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Stock Downgrades: Elan Losing Its Panache


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

"Now is the winter of our discontent"? With all due respect to a recently identified Richard III, not so much. Certainly investors in Activision-Blizzard (ATVI), which rode a ratings increase on a day of sleet and snow to gain 15% on the week, won't be complaining about the current climate. And fleeing the cold by escaping to Aruba (ARUN) was awful advice, after the networking name slumped 6.5%.

The S&P 500 Index (^GSPC) is now up for the first six weeks of the year, something that hasn't happened since 1971. Dell Inc (DELL) was bought out for $24.4 billion but ended the week exactly unchanged. As Paul Simon sang in "The Boxer," "After changes upon changes, things are more or less the same." Mr. Simon, were he not currently laid low by flu, would surely also add "What's that you say, CH Robinson (CHRW)" after that stock slid on an earnings miss.

Prison stock Corrections Corp. (CXW) fell 6.43% on Friday alone but, as the saying goes, "a change is as good as arrest." (Sorry, "a rest.") At least it was for BlackBerry (BBRY), which jumped 26.7% in its first week following its name change from Research in Motion.

No top-tier economic data due today, but quarterly earnings announcements are expected out of American Capital (ACAS), American Financial Group (AFG), Annie's (BNNY), CNA Financial (CNA), Lions Gate Entertainment (LGF), Loews Corp (L), L'Oréal (PINK:LRLCY), Masco (MAS), Nielsen (NLSN), Owens & Minor (OMI), Radian Group (RDN), and TW Telecom (TWTC).

Alnylam Pharmaceuticals (ALNY): Shares are now Hold from Buy at MLV & Co, whose new price objective is $27.50 from $20. The rating has been reset pending details of disease-modifying data from the company's lead partnered programs.

Amgen (AMGN): The world's biggest biotech is moved to Market Perform from Outperform with William Blair, which notes a relative lack of upcoming catalysts after a sustained spell of share-price strength.

Baker Hughes (BHI): Dahlman Rose downgrades the oil services outfit to Hold from Buy.

Charles Schwab (SCHW): Citigroup clashes the stock to Sell from Neutral, its issues including a lack of operating leverage. The price target is also trimmed, to $14 from $15. Shares are consequently tumbling $2.25 in today's pre-market trading.

Elan (NYSE:ELN) The Irish drugmaker, a onetime high flier whose shares have tumbled 25.44% in the past 12 months, is now Neutral from Buy at UBS due to a lack of visibility after announcing it is divesting a 50% stake in Tysabri to Biogen Idec (BIIB). The price target is also lowered, to $10.06.

Fossil (FOSL): Benchmark Company cuts the watchmaker to Hold from Buy with an intact target price of $105 ahead of tomorrow's earnings announcement, which the broker believes will be no better than in-line.

Kimberly-Clark (KMB): The Kleenex maker, recently trading at fresh highs, gets cut to Underweight from Equal Weight at Barclays.

LinkedIn (LNKD): The surging professional networking stock, which finished Friday up 21.27% atop all time highs, is moved to Market Perform from Outperform at Northland Capital this morning. Valuation is cited, as it is now above the brokerage's $145 target price.

Power Integrations (POWI): Deutsche Bank downgrades the equity to Hold from Buy.

Primerica (PRI): The company gets cut to Perform from Outperform by Keefe Bruyette.

Spirit AeroSystems (SPR): Stifel Nicolaus slashes the stock to Hold from Buy due to valuation concerns.

Sprint Nextel (S): The telecom name is now Neutral from Overweight at Atlantic Equities, which is troubled by an acceleration in investment and concurrent lack of earnings visibility.

Volvo (PINK:VOLVY) Société Générale gives the Swedish car company its second downgrade of recent days, today taking it to Hold from Buy.

(See also: New Stock Coverage: Cosi Set to Make Some Serious Bread? and Stock Upgrades: Nike Has New Spring in Its Step.)
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