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Upgrades & Downgrades: Kimberly-Clark Cries Into Its Kleenex


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

"Should auld acquaintance be forgot." On the eve of this, the day we honor the Scotsman who wrote those words, investors got a nasty blast from the past, renewing old acquaintances with a Club Med country whose horrendous economic issues they naïvely hoped had been consigned to history. Since citizens of Robert Burns' birthplace are all about saving -- not losing -- money, you can bet your bottom dollar that they will have felt the market's pain more than most yesterday. The Dow (^DJI) dropped for a second straight day and S&P 500 (^GSPC) shares fell for the first time in six sessions amid an impasse in Greek debt discussions. As Obama prepared to give his State of the Union speech, one only hopes he was short the fat cats at his hometown Bank of Hawaii (BOH), which declined 1.79% after an analyst downgrade. Indeed the ghosts of the president's predecessors were everywhere. George W. Bush - who needs no extra encouragement to avoid pretzels after his near death experience at the hands of one - could take enormous satisfaction in J&J Snack Foods (JJSF), which sells the tasty treat, tumbling 4.08% after announcing results. Dubya, however, may want to reconsider "not doing nuance" based on this morning's 5% surge in Nuance Communications (NUAN), the company benefiting from Apple's (AAPL) enormous coattails. Ronald Reagan, aka the "Teflon president", still has the magic touch as DuPont (DD), maker of the polymer, edged up 0.12% despite earnings - in common with a worrying number of firms so far this reporting season - that were distinctly so-so. And Bill Clinton, the boy from Hope, saw Arkansas' own Wal-Mart (WMT) increase 0.79% to a new 52-week peak.

For once John Boehner kept the water works under control for last night's address - presumably he has gone long TearLab (TEAR), which tests for dry eye and advanced 28.80% earlier in the day. Maggie Thatcher, more of a man than any in her cabinet, would have hit the House leader with her iconic handbag for showing such blubbering emotion. She can certainly afford to; Coach (COH), founded in 1941, jumped 5.81% to hit the highest level in its history on what was a good day all round for The Iron Lady. Coaching definitely beat training, railroad company Kansas City Southern (KSU) sliding some 7.58%. A senator turned to his BlackBerry immediately after brain surgery but it doesn't take a rocket scientist to see Research in Motion (RIMM), which slumped a further 3.53%, remains on life support. And Japan just posted its first annual trade deficit since 1980. That's thirty-odd years, or the approximate length of time it took one of its citizens to learn World War Two was over, an event whose anniversary we commemorated yesterday. Thankfully in this age of the iPhone, information travels a wee bit quicker. Today in economics, December 2011 pending home sales are out at 10:00 a.m. Eastern. The FOMC discloses its interest rate decision at 12:30 p.m., followed by Fed head's Ben Bernanke's press conference at 2:15 p.m. Hump Day of peak week for fourth quarter earnings includes announcements out of Abbott Labs (ABT), Boeing (BA), Corning (GLW), MeadWestvaco (MWV), Netflix (NFLX), Novartis (NVS), SAP AG (SAP), and Xerox (XRX).


Zynga (ZNGA): The online social gaming outfit, a recent IPO, is initiated at an Overweight by Barclays, Morgan Stanley, and JP Morgan, the latter assigning it a price objective of $12. Goldman Sachs starts coverage at a Buy but Bank of America-Merrill Lynch is less bullish and has a new Neutral.

Michael Kors Holdings (KORS): The fashion firm is a fresh Outperform with Wedbush.

Inergy Midstream (NRGM): Barclays (Overweight) and Wells Fargo (Outperform) both begin bullish coverage on NRGM.

Mid-Con Energy Partners (MCEP): Oppenheimer establishes an Outperform and assigns a $24.50 price target. Catalysts include a low leverage ratio of only 1.0 times Debt-to-EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

Biotechs: Oncothyreon (ONTY) is begun with a Buy at Cantor Fitzgerald, which has a Hold on Dendreon (DNDN).

