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Upgrades & Downgrades: Citigroup Needs to Regroup


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

On Good Samaritan Day, it paid to "do God's work", and the Goldman (GS) executive who just announced his resignation on the New York Times op-ed page of all places is at least going out with a wallet as heavy as his heart. Surging bank stocks sent the Dow Average (^DJI) up for a fifth straight session after JP Morgan's (JPM) Jamie Dimon -and not for the first time - showed Ben Bernanke who's boss by positively preempting the Fed's stress test a full 48 hours ahead of the central bank's intended schedule. Shares subsequently posted their best performance of the year, investors wisely opting not to sweat the small stuff, like our red ink rising to a tidy $1.2 trillion. Among standout equities, Southwest Airlines (LUV) shrugged off a revenue warning to end up 1.57% on a day southern love was also in the air for Rick Santorum, winner of primaries in Alabama and Mississippi. Concerns thus appear to be increasing over the electability of Mitt Romney, whose many silver-foot-in-mouth episodes include telling us Michigan's "trees are the right height" all the while casually wagering $10,000 and saying he "likes to fire people." How can he possibly compete with the deft touch of our current president, who asked a bunch of befuddled salt-of-the-earth farmers in Iowa - one of "57 states" he visited - if anybody had "gone into Whole Foods (WFM) lately and seen what they charge for arugula?" (The expensive grocer, so beloved of coastal elites, is of course nowhere to be found in the Hawkeye heartland.)

Still, even as Obama's poll numbers plummeted to new lows amid pain at the pump, an analyst upgrade sent 'Whole Paycheck' up 2.59% to a high never before seen in its history. Searching for further net profits, the nation's chief executive promptly took Britain's prime minister to a basketball game. An improvement on the bargain basement box set of movie DVDs he gave David Cameron's predecessor I suppose, although film buff Carmike Cinemas (CKEC) - which just jumped 17.25% to a fresh peak - may literally beg to differ. And the bullets - both silver and magic - so beloved of the White House will surely go unused after Alliant Techsystems (ATK), the world's largest ammunition maker, slid 6.21% and Urban Outfitters (URBN), who think happiness is a warm gun despite being based in the City of Brotherly Love, fell 5.29% to prop up the entire S&P 500 Index(^GSPC). Today's earnings announcements are due to include Craft Brewing Alliance (HOOK), EnergySolutions (ES), French Connection (FCOGF.PK), Guess (GES), Lin TV (TVL), Rue21 (RUE), Transcept Pharmaceuticals (TSPT), and Vera Bradley Inc (VRA).


Great Plains Energy (GXP): Shares get begun with a Buy at Citigroup.

Geeknet (GKNT): Revenge of the nerds, as GKNT gets resumed with a Buy recommendation and $22 price target at The Benchmark Company, which expects the e-commerce business to grow materially faster than its domestic industry for the next several years.

Cempra (CEMP): The stock is covered with an Outperform with at Cowen & Company.


American Eagle Outfitters (AEO): The recently-surging retailer is raised to Buy from Above Average at Caris.

CBS Corp (CBS): RBC Capital upgrades the media empire to Top Pick from Outperform.

First Solar (FSLR): Shares of the troubled company are hoisted to Hold from Sell at DNB Markets.

Alcatel-Lucent (ALU): ALU is upgraded to Outperform from Market Perform by BMO Capital.

American Tower (AMT): JP Morgan moves AMT to Overweight from Neutral.

Anadarko Petroleum (APC): The oil outfit is upgraded to Buy from Hold with a $100 price objective at Stifel Nicolaus, which cites an improving balance sheet among other favorable factors.

Semiconductor stocks: Altera (ALTR) and NXP Semiconductors (NXPI) are each added to the Conviction Buy List at Goldman Sachs, sending shares up ahead of the open.

Micron (MU): Staying in the space, MU is moved to Outperform from Market Perform by Sanford Bernstein.

TCF Financial (TCB): TCB is taken to Buy from Neutral at Sterne Agee, whose target is $13.50.

Omeros (OMER): Canaccord Genuity gives the stock a Buy-from-Hold boost.


Citigroup (C): Shares, sliding before the bell after it failed the Fed's "stress test", are now Neutral from Overweight at JPMorgan.

Vodafone (VOD): The telecom titan is taken to Underperform from Neutral by BNP Paribas.

Juniper Networks (JNPR): JNPR is moved to Market Perform from Outperform by BMO Capital.

Crown Castle International (CCI): The stock is lower ahead of the open after downgrades by both JP Morgan (Neutral from Overweight) and Goldman (Neutral from Buy at Goldman and also off its list of Conviction Buys.)

Coventry Health Care (CVH): BMO Capital cuts CVH to Market Perform from Outperform.

Essex Property (ESS): The REIT is reduced to Hold from Buy at Stifel Nicolaus due to valuation concerns.

IHS Inc (IHS): Morgan Stanley moves the stock to Equal Weight from Overweight.

Kopin Corp (KOPN): The small cap stock is now Hold from Buy at Needham after KOPN company management lowered its earnings guidance.

TCF Financial (TCB): TCB is taken to Underperform from Market Perform with a $10 target at FBR Capital amid concerns it will underperform peers.

Texas Capital (TCBI): Shares are now Neutral from Buy at Suntrust.
No positions in stocks mentioned.
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