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Upgrades & Downgrades: Brunswick About to Bowl Investors Over?


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

A year to the day before the end of time, stocks merely marked time, with the Dow Average (^DJI) recovering from an early swoon to end essentially unchanged while the S&P 500 Index edged up all of 0.19% amid predictably anemic trading activity. If only the Mayan empire accurately predicted the end of Oracle (ORCL), the software stock slumping 11.66% on seven times average volume. (And if only Oracle had consulted Delphi Financial (DFG), whose surge of 73.02% topped the entire NYSE.) One fears the erstwhile tech titan is about to learn the hard way that hell hath no fury like a shareholder scorned. The renewed prospect of a Kim dynasty that threatens to go on "for years" caused the world to recoil in horror and drove millions to drink, sending shares of winemaker Constellation Brands (STZ) surging 4.45% in a flat market. The dynasty in question, it should be noted, is this one, not that one, although the late North Korean dictator was evidently quite the oenophile. The dictatorial California clan taught Nike (NKE) everything it needed to know about sweatshops of course, thus it must be pleased to see the athletic apparel outfit advance 2.91% after reporting a strong fiscal Q2.

On the year's darkest day, a bankrupt solar stock won a court battle, and on the first full day of the Festival of Lights, lighting stock SemiLEDs (LEDS) rose 13.50%. Restroom supplies provider Cintas (CTAS) topped the entire S&P 500 Index with a 9.30% increase, and Starbucks (SBUX), apparently no fan of public restrooms, hit another all-time high. Elsewhere Einstein Noah Restaurant Group (BAGL) gained 4.21% but a company named after Albert's most famous computation fared far less well, EMC Corp (EMC) falling 4.06%. And the potshots between Paris and London really are abating; British bank Lloyds (LYG) saw its shares lifted 4.86% by an extremely unusual 180 degree upgrade at France's own BNP Paribas. Today in economics, at 9:55 a.m. Eastern we get the University of Michigan's final figure for December consumer confidence, with November Leading Indicators following five minutes later. On the earnings front, American Greetings (AM), CalAmp (CAMP), Christopher & Banks (CBK), CPI Corp (CPY), and Neogen (NEOG) are all due to report results.


Brunswick (BC): The maker of bowling balls and much else is resumed with an Outperform rating and $25 target price at Robert W. Baird. Most end markets have bottomed and dealer inventory is fresh.

Hanesbrands (HBI): Shares of the underwear outfit are assigned a Neutral at Goldman Sachs.

Applied Micro Circuits Corp (AMCC): BMO Capital begins Outperform rated coverage and establishes an $11 price objective.

Elster (ELT): The stock is a fresh Buy with Wunderlich, which sets an $18 price target on an outfit it notes is among the world's largest providers of gas, electricity, and water meters.

ViroPharma (VPHM): Brean Murray begins with a Buy and establishes a price objective of $37 mainly due to the strength of its orphan drug, Cinryze.

Data storage stocks: VMware (VMW): The stock, upgraded elsewhere today, is initiated with a Neutral at Ticonderoga. Although powerful trends toward virtualization and cloud computing are expected to continue benefiting the company, competition is also likely to increase over the next 12-18 months and become a growing concern among investors. NetApp (NTAP) is also a new Neutral amid its high exposure to public spending. Ticonderoga takes a more bullish stance on EMC Corp (EMC), beginning Buy rated coverage and rolling out a $27 price target on an outfit it expects to benefit from the explosion of digital information and resultant need for storage solutions.

Tech stocks: Echelon (ELON) and Itron (ITRI) are each picked up with Neutrals at Piper Jaffray, which begins Overweights on both Elster (ELT) and Digi International (DGII).


Advance Auto Parts (AAP): BB&T Capital boosts AAP to Buy from Hold.

CME Group (CME): The exchange operator is upgraded to Outperform from Neutral at Macquarie.

Potash Corp of Saskatchewan (POT): RBC Capital raises its recommendation to Outperform from Sector Perform on account of an increasingly attractive valuation. Accordingly, the price target is also increased by $8 to $58.

Micron (MU): MU is moved to Outperform from Neutral with Wedbush.

Juniper Networks (JNPR): The networking name is trading higher ahead of the open after being upgraded to Outperform from Market Perform at BMO Capital amid an expected improvement in capital expenditures for the first half of 2012. The price target is taken up by $3, to $25. Also see Juniper Searches for a Bottom.

TIBCO Software (TIBX): Shares are increased to Buy from Neutral at Mizuho after earnings.

VMware: The tech firm is hoisted to Buy from Hold with Wunderlich, which sets a $95 price target. The brokerage believes the pullback in sympathy with Oracle (ORCL) results has created a compelling opportunity for longer-term oriented investors. For related content, see Oracle Earnings: Did Warren Buffett Top-Tick Tech?

WABCO Holdings (WBC): JP Morgan gives an Overweight-from-Neutral increase to WBC.

Zimmer Holdings (ZMH): Shares get a Buy-from-Neutral boost at Mizuho, which takes its target up to $62 from $53. Catalysts include potentially improving growth in orthopedic markets and a strengthening knee product cycle at the company.


Boston Scientific (BSX): The medical device maker is moved Neutral from Buy at Mizuhom which takes its target to $5.40 from $7. Among its concerns is a belief that 2012 consensus earnings estimates are too high and the fact that the medical device tax will hit it harder than peers in 2013.

Vivus (VVUS): Shares of the experimental weight-loss pill maker, already trading lower this morning, and reduced to Neutral from Buy at Roth Capital.

CBOE Holdings (CBOE): Shares are now Neutral from Outperform at Macquarie.

KB Home (KBH): KBH is cut to Hold from Buy at Stifel Nicolaus, which does not see a real estate recovery occurring quickly enough to stay in the stock.

Manhattan Associates (MANH): Benchmark Company moves MANH to Hold from Buy mainly due to valuation concerns.

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