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Upgrades & Downgrades: Split Decision on Abercrombie

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Maybe the experts know something we don't know.

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Though stocks did slip last week, the Dow and S&P 500 still posted their best February performance in 12 years as stones and rocks ruled. Rosetta Stone (RST) rose 28.7% in five days, Wall Street developed an odd crush on curling and engagement ring retailer Zale (ZLC) zoomed as a diamond went for a record $35.3 million. (Give or take - the pound is sliding so fast that recent exchange rates are already out of date.) January existing home sales slid to a seven-month low, lead by a 10.9% nosedive in the Northeast, and with Zillow reporting America's zeitgeist couple just sold their Pennsylvania pad at a loss the region's real estate woes look set to run.

And even as Anne Mulcahy abruptly exited Citigroup's (C) board, Snooki unexpectedly shattered the glass ceiling. Today in economics, the Institute for Supply Management's manufacturing index for February is out at 10:00AM Eastern. Earnings are announced by AnnTaylor (ANN), Ares Capital (ARCC), AutoZone (AZO), Ballard Power (BLDP), BP Prudhoe Bay (BPT), Dish Network (DISH), Dress Barn (DBRN), Eagle Bulk Shipping (EGLE), Foot Locker (FL), Gerber Scientific (GRB), H&R Block (HRB), HSBC Holdings (HBC), MBIA Inc (MBI), Toll Brothers (TOL), Tootsie Roll (TR), and Vivendi.

Initiations

Alaska Air (ALK): Stifel Nicolaus starts Alaska Air at a Buy and assigns a price objective of $51. The broker says Alaska has a unique network footprint that, through codesharing, fills in gaps for carriers such as AMR Corporation (AMR) and Delta Air Lines (DAL).

AthenaHealth (ATHN): The stock is reinstated with a Market Perform by Raymond James.

Global Payments (GPN): William Blair begins Global Payments at a Market Perform.

Ventas (VTR): Credit Suisse reinstates coverage on Ventas with a Neutral at and $42 target price.

Upgrades

American International Group (AIG): The insurer is upgraded to Buy from Hold with a $28.50 at Societe Generale.

Whole Foods (WFMI): The stock is upgraded to Neutral from Sell at UBS.

BP Plc (BP): Bank of America/Merrill Lynch lifts BP Plc to Buy from Neutral, noting that the recent market sell-off has created a "compelling valuation opportunity."

Harmony Gold (HMY): Bank of America/Merrill also moves Harmony Gold to Buy from Neutral. See also Why Gold's Rally May Be a Short One.

Dice Holdings (DHX): Thomas Weisel takes Dice Holdings to Overweight from Market Weight.

Norfolk Southern (NSC): Barclays boosts Norfolk Southern, now Overweight from Equal-Weight. Its objective also increases to $62 from $55.

Ensco (ESV): Ensco gets added to the Conviction Buy List at Goldman Sachs.

Tractor Supply (TSCO): The stock gets a Neutral-from-Underweight increase at Piper Jaffray, which takes its price target to $55 from $46.

Pentair (PNR): Piper Jaffray moves Pentair (Overweight from Neutral).

BancorpSouth (BXS): Raymond James raises its rating on BancorpSouth (Outperform from Market Perform; $23 target).

Rowan Cos (RDC): The stock gets a Sector Perform-from-Underperform increase at RBC Capital.

Coventry Health Care (CVH): Morgan Stanley moves Coventry Health Care to Overweight from Equal Weight.

Abercrombie & Fitch (ANF): Cowen upgrades Abercrombie & Fitch, now Neutral from Underperform.

AsiaInfo (ASIA): The stock is showing strength before the bell on the back of a Buy-from-Neutral boost by Goldman Sachs.

Downgrades

Abercrombie & Fitch (ANF): The retailer is downgraded to Sell from Hold ($29 target) by Brean Murray, which believes investor optimism remains materially too high. See also Why Abercrombie's Future Doesn't Look Pretty.

TASER International (TASR): The stock is downgraded to Neutral from Overweight with a $7.50 target at JP Morgan due to valuation and the belief that positive catalysts are back-end loaded in 2010.

Total SA (TOT): Bank of America/Merrill Lynch lowers French oil firm Total SA, now Neutral from Buy.

Bayer AG: Credit Suisse cuts Bayer AG (Neutral from Outperform) as it expects the shares to "mark time against a peer group of pharma stocks against which valuation is no longer compelling." For more on this sector, see Two Ways to Play: Merck and Millipore Kick Off M&A Monday.

Mercantile Bank (MBWM): Raymond James moves Mercantile Bank to Market Perform from Outperform.

Sirius XM Radio (SIRI): The stock gets a Hold-from-Buy cut at Wunderlich, which says the 2010 estimated EBITDA multiple is a high 16.4x, or 13.5x net of NOL benefits.

Royal Bank of Scotland (RBS): The bank stock is now Underperform from Neutral at BNP Paribas.

Leapfrog (LF): The stock gets a valuation-based downgrade (Strong Buy from Buy; $6 price objective) at Needham
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No positions in stocks mentioned.
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