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Stock Upgrades: Hillshire Brands Shows Nobody Doesn't Like Sara Lee


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

Sara Lee owner Hillshire Brands (NYSE:HSH) yesterday agreed to acquire Pinnacle Foods (NYSE:PF) for $4.3 billion. The deal, which is an 18% premium to Pinnacle's Friday close, combines the former's Ball Park and Jimmy Dean brands with the latter's Aunt Jemima and Duncan Hines. Analysts are all over the map on Hillshire's prospects this morning, with JPMorgan (NYSE:JPM) reducing its rating even as Sanford Bernstein reiterates its bullish "buy" recommendation. Wells Fargo is in the optimistic camp, increasing its investment assessment on an expectation of both merger synergies and a broader product portfolio.
With an infamous intern in the news again, I'm reminded of a line by the late, great Barton Biggs. When the salacious scandal broke in early 1998, Morgan Stanley's (NYSE:MS) legendary strategist pined for the more innocent age of Ronald Reagan, "back in the good old days of the early 1980s, when the bull market was young and sleeping with the president meant attending a Cabinet meeting." Admittedly, RadioShack (NYSE:RSH) -- which memorably dialed back that era not long ago -- was a standout stock on Monday with a 4.51% advance. Otherwise, however, there was no need to yearn for sepia-toned memories of the go-go Gordon Gekko era -- not when such 21st-century icons as, well, Gogo Inc. (NASDAQ:GOGO) and Twitter (NYSE:TWTR) inspired both the Dow Jones Industrial Average (INDEXDJX:.DJI) and S&P 500 Index (INDEXSP:.INX) to historic highs of their own. The former jumped 6.20%, while the latter gained 5.90% on a broker boost. L'affaire Lewinsky occurred in a year when America posted its first federal budget surplus in almost three decades, and yesterday Mr. Market gave us a tiny echo of those distant days. All similarities end there, of course, as that year's boom was temporarily curtailed by the sort of financial calamity in Russia that we all know can't occur again. Yesterday's ebullience wasn't confined to these shores. European stocks surged to a six-year peak; perhaps that bearded drag lady was speaking for the continent's economic recovery when winning this weekend's Eurovision Song Contest with "Rise Like a Phoenix." Moving from Wurst to bratwurst, Jimmy Dean frankfurter owner Hillshire Brands bought Pinnacle Foods for that aforementioned $4.3 billion to create a Polish kielbasa powerhouse. Bombay-based Tata Motors (NYSE:TTM) moved up 5.44% as the subcontinent's stocks rose to record numbers. India's own International Business Machines (NYSE:IBM) predictably enjoyed a halo effect in increasing 1.31%.
Today in economics, March business inventories are expected to expand from February's pace at 10:00 a.m. EDT. On the earnings front, expect announcements out of Abercrombie & Fitch (NYSE:ANF), Fossil (NASDAQ:FOSL), and Take Two Interactive (NASDAQ:TTWO).
Now let's analyze this morning's upgrades, a group that encompasses a media and entertainment giant as well as our aforementioned Hillshire Brands.

Bridgepoint Education (NYSE:BPI): Deutsche Bank boosts BPI to Hold from Sell.
Danone (OTCMKTS:DANOY): Shares get upgraded to Equal-Weight from Underweight at Morgan Stanley.
Hillshire Brands: Today's headline stock is taken to Outperform from Market Perform with Wells Fargo. Its price objective also increases, to a range of $40 to $42 from a prior projection of $33 to $34.
Masco (NYSE:MAS): Jefferies juices its investment assessment to Buy from Hold. Its target price, previously $23, increases by $2.
Qiagen (NASDAQ:QGEN): The stock is now Neutral from Underweight at HSBC Securities.
Time Warner (NYSE:TWX): Sanford Bernstein moves the media and entertainment powerhouse to Outperform from Market Perform.
TNT Express (OTCMKTS:TNTEY): Shares get increased to Overweight from Neutral at JPMorgan.
Also see:

New Stock Coverage: Can Global Cash Access Put Money in Your Pocket?

Stock Downgrades: Kate Upton, Maytag Repairman Can't Save Whirlpool
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No positions in stocks mentioned.
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