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Upgrades & Downgrades: Panera Bread Rolling In Dough

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Wall Street ratings agencies set the tone for today's stock market.

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Stocks rose for a second straight week to start 2012, the S&P 500 Index (^GSPC) riding a four day winning streak to end up 0.88% as a solid beginning to earnings season overshadowed ongoing European anxiety, at least until Friday the 13th arrived and spoiled the market's mood. JP Morgan's (JPM) 2008 purchase of Bear Stearns for less than David Beckham cost suddenly doesn't seem such a masterstroke after the bank's quarterly earnings tumbled 23% even as Herbalife (HLF) -- which paid big bucks to outfit the aging "soccer star" -- surged 9.0%. Has the financial firm lost its way? Perhaps, but by the time Occupy Wall Street finally finds them things should have turned around again. President Obama finally has a shovel ready jobs plan - and in Sarah Palin's Alaska - and in a week when initial unemployment claims unexpectedly increased to 399,000 a man who likes firing folks won the primary in New Hampshire, whose coins are cursed. Indeed The Old Man of the Mountain collapsed in 2003, fully eight years before the euro, although Europe's common currency, giving it a run for its money, fell to a fresh 17-month low of its own.

Paris - that lover of "The Simple Life" proved money talks and saw Tractor Supply (TSCO) surge 15.6%. France meanwhile was left speechless by an S&P debt reduction suspiciously timed for a Friday ahead of a long weekend. Now only rated AA, the country can hardly afford to buy a vowel but, hey, at least its silent movie just struck gold. Janet Yellen probably wished that, instead of shoutin' she instead spoke with a whisper when caught saying "It's fitting for Chairman Greenspan to leave office with the economy in such solid shape. The situation you're handing off to your successor is a lot like a tennis racquet with a gigantic sweet spot." And One Life to Live ended a run begun in 1968, a year which saw Tet, turmoil, and two assassinations, including one of the man we honored yesterday. 2012 may already be troubled but a little perspective is always useful. Fourth quarter earnings season kicks into high gear today with Check Point Software (CHKP), Citigroup (C), Forest Labs (FRX), M&T Bank (MTB), McMoRan Exploration (MMR), TD Ameritrade (AMTD), and Wells Fargo (WFC) all due to release results.


Initiations:

Microsoft (MSFT): Raymond James resumes Outperform rated coverage on the Dow member. Its price objective is $34.

Commodity companies: Deutsche Bank starts Buy rated coverage on both Steel Dynamics (STLD) and coal play CONSOL Energy (CNX).

Dexcom (DXCM): Shares are begun with a Buy at Brean Murray, which sets a $12.50 price target. The company is one of two in continuous glucose monitoring, a rapidly growing market with high barriers to entry and low penetration of the Type I Diabetic population.

Synageva BioPharma (GEVA): GEVA gets launched with an Outperform at Leerink Swann.

VMware (VMW): The tech firm is initiated with an Overweight at Evercore.


Upgrades:

Applied Materials (AMAT): RBC Capital raises its recommendation on the tech titan to Outperform from Sector Perform.

Royal Gold (RGLD) UBS upgrades its opinion to Buy from Neutral.

Daimler AG: The German automotive giant gets upgraded to Outperform from Neutral at BNP Paribas.

Tesla Motors (TSLA): Staying in the sector, shares are taken to Buy from Neutral at Goldman.

Financial firms: Charles Schwab Corp (SCHW) and Stifel Financial (SF) are both boosted to Buy from Neutral at Goldman Sachs.

Hyatt Hotels (H): Morgan Stanley hoists the accommodation outfit to Equal Weight from Underweight.

Lions Gate Entertainment (LGF): Shares are lifted to Overweight from Equal Weight at Evercore.

Panera Bread (PNRA): The fast food firm, fresh from Friday's all-time high, is moved from Neutral to - appropriately enough - Overweight at Morgan Stanley.

Potash (POT): CIBC World Markets lifts POT to Outperform from Sector Perform.

Medtronic (MDT): Wells Fargo moves the medical device maker to Outperform from Market Perform.

