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Upgrades & Downgrades: American Express Plays Its Cards Right


Maybe the experts know something we don't know.

Americans still love a winner, even if a show labeled Lost is given greater priority than a presidential address. The S&P 500 has begun 2009 with six straight victory laps, which would be heartening were it not for the fact that this last occurred in '87, ultimately an awfully ominous annum in equities. Whole Foods' (WFMI) 6.37% surge was good for the best gain in the index on the same day it entered the newlywed game. Yesterday's largely sideways trading action still had its standouts and Adam Sandler may have been onto something in suggesting You Don't Mess With The Zoran (ZRAN), as that stock skyrocketed 7.61% after bullish analyst comments.

Tuesday Morning (TUES), up 99 cents or 32.67% on Monday, was the antithesis of a day late and dollar short. Burger King (BKC) by contrast tumbled 2.03% on a downgrade at the end of a tough 24 hours for beef eaters. In 8:30AM Eastern economics November's international trade deficit widened more than forecast, to $36.4 billion from a revised $33.2 billion. Expect earnings announcements out of Charles Schwab (SCHW), HB Fuller (FUL), KB Home (KBH), Linear Technology (LLTC), and Supervalu (SVU).


Retail: Wells Fargo assumes coverage on Abercrombie & Fitch (ANF), American Eagle (AEO) and Ross Stores (ROST) with Market Performs on each. Tiffany (TIF) is picked up at Outperform by the same broker. See also Retail Sales Uplifting, But There's a Catch.

EMC Corp. (EMC): The stock is picked up with an Outperform at William Blair, which says the shares should get more credit for its control of VMware (VMW).

NetApp (NTAP): The stock is now an Outperform at the same firm as the tech company is well positioned to benefit from the cyclical rebound in storage spending.

Mortgage Insurance: Goldman Sachs starts MGIC Investment (MTG) (Buy) and Radian (RDN) (Neutral).

Qwest Communications (Q): RBC Capital resumes Qwest Communications at a Sector Perform and sets a $5 price target.

REITS: Camden Property Trust (CPT) (Outperform; $48 target) and Equity Residential (EQR) (Perform) are among the REITS initiated at Oppehneimer. For more, see Wrong Time for REITs?


American Express (AXP): The credit card stock is upgraded to Buy from Outperform at Calyon Securities.

Proctor & Gamble (PG): Fellow Dow component Procter & Gamble gets lifted to Buy from Neutral at Bank of America/Merrill Lynch, which increases its price objective to $72 from $64.

MGM Mirage (MGM): The casino stock is up sharply before the bell after getting a Buy-from-Neutral boost by Goldman.

AFLAC (AFL): Barclays believes AFLAC is everything it's quacked up to be after upgrading the insurer to Equal-Weight from Underweight and taking its target up an impressive $22 to $52.

Insurance Stocks: Prudential Financial (PRU) (Equal-Weight from Underweight) and Principal Financial (PFG) (Overweight from Equal Weight) are also increased by Barclays.

Domino's Pizza (DPZ): Domino's gets upped at Citigroup to Buy from Hold. See also From Pizza to Pigskin.

Under Armour (UA): Citi also ups Under Armour to Hold from Sell.

Femsa: Deutsche Bank upgrades Femsa (Buy from Hold) after yesterday's Heineken announcement.

Brown Shoe (BWS): Joy for Imelda Marcos as Soleil upgrades Brown Shoe to Buy from Hold and establishes a target of $16.

MicroStrategy (MSTR): FBR Capital upgrades MicroStrategy is moved to Outperform from Market Perform at FBR Capital since its product cycle is still in its early stages.

FirstEnergy (FE): Deutsche Bank upgrades FirstEnergy to Buy from Hold.


Alcoa (AA): The stock is downgraded to Underperform from Market Perform at BMO Capital Markets after yesterday's disappointing earnings.

Retail: Goldman lowers Gap (GPS) and Family Dollar (FDO), each now Sell from Neutral.

Public Service Enterprise Group (PEG): Deutsche Bank downgrades Public Service Enterprise Group to Hold from Buy due to risk around the next month's New Jersey BGS procurement.

Colgate-Palmolive (CL): The stock is lowered to Neutral from Buy at Bank of America/Merrill Lynch.
No positions in stocks mentioned.
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