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Upgrades & Downgrades: Royal Bank of Scotland Enjoying Luck of the Irish


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

Those Goldman (GS) clients mortified about being called "Muppets" should really see it as a compliment. After all, Jim Henson's cuddly creations are both universally beloved and nobody's fools when it comes to making money. Indeed, in their recent Oscar-winning movie, Scooter is gainfully employed at Google (GOOG), raking in the sort of Silicon Valley salary that puts even Wall Street's elite to shame. But, best of all, and with all due deference to Kermit, in the current climate it is actually exceedingly easy being green. On the eve of St. Patrick's Day, Dow Industrials (^DJI) were a sea of emerald for a seventh straight session, their best such streak since July 2010, while the S&P 500 Index (^GSPC) advanced above 1400 for the first time since June 5, 2008. That was the day bank shares surged, led by Lehman Brothers. The more things change, the more they stay the same; yesterday, financials -- already up 20% in 2012 -- again led the charge and Lehman is… well, let's not go there. Ahead of Saturday's single biggest hangover event of the year, aspirin inventor Bayer AG (BAYRY.PK) got downgraded, Tylenol titan Johnson & Johnson (JNJ) had a multi-million dollar migraine, and Apple (AAPL) - which actually ended down after earlier hitting $600 for the first time in its history - was advised to take two tablets and call the doctor in the morning, about 8 o'clock.

It's hard to believe Apple shares slumped to $3.53 in 1997, the year an unemployed Scottish welfare mum saw her book about a boy wizard picked up by Scholastic (SCHL). Harry is now history in every sense of the word but the publisher appears to be doing just fine post-Potter, surging 12.92% to stand at a nine-year summit. He flew through the air unaided of course but more conventional forms of movement fared just as well, with FreightCar America (RAIL) rising 4.21% and rival CSX Corp (CSX) a 8.46% gainer to lead all S&P 500 issues as the transportation sector posted its strongest performance of the year. And on what was both the 40th anniversary of The Godfather and the finale -- either season or series -- of Vinny Guadagnino's Jersey Shore, the Staten Island native watched that borough's Coffee Holding (JVA) jump 14.77% in continuing a remarkable recent run. Ain't saying it's suspicious, just sayin'. Today is an always interesting "quadruple witching" options expiration session. This morning in economics, an improvement is expected in the University of Michigan's March consumer sentiment survey at 9:55 a.m. Eastern. On the earnings front, Consolidated Water (CWCO), Harris & Harris Group (TINY), Lakes Entertainment (LACO), and U.S. Energy (USEG) are all due to release results.


Coach Inc (COH): The luxury retailer, recently trading at all-time highs, is begun with a Buy recommendation and $90 price objective at Argus.

Cellular infrastructure industry: American Tower (AMT) and SBA Communications (SBAC) are each initiated with Outperforms at Credit Suisse, which has a new Neutral on Crown Castle International (CCI).

Cabela's (CAB): Wells Fargo covers the hunting and shooting outfit with an Outperform.

Dana Holding (DAN): Bank of America-Merrill Lynch launches Buy rated research on DAN.

Dick's Sporting Goods (DKS): DKS is a fresh Market Perform with Wells.

Federal Realty Investment Trust (FRT): Shares are assigned an In-Line and $99 target price at Imperial Capital. Although its portfolio offers steady growth prospects, such strength is already reflected in a premium valuation, currently at a 50% multiple to shopping center peers.

Golar LNG (GLNG): The stock gets picked up at a Market Perform with Wells Fargo.

ManTech (MANT): Morgan Stanley starts the shares at Underweight.

Neurocrine Biosciences (NBIX): NBIX is a new Buy at Deutsche Bank.

Par Pharmaceutical (PRX): JP Morgan picks PRX up at a Neutral.


Microsoft (MSFT): The Dow member, already at a multi-year peak, is upgraded to Buy from Hold with a $39 target at Argus. The broker says that with Windows 8 likely to launch in the third quarter, it may finally have an operating system that can compete in both the PC and tablet environments.

Royal Bank of Scotland (RBS): Shares are surging in London this morning after being boosted to Buy from Neutral at UBS, which is impressed with management's clear post-financial crisis funding and capital strategy.

Shire plc (SHPGY): The firm is moved to Overweight from Neutral at JPMorgan.

Veolia Environnement (VE): Shares are up in Europe after UBS raised its rating to Neutral from Sell.

Vantage Drilling (VTG): The small cap stock is increased to Buy from Hold at Dahlman Rose, which now feels comfortable that the company will likely be able to finance two drillships without additional equity.

Acme Packet (APKT): APKT is now Outperform from Market Perform at Northland Securities

AXT Inc (AXTI): The semiconductor stock gets upgraded to Outperform from Market Perform at Northland Securities, which takes its objective up to $8 amid improvements across a number of its end markets.

Lear Corp (LEA): Shares are added to the Conviction Buy List at Goldman Sachs.

Transocean (RIG): RIG is raised to Buy from Neutral with an increased price target of $70 at Global Hunter Securities.

Wabtec (WAB): WAB is hoisted to Buy from Hold at BB&T Capital.


U.S. financials: Morgan Stanley (MS), TD Ameritrade (AMTD), and BlackRock (BLK) are all downgraded to Hold from Buy at Deutsche Bank.

European autos: Porsche (POAHY.PK) and Mercedes-Benz owner Daimler AG (DDAIF.PK) are each cut to Underperform from Market Perform by Sanford Bernstein, which reduces Peugeot Citroën (PEUGY.PK) to Market Perform from Outperform, sending all three lower in London.

Buffalo Wild Wings (BWLD): No March Madness boost for BWLD, now Neutral from Outperform with Wedbush.

Estée Lauder (EL): Taking profits after its stock attained an historic high yesterday, Caris & Company cuts the cosmetics company to Above Average from Buy.

Primo Water (PRMW): Shares are moved to Neutral from Buy at Janney Montgomery Scott.

Red Hat (RHT): RHT is reduced to Equal Weight from Overweight at Morgan Stanley.

Seadrill Ltd (SDRL): Shares are taken to Hold from Buy at Dahlman Rose due to valuation issues.

Sun Communities (SUI): The stock gets lowered to Underperform from Neutral by Bank of America-Merrill Lynch.

Triple-S Management (GTS): GTS gets taken to Market Perform from Outperform with Wells.

ADTRAN (ADTN): ThinkEquity cuts its opinion to Hold from Buy.

Armstrong World Industries (AWI): The floor maker may have hit a ceiling, cut to Hold from Buy at KeyBanc Capital amid concerns over its multiple.

K+S Aktiengesellschaft (KPLUF.PK): The German specialty fertilizers company is cut to Neutral from Buy at UBS.
No positions in stocks mentioned.
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