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Upgrades & Downgrades: Monsanto in the Money


Maybe the experts know something we don't know.

If Friday afternoon's u-turn saw stocks do a 180, then the market's Manic Monday brought back the 1980's. In the words of Nena's cold war classic, 9908.39 Red Balloons went by as flagging financials sent the Dow to its first finish below 10,000 in three months. (Next thing you know, they'll be remaking 'We Are The World.') An upturned palm caused Palin pain and Palm's (PALM) 5.20% downturn left investors low.

Still, even on a day of Chicken Littles lots of stocks scored good gains. Not least poultry producer Tyson Foods (TSN), whose 3.00% surge capped a commendable 24 hours for our feathered friends. A day after The Who's halftime harmonies inspired the Who Dats to gridiron glory, DR Horton (DHI) heard a woo-hoo after the homebuilder headed 1.97% higher. And the Super Bowl effect (or an upgrade) helped send shares of Harry Winston Diamond (HWD) up 0.64% on an otherwise dire day. No top tier economic announcements are out but Biogen Idec (BIIB), Coca-Cola (KO), Coventry Health Care (CVH), EOG Resources (EOG), Martin Marietta Materials (MLM), Molson Coors (TAP), UBS (UBS), Walt Disney (DIS), and Warner Music (WMG) all report results.


Time Warner (TWX): Needham initiates Time Warner with a Hold.

Fossil (FOSL): Barclays begins Fossil at an Equal-Weight and establishes a price objective of $35.

Susquehanna Bancshares (SUSQ): Barclays has been busy, also initiating Susquehanna Bancshares (Equal-Weight with a $9 price target).

Delhaize Group (DEG): Morgan Stanley starts Delhaize Group at Overweight.

Hanesbrands (HBI): The stock is initiated at a Buy ($27 price objective) with Sterne Agee, which says the company has the potential to grow operating margins by roughly 100 basis points per annum for the next 3-4 years even with anemic revenue growth.


Monsanto (MON): Saying it "is well positioned to reinvigorate share growth in US corn seed", Bank of America/Merrill Lynch lifts Monsanto to Buy from Neutral and takes its target up $2 to $96.

Industrial Stocks: An upgrade of the global industrial sector sees Morgan Stanley raise ratings on Caterpillar (CAT) (Overweight from Underweight; $70 target), Rockwell Automation (ROK) and Ingersoll-Rand (IR) (each now Equal-Weight from Underweight).

Verizon (VZ): Sanford Bernstein boosts Verizon to Market Perform from Underperform.

PetSmart (PETM): The stock is now Outperform from Neutral at Credit Suisse.

Louisiana-Pacific (LPX): Goldman removes Louisiana-Pacific from its Conviction Sell list.

Royal Dutch Shell (RDS-B): HSBC hoists Royal Dutch Shell (Overweight from Underweight) since cost cutting, seasonally higher gas demand, and a modest recovery in European and Asian refining margins should help the stock's FY10 results after an unimpressive fourth quarter. For related content, see Oil Prices Fall Sharply as General Market Sells Off.

SAP AG (SAP): The stock gets a valuation-based Market Perform from Underperform upgrade at FBR Capital, which keeps its $44 target.

Lamar Advertising (LAMR): Lamar is now Outperform (from Market Perform) with Wells Fargo.

BioMarin Pharmaceuticals (BMRN): Roth Capital raises its BioMarin Pharmaceutical recommendation to Buy from Hold with a $23 target, saying that its development pipeline should be viewed as a free call option. For more on this sector, see Cell Therapeutics Sours as it Seeks FDA Approval.

CarMax (KMX): The stock is upgraded to Neutral from Underperform at Credit Suisse, which also increases its price objective to $23 from $15. The broker believes used car sales will be higher than what consensus is expecting.

United Parcel Service (UPS): UPS is upgraded to Buy from Hold at Argus which establishes a price objective of $70. While the first quarter is likely to be challenging, it expects volume and earnings to accelerate over the remainder of the year as UPS emerges from the recession a leaner, more focused, and better positioned company.

CSX Corp (CSX): The stock is now Buy from Hold with a $51 target at Stifel Nicolaus, which cites continuing pricing strength in the carload market and the relatively low near-term likelihood of debilitating economic re-regulation being passed by Congress.

Brinker International (EAT): Brinker is now Buy from Neutral with a $20 target at SunTrust Robinson Humphrey, which says the company has essentially eliminated any refinancing concerns by aggressively repaying its term loan.

Vodafone (VOD): European telecom titan Vodafone gets an Overweight-from-Equal Weight boost by Barclays Capital.


Air Products & Chemical (APD): APD is cut to Hold from Buy by Citigroup.

Chinese Oil Stocks: China Petroleum & Chemical (SNP) (Neutral from Buy) and PetroChina (PTR) (Sell from Neutral) each get downgraded at Goldman Sachs. See also Why PetroChina Reveals China's Global Emergence.

Kennametal (KMT): Goldman is also adding Kennametal to its Conviction Sell list.

Electronic Arts (ERTS): Not a pretty picture for Electronic Arts, now Hold from Buy at Needham after earnings. Given the growth implicit in its current estimates, the broker no longer see enough upside in the shares over the next year to warrant recommending purchase.

GameStop (GME): The stock gets a Neutral-from-Outperform cut at Credit Suisse, which lowers its price objective to $25 from $28. Negatives include continued aggressive pricing from Walmart (WMT), Amazon (AMZN), and others allied to signs that digital downloading is gaining more traction.

National Bank of Greece (NBG): NBG gets downgraded to Sell from Neutral at Goldman Sachs.
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