Riverbed Technology (RVBD): Northland Securities resumes RVBD at Outperform and has a $35 target price.


Starbucks (SBUX): Oppenheimer juices its recommendation on the java king to Outperform from Perform, setting a $56 objective on a company that shows an enviable ability to lock-in coffee costs at lower prices than in fiscal 2012. Incremental accretion from its K-Cups initiative could also act as a catalyst.

Alcatel-Lucent (ALU): The French telecom firm is upgraded to Hold from Sell at Société Générale.

Brinker International (EAT): The Chili's Grill operator gets a Buy-from-Hold boost at KeyBanc Capital, which has a $31 target price on a stock it says has several encouraging initiatives in the works. Shares are higher ahead of the open as a result.

CSX Corp (CSX): Robert W. Baird raises its recommendation on the railroad operator to Outperform from Neutral and sets a target of $26. The broker believes the current risk/reward profile presents an attractive entry point for investors seeking more cyclical rail exposure and would be buyers at current levels.

Shipping stocks: Overseas Shipholding (OSG), Genco Shipping & Trading(GNK), and Eagle Bulk Shipping (EGLE) are all hoisted to Hold from Sell at Deutsche Bank.

Air Lease (AL): Shares are lifted to Overweight from Neutral at JPMorgan.

Regions Financial (RF): RBC Capital Markets increases the stock, downgraded elsewhere this morning, to Outperform from Sector Perform.

Watson Pharmaceuticals (WPI): Morgan Stanley moves the healthcare company to Overweight from Equal Weight.


McDonald's (MCD): The fast food firm, a key Dow component, is downgraded to Perform from Outperform at Oppenheimer and Outperform from Buy at Crédit Agricole. Though the broker continues to regard it as a best-in-class operator, low operating leverage and currency risks mean that the argument for multiple expansion appears stretched, especially at 1.7 times its PEG (Price/Earnings to Growth) ratio.

Kimberly-Clark (KMB): The consumer products powerhouse, whose brands include Kleenex and Huggies, is taken to Neutral from Buy at UBS after its earnings announcement.

Oracle (ORCL): Macquarie slashes the stock to Neutral from Outperform, citing issues over its emerging hardware business.

Financials: Goldman Sachs (GS) and Morgan Stanley (MS) each get downgraded to Neutral from Overweight at JPMorgan, which worries about the impact of proposed industry rule changes calling for an increase in capital requirements.

Royal Bank of Scotland (RBS): Robert Burns will be turning in his grave today as the Edinburgh outfit gets reduced to Neutral from Buy at UBS.

Regions Financial (RF): Bank of America-Merrill Lynch lowers its rating to Neutral from Buy.

KeyCorp (KEY): Staying in the sector, shares are cut to Underperform from Market Perform by Keefe Bruyette.

Siemens AG (SI): The German industrial giant is now Neutral from Overweight at HSBC Securities.

Diageo plc (DEO): The Guinness maker gets moved Hold from Buy brokers Collins Stewart.

Nestlé: Collins Stewart also cuts the Swiss company to Hold from Buy.

Potash (POT): Dahlman Rose reduces its rating on the chemical company to Sell from Hold with a $41 price objective. They see significant margin pressures with limited pricing gains in 2012.

Baker Hughes (BHI): The oil services outfit is now Neutral from Positive at Susquehanna, sending shares lower ahead of the open.

FirstEnergy (FE): The electric utility is moved to Market Perform from Outperform at FBR Capital, which trims its target price by $8 to $40.50 from $48.50 amid a concerning decline in power and natural gas prices since the third quarter.

Aircastle (AYR): AYR shares are now Neutral from Overweight at JPMorgan.

NVIDIA (NVDA): JMP Securities takes the tech outfit to Underperform from Market Perform.

Equity Lifestyle Properties (ELS): The REIT is reduced to Market Perform from Outperform at JMP Securities.

FactSet (FDS): Shares are downgraded to Hold from Buy at Brigantine.
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