Upgrades & Downgrades: Cardinal in Good Health

A year after investors lost their shirts, a bank paid $132 million to outfit a soccer team. Modest gains helped many major markets hit fresh ‘09 highs; the ghosts of twelve months ago are obviously fading fast even as America mourns an otherworldly actor. The US Open ended a day late but, with $1.6 million awarded the upset winner, hardly a dollar short.

France plans to measure pleasure in its GDP, a decision doubtless met with rueful smiles from employees of Prozac manufacturer Eli Lilly (LLY) after it announced 5,500 job cuts. It was a good day for Goodyear (GT), up almost 3% on tire tariffs (see Goodyear News Trigger Knee-Jerk Reaction, and a 214% share price spike ensured Zoom (ZOOM) lived up to its name. The Produce Price Index highlights a busy day in economics and expect earnings out of Adobe (ADBE), Best Buy (BBY) and Kroger (KR). For more on Best Buy, see Six Reasons Best Buy Is a Retail Winner.
  
Initiations

Cruise Companies: Bank of America/Merrill Lynch reinstates coverage of cruise companies Carnival (CUK) and Royal Caribbean (RCL) with Buys on both and respective price objectives of $38 and $26.

Netflix (NFLX): Netflix is initiated with an Overweight ($53 target) at JP Morgan, which sees continued subscriber growth.

Corning (GLW): Goldman assumes coverage of Corning with a Neutral.

Cheesecake Factory (CAKE): Shares could slim down after being picked up at Jesup & Lamont with a Sell and $16 target on a belief EPS expectations are overly optimistic.

Upgrades

Yahoo (YHOO): Bernstein boosts Yahoo (Outperform from Market Perform) and increases its price objective $3 to $21. The broker believes Yahoo’s 40% investment in Alibaba is undervalued.

eBay (EBAY): The online auction site is upgraded to Buy from Neutral at UBS (target to $28 from $24). The sale of Skype eliminates an overhang. See also eBay's Run on the Luxury Market.

Cardinal Health (CAH): Goldman raises its Cardinal Health rating to Buy from Neutral as it expects fundamentals to stabilize.

CBS (CBS): Wells Fargo takes a shine to the "Tiffany Network," increasing CBS to Outperform from Market Perform.

Xerox (XRX): The stock is upgraded (Overweight from Equal Weight) by Barclays Capital. The objective also goes up $4 to $12 given the company’s cash generation capabilities.

Downgrades

Goodrich (GR): After a recent run-up in its stock Goodrich gets cut to Neutral from Buy at Bank of America/Merrill Lynch, though the target is bumped up by $7 to $60.

FLIR Systems (FLIR): Valuation is also a factor in JP Morgan’s downgrade of FLIR Systems (Neutral from Overweight).

Life Time Fitness (LTM): Gym giant Life Time Fitness is lowered at Piper Jaffray to Neutral from a somewhat ironic Overweight.