Stock Upgrades: AT&T Dials Back 1984 in Monopoly Merger
Wall Street ratings agencies set the tone for today's stock market.
As Simon & Garfunkel so sagely sung, "And after changes upon changes, we are more or less the same." On January 1, 1984, longtime regulated monopoly AT&T Inc. (NYSE:T) was broken up. Fast-forward three decades, and today the heirs of Ma Bell are putting together a pay-TV monopoly by buying DirecTV (NASDAQ:DTV) in a $48.5 billion stock-and-cash deal. As invariably happens, stock in the acquirer is falling on the news, even as shares of the company being bought show strength.
Survivors of the Titanic tragedy all recalled an eerily calm sea, still as a pond, in the hours before calamity struck. Exactly one hundred years ago, Europe frolicked in a carefree summer, unaware that "the guns of August" would soon sweep away a continent's illusions. Suddenly, Wall Street is offering us a similarly deceptive sanguine appearance. Last week the S&P 500 (INDEXSP:.INX) barely budged in ending off an infinitesimal 0.03%, or under one point. Yet Goliaths named David have begun to betray a steadily building sense of foreboding. Not that the week was without good gainers. Dry-eye titan TearLab (NASDAQ:TEAR) surged 20.91%, even as Allergan (NYSE:AGN) -- whose Botox was initially approved to treat excessive eye-blinking -- rejected a buyout bid and Yahoo (NASDAQ:YHOO) bought Blink. Last year, the sport of wrestling united the world's strangest bedfellows of the US, Russia, and Iran. Last week, World Wrestling Entertainment (NASDAQ:WWE) had investors similarly singing from the same hymn sheet, sending its shunned stock slumping 35%.
There aren't any top-tier economic reports due today, but Campbell Soup (NYSE:CPB), Hertz (NYSE:HTZ), Urban Outfitters (NASDAQ:URBN), and Valspar (NYSE:VAL) are all due to release quarterly earnings.
Now let's analyze this morning's upgrades, a group encompassing not only our aforementioned AT&T Inc. but also a beleaguered watchmaker.
Abbott Labs (NYSE:ABT): Shares are now Outperform from Neutral at Credit Suisse, which also increases its price objective to $46 from $44.
AT&T Inc.: Raymond James raises its recommendation to Outperform from Market Perform.
Bank of Ireland (NYSE:IRE): IRE is increased to Buy from Neutral at UBS.
Beacon Roofing Supply (NASDAQ:BECN): Longbow lifts its investment assessment to Buy from Neutral.
Brookdale Senior Living (NYSE:BKD): BKD gets boosted to Top Pick from an already-upbeat Outperform at RBC Capital amid a demographic boost by driven by increasingly arthritic baby boomers. Its target price, previously $38, increases to $42.
Energy XXI (NASDAQ:EXXI): Shares get upgraded to Strong Buy from Outperform at Raymond James.
Fossil (NASDAQ:FOSL): The stock, which slumped an S&P 500-worst 7.8% last week, is hoisted to Hold from Sell by Brean Capital on account of a subsequently compelling valuation.
Fulton Financial (NASDAQ:FULT): Keefe Bruyette boosts the stock to Outperform from Perform.
Gogo Inc. (NASDAQ:GOGO): Gogo gets upgraded to Buy from Neutral at UBS.
Reynolds American (NYSE:RAI): RAI is raised to Outperform from Market Perform with Wells Fargo.
Texas Instruments (NASDAQ:TXN): RBC Capital taxes semiconductor stock TXN to Outperform from Perform.
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