Wynn Resorts (WYNN): The casino company, badly battered last week, is now Positive from Neutral at Susquehanna.

Chemical companies: Westlake Chemical (WLK): and LyondellBasell (LYB) both get Buy-from-Neutral upgrades at Goldman.

Key Energy (KEY): KEY is upgraded to Outperform from Market Perform with Wells Fargo.

Rovi Corporation (ROVI): Brokerage Brean Murray raises its recommendation on ROVI to Buy from Hold and establishes a price objective of $41 after last week's solid share price gain. Sentiment has begun to turn for the better, indicating that investors can begin to be more constructive on the name. Shares are sharply higher ahead of the open as a result.

William Morrison Supermarkets: The British-based grocer, whose shares trade here under stock symbol MRWSY, gets increased to Buy from Hold at Deutsche Bank.


Downgrades:

American Express (AXP): The Dow (^DJI) member is now Neutral from Overweight at JP Morgan.

Intel (INTC): JP Morgan similarly moves INTC, also in the blue chip index, to Neutral from Overweight.

Carnival Corp (CCL): Choppy seas for the cruise company after this weekend's accident in Italy. Shares, slumping 17.7% before the opening bell, are now Neutral from Overweight at JP Morgan and Neutral from Positive at Susquehanna.

Campbell Soup (CPB): JP Morgan is clearly in a merciless mood this morning, also cutting CPB to Underweight from Neutral.

Commodity stocks: AK Steel (AKS) and coal company Alpha Natural Resources(ANR) are each reduced to Hold from Buy at Deutsche Bank.

Central European Distribution Corp (CEDC): The New Jersey-based purveyor of Polish vodka is slashed to Sell from Hold at Deutsche Bank.

Beam Inc (BEAM): The recent alcohol spin off is pulled from Goldman's list of Conviction Buys.

Philip Morris International (PM): The tobacco titan is taken to Neutral from Buy at Goldman.

Dreamworks Animation (DWA): Goldman gives the firm a Sell-from-Neutral downgrade.

Barrick Gold (ABX): Shares are taken to Hold from Buy at Canaccord Genuity.

Live Nation (LYV): LYV is lowered to Hold from Buy at Stifel Nicolaus, which says it sees more muted growth for 2012.

Fifth Third Bancorp (FITB): The regional bank is reduced to Neutral from Outperform with a $15 objective at Robert W. Baird. Although the financial firm is well positioned for the current environment with high capital levels and solid loan growth, recent stock out-performance has resulted in a more balanced risk/reward profile.

Jetblue Airways (JBLU): Dahlman Rose downgrades JBLU to Sell from Hold with a $4.50 target. While the carrier reported solid December traffic results, valuation remains expensive and the potential exists for underperforming passenger unit revenue growth in 2012.

Transportation/Logistics: FedEx (FDX), United Parcel Service (UPS), and JB Hunt Transportation (JBHT) are all lowered to Hold from Buy at Jefferies, which cuts Canadian National Railway (CNI) to Underperform from Hold.

Logitech International (LOGI): Shares of the Swiss wireless mouse maker are moved to Underweight from Neutral at JP Morgan.

Infosys (INFY): The Indian outsourcing and IT outfit is now Hold from Buy at Needham, which cites a lack of upside earnings and revenue growth catalysts to drive the stock meaningfully higher from current levels.

Texas Roadhouse (TXRH): Morgan Stanley takes TXRH to Equal Weight from Overweight.

Patterson-UTI (PTEN): The energy outfit is taken to Market Perform from Outperform with Wells.

U.S. Bancorp (USB): Shares are now Neutral from Buy at Citigroup.

IntercontinentalExchange (ICE): Goldman gives a Neutral-from-Buy downgrade to ICE.

Williams-Sonoma (WSM): The Pottery Barn owner gets cut to Perform from Outperform at Oppenheimer, which takes its target price down by $10 to $37 after the high end retailer recently disappointed investors with a weaker than expected holiday sales update.
No positions in stocks mentioned.
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