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Upgrades & Downgrades: Beverage Companies Starting to Fiz


Maybe the experts know something we don't know.

Grease and Greece sent stocks sliding, as weak same store sales at McDonald's (MCD) and a debt downgrade in Athens unnerved investors. The Dow's steepest loss since November 27th erased all its December gains and a day which will be quickly consigned to the trash heap was brought to a fitting end by executives at a waste collection company. That it's hard to have super markets without help from supermarkets was apparent as grocer Kroger (KR) cratered 11.90% on an earnings miss and Imperial Sugar's (IPSU) 17.76% plunge is impossible to sugar coat. By contrast our headline stock Motorola (MOT) moved up an impressive 49 cents, even if 50 Cent aims to go one better in entertainment's unlikeliest combination. The Chairman of Procter & Gamble (PG) announced an appropriately drama free transition on the day it exited soap operas.

Amid all the talk of Tiger's prenup, an equally troubled marriage ends today as Time Warner (TWX) spins off AOL (AOL-WI). In economics, at 10:00AM Eastern October wholesale inventories are expected to decline again and weekly energy inventories are out at 10:30 AM. And as if yesterday's Greek grief didn't cast enough of a pall on equities, Greif (GEF) and Pall (PLL), along with Movado (MOV), Lululemon Athletica (LULU), and Harry Winston Diamond (HWD) announce earnings.


Beverages: Calyon Securities rolls out coverage on Coca-Cola (KO) and Coca-Cola Enterprises (CCE) with Buys on both and respective price objectives of $71 and $26. The firm also picks up Pepsico (PEP) (Underperform; $69) and Dr Pepper Snapple (DPS) (Buy; $33).

Safeway (SWY): UBS initiates Safeway at a short-term Sell.

American Water (AWK): The stock is begun at Outperform by Barrington Research which sees the stock as a compelling dividend and good growth story.

Dole Food (DOLE): The stock gets assumed at Neutral by JP Morgan.

Basic Materials: Martin Marietta Materials (MLM) gets initiated with a Buy at Goldman, which also begins Vulcan Materials (VMC) at a Neutral.

Warner Chilcott (WCRX): Morgan Stanley starts Warner Chilcott with an Overweight and establishes an objective of $32.

WPP Group (WPPGY): HSBC initiates WPP Group at Overweight.

Energy Stocks: Great Plains Energy (GXP) (Perform) and CMS Energy (CMS) (Outperform) are among the stocks in their sector assumed at Oppenheimer.


3M (MMM): The stock is up before the bell after Citigroup raised its rating to Buy from Hold.

Cooper Companies (COO): The stock is upgraded at Wells Fargo (Outperform from Market Perform).

RealNetworks (RNWK): RealNetworks is now Neutral, up from Underweight, at JP Morgan.

BioMarin Pharmaceutical (BMRN): Collins Stewart lifts BioMarin Pharmaceutical to Buy from Hold with a $22 target price based on potential positive pipeline data.

Sprint Nextel (S): The mobile phone company gets a Buy-from-Hold boost at Citigroup, which cites the prospect of retaining better strategic value for its spectrum assets. For a contrary opinion, see Why Verizon and AT&T Are Leaving Sprint in the Dust.

Alliant Techsystems (ATK): Macquarie increases Alliant Techsystems to Outperform from Neutral.

CA Inc. (CA): Deutsche Bank upgrades CA Inc to Buy from Hold as cloud computing represents an opportunity for the tech firm.


Kimberly-Clark (KMB): Barclays Capital downgrades Kimberly Clark (Underweight from Equal Weight) and trims its target $2 to $66.

Kroger (KR): UBS lowers Kroger to Neutral from Buy, and reduces its price objective to $22 from $30 following yesterday's sell off.

Defense Stocks: Macquarie reduces aerospace and defense contractors Raytheon (RTN) (Neutral from Outperform), Lockheed Martin (LMT) (Underperform from Outperform) and L-3 Communications (LLL) (Underperform from Neutral).

Accenture (ACN): Kaufman Brothers cuts downgrades Accenture (Hold from Buy) as recovery is only expected to be modest.
No positions in stocks mentioned.
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