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Upgrades & Downgrades: Best Buy Is One of the Best


Maybe the experts know something we don't know.

Despite stutter step trading so lackluster it again sent investors to sleep, the Dow Average is now up eight straight. Certainly Somaxon Pharmaceuticals (SOMX) shareholders are too busy counting money to count sheep after gaining 133.76% to pace Nasdaq advancers on the approval of its insomnia product. Equities were boosted by a flat reading for February's Consumer Price Index, experts informing us this means inflation is absent. (Those with kids in college look away now.) Ahead of Monday's earnings release, Tiffany (TIF) rose 0.83% to a fresh 52-week peak with some speculating it is about to unveil digestible doggy diamonds.

Up 2.52%, watchmaker Movado regained some lost time after tumbling over 20% in two days but any attempts to recoup lost productivity is a lost cause this time of year. And Dow transports are on their best run in 18 years, boosted by a 3.12% increase in Memphis based FedEx (FDX) as its third quarter earnings climbed 146%. That its planes are delivering more parcels than ever is a fitting requiem for Memphis' own Alex Chilton, who but a day earlier bought his last "ticket for an aeroplane" after receiving a Letter. No major economic data is due today but quadruple witching Fridays are seldom dull. On the corporate front earnings are expected out of Eldorado Gold (EGO) and Perry Ellis International (PERY).


Logistics Stocks: CH Robinson (CHRW) and Expeditors International (EXPD) are initiated with Outperforms at Macquarie, the latter with a $44.50 price target, while JB Hunt (JBHT) and Con-way (CNW) are new Neutrals.

Boardwalk Pipeline Partners (BWP): The stock is picked up at Overweight with JP Morgan, which assigns a price objective of $31.

Pacific Sunwear (PSUN): Keybanc starts Pacific Sunwear with a Hold. While the broker likes where the company is heading strategically, its turnaround is in its early stages and near term visibility is clouded.

Office Supply Stocks: BB&T begins both Office Max (OMX) and Office Depot (ODP) with Holds and has a Buy on Staples (SPLS).

Bed Bath & Beyond (BBBY): Sterne Agee starts Bed Bath & Beyond at Neutral.

Research In Motion (RIMM): The smartphone maker is resumed with a Buy at Wunderlich ($96 target), which expects improving industry recognition. See also What to Watch for as Research In Motion Breaks Out.

Walgreen (WAG): The stock is initiated at Above Average and assigned a $40 target at Caris & Company, which says the drugstore operator is in the midst of a strategic overhaul that should reduce store growth and expenses. There is some short-term EPS risk however, so the broker would be buyers of the stock only after next Tuesday's earnings announcement. CVS Caremark (CVS) meanwhile is assigned an Average rating and $36 objective.


Best Buy (BBY): The electronics retailer gets a Buy-from-Neutral boost by Goldman Sachs.

Hotel Stocks: Societe Generale upgrades Choice Hotels (CHH) to Hold from Sell and moves Marriott (MAR) all the way up to Buy from Sell.

Energy Transfer Equity (ETE): Deutsche Bank boosts Energy Transfer Equity to Buy from Hold.

Progressive (PGR): Bank of America/Merrill Lynch raises Progressive, now Neutral from Underperform.


Palm Inc (PALM): 'Sell' is the four letter word which doesn't often speak its name among Wall Street analysts, but poor Palm Inc is cut to Sell from Hold by both Kaufman Brothers ($3 target) and at Morgan Joseph, which sets a scarcely believable objective of $0. See also Six Things to Ponder About Palm.

Synaptics (SYNA): Citing channel checks suggesting its mobile business continues to struggle with share loss and ASP erosion, Oppenheimer slashes Synaptics to Perform from Outperform.

DirecTV (DTV): Citigroup cuts DirecTV, now Hold from Buy.

Intercontinental Hotels (IHG): The stock gets a 180 degree (Sell from Buy) downgrade at Societe Generale.

Weatherford International (WFT): Jefferies reduces its rating on Weatherford International to Hold from Buy and takes its target to $19 from $22 due to concerns about the size of the pending FCPA settlement, weak recent free cash flow and worries over short-term earnings performance.

F5 Networks (FFIV): The stock is now Neutral from Buy at Bank of America/Merrill Lynch.

Humana (HUM): Having exceeded its old price target of $46, Argus cuts Humana Hold from Buy. Negatives include a potential loss of the TRICARE contract and probable changes in Medicare funding.
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