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Upgrades & Downgrades: Spirit Aerosystems Set To Soar, Children's Place Gets Grounded


Wall Street ratings agencies set the tone for today's stock market.

The S&P 500 Index slid 2.83% to snap a two-week winning streak amid investor disappointment over a lack of further quantitative easing from the Fed and ever increasing doubts over how a European debt deal will hold up. Italian clothing company Benetton recently ran ads showing Sarkozy and Merkel in a passionate embrace but alas, where our kissing continental cousins are concerned, the reality remains far more tame. Certainly, the singularly misnamed Best Buy (BBY) - which sponsors its own pucker picture - could itself use some mouth-to-mouth resuscitation after shareholder selling sent the stock tumbling 18% on an earnings miss. Goldman Sachs (GS), which does "God's work", fell 11.2% and Occupy Wall Street, out of work but with ample Time on its hands, fell out with the church. In an imploding energy sector, coal outfit Alpha Natural Resources (ANR) slid 16%, suggesting Santa should think twice before stuffing the fossil fuel in our stocking on Sunday. Assuming of course he can still squeeze down the chimney - no sure thing after fast food king McDonald's (MCD), which feeds its cows grass, plumped up to an all time high on Tuesday.

Meanwhile North Korea, which feeds its citizens grass, lost its "Dear Leader" late last week. Say what you want about capitalism, just don't dare say the grass is greener on the communist side of the border. Some say Hemingway, author of The Sun Also Rises, can make you a better investor. But the sun also falls, as evidenced in First Solar's (FSLR) S&P 500-leading 30.37% loss on the week. BioSante Pharmaceuticals (BPAX) plunged 81.8% on a failed study into women's libido. Us men are of course much more simple creatures, one reason why Viagra maker Pfizer (PFE) rose 2.29% to top the Dow (^DJI). The barefoot bandit was sent to the slammer for seven years and the barefoot diva sadly shuffled off her mortal coil. Just in time to miss the brutal bear market in Deckers Outdoor (DECK), with the maker of Ugg boots and Teva sandals tumbling 14.3%. Who will kick the can now? Today's earnings are expected to include Park Electrochemical (PKE), Piedmont Natural Gas (PNY), Red Hat (RHT), and Shiloh Industries (SHLO).


Madison Square Garden (MSG): The storied arena is a new Buy at Needham, which has a $37 price target on a company with coveted assets. This year Forbes magazine named the Knicks as the number one most valuable National Basketball Association franchise, worth $655 million, while ice hockey's New York Rangers are the second wealthiest National Hockey League outfit, worth $507 million.

MakeMyTrip (MMYT): Saying India's travel and tourism industry is forecasted to grow at a 10% CAGR (Compound Annual Growth Rate) through 2020 - the world's second fastest rate - brokerage Collins Stewart begins Buy rated coverage and assigns a $32 price objective.

Groupon (GRPN): Barrington Research rolls out Outperform rated coverage on the recent coupon-clipping Internet IPO, and establishes a price objective of $30. Catalysts include first mover advantage, global leadership, and brand recognition. By contrast, Stifel Nicolaus has a less bullish Hold amid concerns a current $15 billion valuation already discounts several years of hyper growth and margin expansion, which may not materialize as expected. For related content, see Facebook Financials Leaked: Could They Hurt the Zynga IPO?

Nestlé: Shares of the confectionery company are trading higher in Europe this morning after being named a new Neutral at Credit Suisse, which takes its target price up to 58 francs from 55. The stock trades at 15.8 times estimated 2012 earnings, which the analyst says is a "modest" and "fully justified" premium to peers.

Vail Resorts (MTN): Credit Suisse assigns an Outperform on the ski stock.

Gen-Probe (GPRO): GPRO gets begun with a Buy at Deutsche Bank.

ViroPharma (VPHM): Goldman Sachs starts the shares at Neutral.

Tortoise North American Energy (TYN): TYN is launched with a Buy at Bank of America-Merrill Lynch.

Oil & Gas companies: Bill Barrett Corp (BBG) and Continental Resources (CLR) are both begun with Buys at Dahlman Rose, which sets respective price objectives of $42 and $75.


Spirit Aerosystems (SPR): Shares are now Outperform from Neutral at Credit Suisse.

Bayerische Motoren Werke Aktiengesellschaft: The German car giant, better known as BMW Group, gets upgraded to Add from Neutral at WestLB.

BMC Software (BMC): The stock gets a Neutral-from-Underweight boost by JP Morgan.

Cablevision (CVC): CVC, which imploded 8.47% to a new low on Friday, is added to Citigroup's Top Picks Live list this morning. Shares are trading sharply higher in the pre-market as a result. See also Interview: What to Expect From Media Stocks in 2012.

Coca-Cola FEMSA (KOF): Morgan Stanley increases KOF to Overweight from Equal Weight.

United Natural Foods (UNFI): Shares get a Buy-from-Hold hoist at Canaccord Genuity.

United Rentals (URI): RBC Capital raises its rating to Top Pick from Outperform.

Lazard (LAZ): Credit Suisse lifts LAZ to Outperform from Neutral.

Mercer International (MERC): The paper products powerhouse is moved Outperform from Market Perform at Raymond James.

Patterson-UTI (PTEN): Barclays boosts the energy outfit to Overweight from Equal Weight.

Vertex Pharmaceuticals (VRTX): RBC Capital raises its recommendation to Top Pick from Sector Perform.

WNS Holdings (WNS): The business outsourcing outfit is upgraded to Outperform from Neutral at Robert W. Baird, which increases its price objective by $1 to $13. After a recent meeting with company management in India, the broker believes WNS is poised to reap upside earnings benefits from accelerating booking trends.


Children's Place (PLCE): The stock is now Neutral from Buy at Sterne Agee.

LeapFrog (LF): Tough day for kids. The educational outfit, which counts Mike Milken as an investor, is lowered to Hold from Buy at Stifel Nicolaus on account of its steep valuation.

Diamond Offshore (DO): The oil company gets an Underweight-from-Equal Weight downgrade at Barclays.

Telefónica (TEF): HSBC Securities reduces the Spanish telecom titan to Neutral from Overweight, taking its price objective down to €14.80 from €16.50. Though a 10% dividend for 2012 is undeniably attractive, the broker believes this yield is "not immune from incremental macro and credit shocks."

RSC Holdings (RRR): RRR is reduced to Neutral from Outperform at Credit Suisse, since shares are no longer trading on fundamentals following its acquisition by United Rentals (URI).

Pinnacle West (PNW): Credit Suisse cuts shares to Neutral from Outperform.

Suez Environnement (SZEVY): The French firm gets downgraded to Neutral from Outperform at Credit Suisse.

General Growth Properties (GGP): Credit Suisse, which has been busy this morning, reduces its recommendation on the REIT to Neutral from Outperform

Calix Networks (CALX): The small cap stock is moved to Underweight from Equal Weight at Morgan Stanley, sending shares lower ahead of the opening bell.

HEICO (HEI): Auriga takes the industrial outfit to Hold from Buy.

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