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Upgrades & Downgrades: Will Pepsi Sizzle or Fizzle?


Maybe the experts know something we don't know.


Stocks rose for a third straight session, though a late day fade left equities barely in the black and kept the Dow in the red for the year. Black and white and read ink all over was the New York Times (NYT), which slipped 1.45% after The Wall Street Journal announced it will soon start a Big Apple section. Barron's fared little better, another victim of the cover curse as its current front page pinup General Motors joined the recall rage on the day it fell below Ford (F) in auto sales for the first time in 50 years. Overall market volume -- which was once again anorexic -- failed to help weight loss leader NutriSystem (NTRI) as it slid 15.98%. The company blamed belt tightening on the part of consumers, an odd excuse for a diet darling.

It may soon find salvation in the unlikely form of arguably our skinniest ever president, who is off to an inauspicious start in his attempt to lick high cholesterol. And Americans may not receive Saturday mail for much longer, which could cause one mild mannered septuagenarian to go postal. Today in economics, the Institute for Supply Management's services index for February is out at 10:00 AM Eastern with the Fed's "Beige Book" due at 2:00PM. On the corporate front, earnings are expected from Big Lots (BIG), BJ's Wholesale (BJ), Canadian Solar (CSIQ), Costco (COST), Dillard's (DDS), DineEquity (DIN), Foot Locker (FL), Joy Global (JOYG), PetSmart (PETM), Take-Two Interactive (TTWO), and Yamana Gold (AUY).


PepsiCo (PEP): The beverage company gets picked up with a Buy at Goldman Sachs.

Transports: Goldman also starts the air freight and railroads/trucking sector. United Parcel Service (UPS) is added to Goldman's Americas Conviction Buy list and assigned a price objective of $76. New Neutrals are assigned on FedEx (FDX) ($95 target price), Union Pacific (UNP) ($80), Norfolk Southern (NSC) ($55), and Kansas City Southern (KSU) ($37). Elsewhere, CSX Corp (CSX) ($46) and CH Robinson Worldwide (CHRW) ($51) are Sells and JB Hunt Transport (JBHT) is a Neutral ($37 target). For a related story, see Turbulent Transports: Is Infrastructure a Good Investment?

Travel Stocks: Expedia (EXPE) is initiated with a Buy at ThinkEquity, which now also covers Orbitz Worldwide (OWW) and (PCLN) with Holds on each.

Amylin Pharmaceuticals (AMLN): The stock gets assigned a Buy ($26 target) at Jesup & Lamont, which says its financial prospects will improve with sales of BYETTA LAR and its partnership with Takeda Pharmaceuticals. See also Amylin's Other Drug to Watch.

Einstein Noah Restaurant Group (BAGL): Jefferies initiates Einstein Noah Restaurant Group (Buy; $14 target) as it expects the combination of traffic-driving coupon offers, increased advertising, and an heightened focus on the catering business to drive a return to positive same store sales by the end of 2010.

Jack in the Box (JACK): The broker is less upbeat on Jack in the Box (Hold; $24), believing a bigger focus on value-based offerings in the quick service sector and the concept's high relative exposure to unfavorable unemployment demographics will weigh on upcoming quarterly sales.


Schlumberger (SLB): The stock is upgraded to Positive from Neutral at Susquehanna Financial, which sets a target of $75.

Lincoln Electric (LECO): On the back of a positive 2010-2012 outlook for the global welding sector, Barrington Research boosts Lincoln Electric (Outperform from Market Perform with a price objective of $60).

Miners: RBC Capital raises Vale SA (VALE) and Freeport McMoRan (FCX), each now Outperform from Sector Perform.

U-Store It Trust (YSI): UBS increases U-Store It Trust to Buy from Neutral.

Parker Hannifin (PH): Goldman upgrades Parker Hannifin (Neutral from Sell).

France Telecom (FTE): Citigroup takes France Telecom to Hold from Sell.

Paychex (PAYX): Janney Montgomery moves Paychex to Neutral from Sell.

Blackstone Group (BX): Oppenheimer upgrades Blackstone Group to Outperform from Perform ($20.50 target) after its earnings exceeded estimates.

Charles River Laboratories (CRL): Morgan Stanley raises Charles River Laboratories to Equal Weight from Underweight and assigns an objective of $44.

Dana Holding (DAN): The stock is sharply higher ahead of the opening bell after getting added to the Conviction Buy list at Goldman.


AnnTaylor (ANN): The retailer gets a valuation based downgrade (Hold from Buy) at Jesup & Lamont, which notes the shares are up 38% since its upgrade on November 16th of '09.

Cameco Corp. (CCJ): Canada's Cameco is cut to Sector Perform from Outperform at RBC Capital.

Fresh Del Monte (FDP): The stock is lowered to Hold from Buy by BB&T Capital.

Southwest Water (SWWC): The stock gets a 180 degree (Sell from Buy) downgrade at Janney Montgomery Scott.

Netflix (NFLX): Saying that shares are trading at a full 26x/21x their 2010/2011 pro forma EPS estimates, Kaufman Brothers cut Netflix to Hold from Buy while maintaining its $69 target. Netflix is also cut at Susquehanna (Neutral from Positive) and Bank of America/Merrill Lynch (all the way to Underperform from Buy). For related content, see What Vudu Users Will Lose Under Walmart.

Staples (SPLS): The stock gets a Neutral-from-Buy downgrade at Goldman after yesterday's steep sell off.

JB Hunt Transport Services (JBHT): Bank of America/Merrill Lynch lowers JB Hunt Transport Services, now Neutral from Buy with the target price remaining at $36.

US Airways (LLC): The stock is downgraded to Hold from Buy at Jesup & Lamont as its shares have exceeded the firm's $7 price target.

No positions in stocks mentioned.
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