO Energy (XTO) ($55). Among the Holds are Chesapeake Energy (CHK) ($28), Devon (DVN) ($75), EnCana (ECA) ($30), and Noble Energy (NE).

Healthcare Realty (HR): KeyBanc Capital initiates Healthcare Realty at Hold.

Watson Pharmaceuticals (WPI): The stock is resumed at Neutral by JP Morgan.

Aeropostale (ARO): Standpoint Research starts Aeropostale with a Buy and establishes an long term price objective of $45. Initial results from the outfitter's overseas expansion is impressive. See also How Aeropostale Defies Recession for Teens.


Soilar Stocks: JA Solar (JASO) and Suntech Power (STP) are each upgraded to Market Weight from Underweight at Thomas Weisel. For more on this sector, see Solar Industry Starting to Heat Up the Market.

Real Estate Investment: FBR Capital boosts BioMed Realty (BMR) and Boston Properties (BXP), both to Outperform from Market Perform.

Ericsson (ERIC): European telecom titan Ericsson is increased to Overweight from Neutral at HSBC.

M&T Bank (MTB): SunTrust upgrades M&T Bank (Buy from Neutral) and sets an $85 price objective as credit losses should be manageable over the remainder of the cycle.

Forest Oil (FST): Morgan Stanley moves Forest Oil to Equal Weight from Underweight.

Sysco (SYY): Citigroup raises its Sysco rating to Buy from Hold and takes its target to $34 from $28.

UAL Corp. (UAUA): The airliner is upgraded to Buy from Hold at Jesup & Lamont. See Airline Stocks Ready for Takeoff.


Real Estate: AvalonBay (AVB) and Equity Residential (EQR) are each cut to Market Perform from Outperform at FBR Capital.

DISH Network (DISH): The stock is cut from the US Focus List at Credit Suisse after its recent share price strength.

Sprint Nextel (S): The stock gets a Neutral-from-Buy downgrade at Pali Research, which says the rate of improvements in subscriber losses is not enough to grow EBITDA.

Royal Bank of Scotland (RBS-A): The financial is now a Sell (from Reduce) at broker WestLB.

El Paso Electric (EE): Jefferies downgrades El Paso Electric (Hold from Buy) due to a lower projected 2012 rate base.
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