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Upgrades & Downgrades: Sell Best Buy? Why You Could Do Worse


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

If I may misquote Jessica Rabbit with the Easter Bunny fast approaching, "American manufacturing isn't bad. It's just drawn that way." (And no wonder, with Ohio Art's (OART.PK) Etch A Sketch actually made in China.) Amid all the recent hand-wringing over Beijing's factory floors having bested ours for the first time in over a century, American output still remains essentially neck-and-neck with its Asian rival, and does so with millions fewer workers. Thus did the Institute of Supply Management report on Monday that its index rose for a 32nd straight month, the best showing in a generation. Stocks promptly followed, with indices posting their now-customary gain to start a month. Standouts included Louisville's own Brown-Forman (BF-A), the Jack Daniel's owner enjoying nothing but net profits in reaching a record high on a day the Bluegrass State needed no excuse to get blotto. (Well, all except the three freshmen and two sophomore stars on its all-conquering basketball team, still too young to imbibe alcohol.) Avon Products (AVP) surged 17.25% on takeover talk, its best intraday increase since April 2000, easily pacing all S&P 500 (^GSPC) advancers. The cosmetics company surprisingly opted against remaining forever Jung. Smart move; Botox maker Allergan (AGN) fell yesterday as an analyst cut the company 499 years to the day after Ponce de Leon arrived in Florida, our oldest state, also known as "God's Antechamber," in a vain search of the Fountain of Youth.

Avon actually got its start by selling books door-to-door. As did, electronically speaking, (AMZN) though it may want to stick to selling perfume after tumbling 2.20% on a research downgrade. In other analyst action, Apple Inc (AAPL) rose 3.18% after being assigned its first ever $1,000 price objective. No comment from Qualcomm (QCOM), a recipient of that dubious honor in 1999 and last seen trading at $68.32. (ACOM) advanced 8.75% as the1940 census provided us with a snapshot of what poet W.H. Auden called a "low, dishonest decade." Coupon-clipping came of age during the Great Depression of course, but best not to mention that around shareholders of Groupon (GRPN) after its 16.89% slide. And DineEquity (DIN), owner of the International House of Pancakes, also ended down on a ratings reduction. Hopefully Mitt Romney saw the funny side. This morning in economics, analysts expect February factory orders to tick up at 10:00 a.m. Eastern, and at 2:00 p.m. the Federal Open Market Committee releases minutes to its March 13 policy meeting. In earnings action, Blonder Tongue Laboratories (BDR), Comverse Technology (CMVT), International Speedway (ISCA), and Mitcham Industries (MIND) are all due to release results.


Apple Inc (AAPL): Shares are initiated with a Buy at Auriga, whose target is $700.

Alternative energy: Fuel Systems Solutions (FSYS) and Clean Energy Fuels (CLNE) are each initiated with a Neutral at Macquarie.

Internet stocks: (AMZN) is a Market Perform at JMP Securities, which picks up Pandora Media (P) at Outperform.

Education stocks: Grand Canyon Education (LOPE) is begun with a Buy at Deutsche Bank, which begins Holds on both Bridgepoint Education (BPI) and Capella Education (CPLA).

Gold stocks: Goldcorp (GG) is a new Neutral at Citigroup, which has a $47 target. Kinross Gold (KGC) is begun with a Buy and a price objective of $13.

Tobacco stocks: Imperial Tobacco (ITYBY.PK) is a new Underperform at BNP Paribas, which has an Outperform on British American Tobacco (BTI).

Groupon (GRPN): GRPN gets initiated with a Neutral at Sterne Agee.

Western Union (WU): Bank of America-Merrill Lynch launches Neutral-rated coverage on WU.


American Public Education (APEI): Shares are upgraded to Buy from Hold at Deutsche Bank.

AutoZone (AZO): AZO is added to the Conviction Buy from Neutral at Goldman Sachs.

Constellation Brands (STZ): The winemaker is upgraded to Buy from Neutral at Goldman.

GNC Holdings (GNC): The vitamins maker is higher ahead of the open on an upgrade to Outperform from Market Perform at BMO Capital.

Urban Outfitters (URBN): Shares are now Neutral from Sell at Citigroup.

Novo Nordisk (NVO): The Danish drug maker is up in Europe this morning after Bank of America-Merrill Lynch added the stock its Europe 1 list.

Primerica (PRI): The stock is now Neutral from Underperform at Macquarie.

Schlumberger (SLB): The oil services firm is upgraded to Buy from Neutral at Sterne Agee, whose target is $93.

Sempra Energy (SRE): Shares are upgraded to Outperform from Sector Perform at RBC Capital.

Western Alliance Bancorp (WAL): WAL is now Buy from Neutral at Sterne Agee.


Coca-Cola (KO): The Dow member gets downgraded to Hold at Stifel Nicolaus due to valuation.

Akzo Nobel (AKZOY.PK): The specialty chemicals company is now Neutral from Buy at Nomura, sending their shares lower in London this morning.

Beam Inc (BEAM): The recent alcoholic spirits spin-off gets downgraded to Neutral from Buy at Goldman.

Best Buy (BBY): Shares are slashed 180 degrees, to Sell from Buy at McAdams Wright Ragen. They say confidence in management's desire to prudently invest cash flows has waned.

Netflix (NFLX): Shares are now Equal Weight from Overweight by Barclays.

Newmont Mining (NEM): NEM is now Neutral from Buy at Citi.

Philip Morris (PM): The tobacco titan is taken to Neutral from Outperform at Credit Suisse.

Accretive Health (AH): AH is cut to Neutral from Buy at Goldman.

Fastenal (FAST): The stock gets downgraded to Market Perform from Outperform at William Blair.

Global Payments (GPN): Saying it expects the firm to have higher security spending following the recent credit card data breach, Nomura cuts its rating to Neutral from Buy at Nomura with a price target of $46.

US Bancorp (USB): The equity is downgraded to Hold from Buy at Stifel Nicolaus.

Waddell & Reed (WDR): WDR is now Neutral from Buy at Sterne Agee.
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