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Upgrades & Downgrades: Stock Up on Costco?


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

As the world learned it lost the last living veteran of the Great War - a servicewoman born in 1901, which strictly speaking was the first year of the 20th Century - the Nasdaq (^IXIC) partied like it was the last year of the 20th Century. The index hit its highest level since December 2000, boosted -- like other bourses -- by better news out of Greece. That country's debt discussions are inching forward, although rescuing an economic basket case was presumably not what the European Union had in mind when it was founded amid unbridled optimism two decades ago to the day. Lightbridge Corporation (LTBR) was the Nasdaq's top performer, the developer of nuclear fuel technology posting a 34.00% increase as Iran's Mohammad Hossein Farjoo confirmed noted atomic engineer Homer Simpson would be banned from the country forthwith as the nuclear noose tightens. Google's (GOOG) doodle celebrated the bicentennial of Charles Dickens, a man whose many memorable quotes include "charity begins at home." As such, he won't approve of this morning's downgrade of the homebuilders but bear in mind the author also wrote of how "Papa, potatoes, and poultry are all very good words for the lips." Thus the increase in McDonald's (MCD), up 1.43% to top the Dow (^DJI), was fitting. As was Greek Prime Minister Papademos's continuing search for a sugar daddy. As for poultry, Kentucky Fried Chicken owner Yum! Brands (YUM) - upgraded this morning - rose 2.63% to reach a peak not seen since 1997.

With fellow fast food plays Pizza Inn (PZZI) (up 12.09%) and Panera Bread (PNRA) (another record high) doing equally well, what must hungry hardscrabble orphan Oliver think of it all? Methinks it's a far, far better thing for him to simply scrounge up an Apple (AAPL) a day, especially with its gain of 1.05% taking it to yet another all time high. And Tiny Tim, desperately trying to escape the austere clutches of Ebenezer Scrooge, could do much worse that to count his pennies in Coinstar (CSTR) which surged 13.79% to a new 52-week peak. Elsewhere a researcher reduced the rating on Achillion Pharmaceuticals (ACHN), the New Haven firm tumbling 10.33% as a result. Connecticut's second largest city was apparently evenly split on its Super Bowl affiliations yet some of its citizens surely gave the cold shoulder to beaten quarterback Tom Brady. As consolation, hopefully he has shares in BioMimetic Therapeutics (BMTI), which treats rotator-cuff tears and rose 9.27%. An unusually slow start to the week in economic data continues with nothing of note due out today but the cascade of quarterly earnings announcements continues with Akamai (AKAM), BHP Billiton (BHP), Cisco (CSCO), Groupon (GRPN), Madison Square Garden (MSG), News Corp (NWSA), Nissan Motor (NSANY.PK), Sanofi (SNY), Time Warner (TWX), TripAdvisor (TRIP), and Whole Foods (WFM) all reporting results.


Costco (COST): The warehouse giant gets resumed with a Market Perform at Raymond James.

Food & Beverages: KeyBanc Capital begins Buy rated coverage on both J.M. Smucker(SJM) and Peet's Coffee & Tea (PEET), assigning respective price objectives of $95 and $80. For the former, the broker believes they can continue to deliver double-digit EPS growth over the long term assisted by acquisitions. In the case of Peet's, the packaged coffee and tea business is positioned to double its market share of the specialty/premium bagged coffee segment owing to its differentiated product offering and method of delivery.

Vitamin Shoppe (VSI): Shares are started at Equal Weight by Morgan Stanley.


YUM! Brands (YUM): Goldman Sachs gives the owner of Pizza Hut and Taco Bell a Neutral-from-Sell upgrade.

OpenTable (OPEN): The stock, doubly downgraded elsewhere this morning, is now Overweight from Neutral at Piper Jaffray.

Banco Bilbao Vizcaya (BBVA): WestLB raises its recommendation on the Spanish financial firm to Neutral from Reduce.

Plains Exploration (PXP): Susquehanna upgrades PXP to Positive from Neutral.

Vishay Intertechnology (VSH): The tech stock is taken to Overweight from Neutral at JP Morgan.


BP Plc (BP): Société Générale downgrades the oil giant to Hold from Buy, saying "The key risk is the start of the Macondo trial on February 27." Shares are trading lower ahead of the open as a result.

Buffalo Wild Wings (BWLD): Shares are moved to Market Perform from Outperform at Raymond James.

Morgan Stanley (MS): Collins Stewart cuts the financial firm to Hold from Buy.

Royal Bank of Scotland (RBS): RBS is reduced to Neutral from Buy at Citigroup.

UBS AG (UBS): Staying in the space, Deutsche Bank slashes the Swiss bank to Sell from Hold.

ING Groep (ING): The Dutch financial outfit gets downgraded to Neutral from Buy at Goldman.

OpenTable (OPEN): The restaurant reservation company is downgraded by both Oppenheimer (Perform from Outperform with a $54 target price) and Credit Suisse (Neutral from Outperform.) Oppenheimer adds it expects weaker first quarter revenues on difficult domestic comparisons, reduced international dinner pricing, and meaningfully higher expenses.

NETGEAR (NTGR): NTGR is now Hold from Buy at Deutsche Bank.

Demand Media (DMND): Morgan Stanley moves the equity to Underweight from Equal Weight.

Protective Life (PL): The insurance outfit gets lowered downgraded to Neutral from Buy by Bank of America-Merrill Lynch.

Owens Corning (OC): Citigroup cuts OC to Neutral from Buy.

Genomic Health (GHDX): Citing increased operating expenses and product development uncertainties, MLV & Co takes the shares to Hold from Buy and trims its target by $1.50 to $30.

Homebuilders: Beazer Homes (BZH) and Meritage Homes (MTH) both get downgraded to Sell from Neutral at Guggenheim.

Noranda Aluminum (NOR): The commodity company is cut to Neutral from Buy by Bank of America-Merrill Lynch.

Louisiana-Pacific (LPX): UBS lowers LPX to Sell from Neutral.

Gaylord Entertainment (GET): Shares get moved to Neutral from Overweight at JP Morgan.
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