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Upgrades & Downgrades: Analyst Goes Apple Picking


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

That guy in Chile who got a frosty reception for trying to steal five tons of glacier ice to make cocktails was likely only trying to tell us to keep the champagne on hold as far as any delusions of a quick Greek debt deal are concerned. Politicians in Athens continue to proceed at a pace that is not so much glacial as arthritic snail, one reason why shares remained essentially frozen in place amid more interminable delays to seal an austerity deal. To its credit the S&P 500 Index (^GSPC) managed to eke out a big enough increase to take it to a seven-month high on a day that did feature several notable movers. Cognitive dissonance reigned supreme as we learned of a precipitous plunge in the amount of trans-fats in America's bloodstream even as calorie king Buffalo Wild Wings (BWLD) surged 17.10% to an all time peak, although it appears their plump profit margins are almost entirely due to one wing man in Japan. Panera Bread (PNRA), whose products are similarly wicked on the waistline, shed 7.22%, investors wisely opting to take a recent parabolic breakout to new highs with a serious pinch of salt. New York Knicks owner Madison Square Garden (MSG) moved up 1.28% to a fresh best after reporting results - who needs your top two stars when you can call on an unheralded Asian-American Ivy League graduate to perform Miracles on 34th Street?

Meanwhile an outer borough boy born in the Bronx with the singularly unfortunate surname of Lifshitz didn't do too badly either, Ralph Lauren (RL) rising 9.18% to a level not seen since he took the clothing company public in 1997. Guidance Software (GUID) surged 34.15% to top the Russell 2000 Index after giving good earnings guidance but Moody's (MCO), which has lately delivered a litany of after-the-fact downgrades to Europe, learned it doesn't pay to be mean by falling 1.72% as fourth-quarter profit plunged 30%. An equity analyst put his money where his mouth is by establishing no more than a modest Market Perform on Costco (COST), seeing such skepticism rewarded when it slipped 0.05%. And as the World Trade Center site continues to be billions over budget after 11 years, runners raced up all 86 floors of the Empire State Building, built in 18 months during the depths of a Depression. Today in economics, December 2011 wholesale inventories are expected to tick up at 10:00 a.m. Eastern. A blizzard of earnings announcements includes Activision Blizzard (ATVI), Bunge (BG), Credit Suisse (CS), Diageo (DEO), Expedia (EXPE), ING Groep (ING), LinkedIn (LNKD), PepsiCo (PEP), Philip Morris International (PM), Rio Tinto (RIO), and Sirius XM Radio (SIRI).


Large cap tech: Mizuho has a new Neutral and $30 price objective on Dow member Hewlett-Packard (HPQ). A broad product portfolio and strong brand name is balanced by increased execution risks. Apple Inc (AAPL) is assigned a Buy and $635 target price, the broker viewing current earnings consensus as conservative since strong momentum in iPhone and iPad shipments is likely to drive estimates and shares even higher. They also expect management to initiate a dividend and start buying back its stock over the next year. Dell Inc (DELL) is also begun with a Buy ($20 target) as its increased emphasis on enterprise markets and the high-end consumer should help drive revenue growth beyond fiscal 2013.

Alaska Air (ALK): ALK is resumed with a Buy at Knight Research.

Dollar Tree (DLTR): JP Morgan establishes an Overweight on DLTR.

Lithia Motors (LAD): Stifel Nicolaus launches Buy rated coverage on LAD, setting a $30 price target on an outfit it says enjoys impressive market concentration in smaller areas of the western U.S.

Nash Finch (NAFC): Shares are a covered with a Buy at Cantor Fitzgerald.


Avid Technology (AVID): JP Morgan takes AVID to Overweight from Neutral.

CIT Group (CIT): Shares are moved to Overweight from Equal Weight at Morgan Stanley.

Calamos Asset Management (CLMS): CLMS is now Neutral from Underperform at Credit Suisse.

Celanese (CE): Jefferies juices its recommendation to Buy from Hold.

Elan (ELN): The stock gets a Neutral-from-Underperform boost by BNP Paribas.

Level 3 Communications (LVLT): Cowen lifts LVLT to Outperform from Neutral, sending shares up ahead of the opening bell.

Ingersoll-Rand (IR): IR is upgraded to Outperform from Market Perform with Wells Fargo.

Thoratec (THOR): Piper Jaffray takes THOR to Overweight from Neutral.

Walgreen (WAG): The equity is moved to Outperform from Neutral at Macquarie.


Cisco Systems (CSCO): The Dow (^DJI) component is downgraded to Neutral from Buy with a $22 target at ISI Group. Although earnings have consistently exceeded expectations over the past several quarters, the risk/reward profile is now roughly in balance at current levels.

3M Co (MMM): The Post-it and Scotch tape titan, another Blue Chip, is cut to Hold from Buy at Deutsche Bank.

Amgen (AMGN): The world's biggest biotech gets reduced to Perform from Outperform at Oppenheimer, which sees few clinical or regulatory catalysts in 2012, despite relatively strong sales of Prolia and Xgeva.

Boyd Gaming (BYD): The casino company is cut to Equal Weight from Overweight by Barclays.

CVS Caremark (CVS): Shares are now Neutral from Outperform at Macquarie.

Diamond Foods (DMND): The beleaguered snack food maker, currently attempting to acquire Pringles potato chips, is now Neutral from Buy at Suntrust.

DirecTV (DTV): DTV gets downgraded to Neutral from Outperform at Macquarie, which trims its target by $2 to $50 as comparisons become more difficult amid a highly promotional environment.

Elan (ELN): The Irish drug maker is now Neutral from Outperform at Credit Suisse.

iRobot (IRBT): The equity is lowered by both JP Morgan (Underweight from Neutral) and EarlyBirdCapital (Hold from Buy.)

Federated Investors (FII): Macquarie moves the stock to Underperform from Neutral.

A123 Systems (AONE): AONE is slashed to Sell from Hold with Wunderlich, sending the small cap stock sharply lower ahead of the open.

NVIDIA (NVDA): Shares are no longer on the Catalyst Driven Idea List at Sterne Agee as they are now trading above the firm's $16 target.

Joy Global (JOY): JOYG gets downgraded to Hold from Buy at Jefferies.

United Micro (UMC): The stock is now Neutral from Overweight at HSBC Securities due to a rich current valuation after its recent run up. (SOHU): The Chinese Internet search engine is lowered to Hold from Buy by Deutsche Bank.

TripAdvisor (TRIP): The Benchmark Company takes TRIP to Hold from Buy with a $31 objective after earnings revealed a surprisingly steep increase in expenses. Lazard also lowers the online travel outfit, to Neutral from Buy.

Wright Express (WXS): WXS is moved to Neutral from Buy at Janney Montgomery Scott.
No positions in stocks mentioned.
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