Upgrades & Downgrades: Cisco Sees Road to Riches

The Dow posted its third gain in four weeks while Nasdaq hit its highest level since August of ‘08 after Larry Summers’ nuclear winter fears for February unemployment failed to materialize. Investors learned to listen to their elders, with Sunrise Senior Living (SRZ) surging 28.8% as Gordon Gekko graced the cover of AARP Magazine. Youth was also served as 9 year olds navigated the nation’s air traffic, causing a 59 year old pilot to call it a day safe in the knowledge his employer’s stock is up over 215% since that rendezvous with the river.

“Women and children first” was found to be less widespread in the time of the Titanic than previously believed, but with Dress Barn (DBRN) and Children’s Place (PLCE) both reaching fresh 52-week highs it’s still a smart stock picking strategy. We have a slow start to the week in economics but earnings are expected out of Athenahealth (ATHN), Enzo Biochem (ENZ), H&R Block (HRB), Jones Soda (JSDA), Princeton Review (REVU), Seaspan Corp (SSW), Six Flags, Stanley Works (SWK), and TiVo (TIVO).

Initiations

Cisco Systems (CSCO): The tech stock is resumed with an Overweight from Neutral at JP Morgan after a change in analysts. The year-end price objective is $28.

Wilmington Trust (WL): The stock is initiated with a Market Perform by Keefe Bruyette.

Progress Energy (PGN): Citigroup starts Progress Energy at Hold.

TreeHouse Foods (THS): Bank of America/Merrill Lynch begins TreeHouse Foods at a Buy.

GameStop (GME): Broadpoint picks up coverage of GameStop with a Buy and assigns a target of $21 as it believes that publishers' initial industry growth estimates will prove conservative.

Upgrades

Yahoo (YHOO): The stock is upgraded to Outperform from Market Perform at JMP Securities, which sets a $21 target price.

Research in Motion (RIMM): BMO Capital raises its Research in Motion rating to Outperform from Market Perform and increases its price objective by $18 to $88. The broker expects RIMM to meaningfully beat earnings estimates when the company reports on March 31st.

US Steel (X): The stock gets a Buy-from-Neutral upgrade at Goldman Sachs.

Macy’s (M): Soleil Securities takes Macy’s to Buy from Hold with a $28 target. See also Retail Still Miles Away From Road to Recovery.

Sempra Energy (SRE): Barclays boosts Sempra Energy to Overweight from Equal-Weight and takes its target up $1 to $57.

Canadian Natural Resources (CNQ): The stock gets a Buy-from-Hold increase at Canaccord Adams.

Potash Corp (POT): Noting that there are indications both distributors and growers are reverting back to their traditional buying habits, Morgan Joseph moves Potash Corp to Buy from Hold with a $130 price target.

Steel Dynamics (STLD): The stock is increased to Buy from Hold ($23 target) at KeyBanc Capital, which cites a marked improvement in scrap processing operations.

PNC Bank (PNC): The banking stock gets an Outperform-from-Market Perform increase at FBR Capital.

Pride International (PDE): The stock is added to the Focus List at MKM Partners.

Career Education (CECO): RBC Capital raises its recommendation on Career Education (Outperform from Sector Perform; $35 target), saying the shares are now its best mid-cap value idea due to strong prospects for meaningful earnings growth.

Downgrades

Veolia Environment (VE): Seeing more limited potential short-term outperformance, Bank of America/Merrill Lynch lowers Veolia Environnement, now Neutral from Buy.

Perrigo (PRGO): Bank of America/Merrill also cuts Perrigo to Neutral from Buy.

MicroStrategy (MSTR): First Analysis moves MicroStrategy to Equal Weight from Overweight.

ONEOK Inc. (OKE): The stock is downgraded to Market Perform from Outperform with Wells Fargo.

AK Steel (AKS): Goldman reduces its rating on AK Steel, now Neutral from Buy.

Palm Inc (PALM): The mobile device maker is downgraded to Underperform from Neutral at Macquarie, which also lowers its target to $4 from $10.

Fifth Third Bancorp (FITB): Valuation is a factor behind Fifth Third Bancorp’s Market Perform-from-Outperform cut a FBR Capital. See also Measuring Stress in the Banking System.

RCN Corp (RCNI): Morgan Joseph moves RCN Corp to Hold from Buy following Friday's announcement that private equity firm ABRY Partners agreed to acquire the cable company for $15 per share, a 22% premium to Thursday's closing price.