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Upgrades & Downgrades: Hungering for Yum Brands

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Maybe the experts know something we don't know.

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Stocks seesawed, with the S&P 500 snapping a six session winning streak on the anniversary of last year's market low. At least losses in lackluster trading -- it was the second slowest trading day of 2010 -- can't be blamed on Canada. Our northern neighbors' Research in Motion (RIMM) and Potash Corporation of Saskatchewan (POT) each rose on upgrades. Canucks also made quick bucks on two equities at fresh 52-week highs, Vancouver yoga guru Lululemon (LULU) (who knew Canadians aim to be even more chilled out?) and Tim Hortons (THI), the restaurant chain founded by a hometown hockey hero. Charles Schwab (SCHW) -- up 0.42% -- enjoyed a decent day but if investors benefited from a Talk to Chuck then listening to Charlie Brown was even more enriching as MetLife (MET) moved up 5.09% on acquisition activity.

By contrast H&R Block (HRB), which could benefit from the business of both our Treasury Secretary and Charlie Rangel (who headed the committee which writes tax laws), tumbled 2.33% in extended trading after it processed 7% fewer filings through February. And with America's unemployment rate (9.7%) approaching that of France (10%) our schools are now experimenting with that other Gallic invention, the four-day week. The slow start to the week in economics continues but earnings are expected out of Analogic (ALOG), Boston Beer (SAM), Collective Brands (PSS), Dick's Sporting Goods (DKS), J. Crew (JCG), Kroger (KR), and Tootsie Roll (TR).

Initiations

Novell (NOVL): The stock is initiated at an Outperform by Macquarie, which assigns a price objective of $7.50.

Insurance Stocks: Citigroup starts several insurance stocks at Buy, including Dow component Travelers (TRV) and XL Capital (XL). Progressive (PGR), Chubb (CB), ACE Limited (ACE), and Allstate (ALL) are among the Holds while W. R. Berkley (WRB) is a Sell.

Cerner (CERN): Wells Fargo starts Cerner at Market Perform.

Rail Stocks: Morgan Stanley now covers Kansas City Southern (KSU) and Canadian Pacific (CP), each Equal Weights.

Linn Energy (LINE): Wells Fargo has a new Market Perform on Linn Energy.

Biogen Idec (BIIB): Soleil Securities begins coverage on Biogen Idec at a Buy and sets a target of $70, saying consensus is again overestimating risks to Tysabri demand. For a related story, see Five Biotech Takeout Targets.

Upgrades

Yum Brands (YUM): UBS upgrades Pizza Hut parent Yum Brands, now Buy from Neutral. For more on the sector, see Has the Breakfast Bubble Popped?

Buckle Inc. (BKE): The stock is boosted by Susquehanna (Positive from Neutral).

Petrohawk Energy (HK): Wells Fargo raises its rating on Petrohawk Energy to Outperform from Market Perform.

Jacobs Engineering (JEC): Bank of America/Merrill Lynch lifts Jacobs Engineering to Buy from Neutral.

Aetna (AET): Bank of America/Merrill also moves Aetna to Neutral from Underperform and takes its price target up $4 to $36.

Vodafone (VOD): The stock gets a 180 degree (Outperform from Underperform) upgrade by BNP Paribas, which believes European top line growth will improve and fiscal 2011 guidance should support margins.

Nestle: Another continental name, Nestle, is now Overweight from Neutral at JPMorgan, which assigns the stock top pick status among pan-European food producers. The Swiss food giant is seen as "less exposed" to the risk of rising raw material costs this year.

Cerus (CERS): The stock is up sharply ahead of the open after an Outperform-from-Neutral boost by Robert Baird, which believes valuation doesn't fully appreciate Intercept's current potential.

United Technologies (UTX): The stock is upgraded to Outperform from Neutral at Cowen.

Downgrades

Cigna (CI): Bank of America/Merrill Lynch lowers Cigna (Underperform from Neutral) and reduces its target price to $38 from $41.

Solar Stocks: JP Morgan cuts both Evergreen Solar (ESLR) (Neutral from Overweight) and First Solar (FSLR) (Underweight from Neutral). See also What Energy Charts Are Trying to Say.

Cheesecake Factory (CAKE): Valuation concerns see Cheesecake Factory downgraded to Neutral from Buy at MKM Partners, which now suggests a rotation into discounted names such as CBRL.

Genzyme (GENZ): The stock is removed from Morgan Joseph's near-term trading list due to year-to-date outperformance. Additionally, the first quarter is a seasonally light time for revenue-generating drug companies and a relatively stronger dollar will not help comparisons.

Toyota Motors (TM): The automaker's troubles continue after a Hold-from-Buy downgrade at Standpoint Research

Comerica (CMA): The stock is cut to Market Perform from Outperform by BMO Capital.
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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