Wall to Wall Street Coverage: Upgrades and Downgrades
Time was, we went from shirtsleeves to shirtsleeves in three generations. Now it takes us only a decade and a half to round-trip irrational exuberance. Fifteen years to the day after Alan Greenspan's famous utterance — made when the Dow was at 6,437 — Blue Chips rose for a fourth straight session to close at 12,102 amid optimism over a Franco-German agreement on European debt. Encouraging progress on Italian austerity also boosted equities, investors relieved that this time there were only Roman tears instead of the earlier Athenian tear gas. A highway bonfire of the vanities involving nine of the country's most expensive and iconic cars — eight Ferraris and a Lamborghini — seemed a fitting symbol for Europe's new era of seat belt tightening.
Meanwhile McDonald's (MCD) hit an all-time high and Gannett (GCI), whose USA Today is often derided as 'McPaper', gained 10.24%. The check, if not the DVD, is once again in the mail for Netflix (NFLX), which rose 5.65%. A stranded man in Alaska survived on Coors (TAP) Light (a.k.a the "Silver Bullet"), which one hopes will cheer the heart enough to prevent Clifford C. Clavin from going postal next time he bellies up to the bar and bemoans the sorry state of his employer. (Then again, with firearms firm Sturm Ruger (RGR) surging 5.51%, maybe not.) Sport Chalet (SPCHA), which offers customers the chance to swim with Scuba Santa, ended underwater to the tune of 10.06%. And downgrades of Domino's Pizza (DPZ) and Papa John's (PZZA) sent both stocks lower. Each are now in a vegetative state, as the government would say. No top-tier economic data out today but earnings are expected to include AutoZone (AZO), Bank Of Montreal (BMO), Diamond Foods (DMND), Oxford Industries (OXM), ThyssenKrup, and Toll Brothers (TOL).
Initiations:
Software sector: Barclays begins following the space with Equal Weights on, among others, Dow component Microsoft (MSFT), Internet security stock Symantec (SYMC), and AutoDesk (ADSK). Its Overweights include Oracle (ORCL), Ariba (ARBA), Intuit (INTU), Informatica (INFA), Salesforce.com (CRM), SAP AG (SAP), Citrix Systems (CTXS), VMware (VMW), and Netsuite (N). For more, please read SAP Moves to Strengthen Cloud Position With Acquisition of SuccessFactors.
Tobacco space: Deutsche Bank begins a Buy on Altria (MO) and has a Hold on rival Reynolds American (RAI).
Drug stocks: Cantor Fitzgerald launches Buy rated coverage on Forest Labs (FRX) ($36 price target), Obagi Medical (OMPI) ($12), and Salix Pharmaceuticals (SLXP) ($56). It has a Hold and $12 target on Ironwood Pharmaceuticals (IRWD). Also read December Catalysts for Drug and Biotech Stocks.
Monster Worldwide (MWW): Lazard launches Buy rated coverage on the Internet employment service.
OpenTable (OPEN): Piper Jaffray picks up the online restaurant reservation stock at a Neutral.
Novellus (NVLS): NVLS is a new Outperform at Crédit Agricole.
ACE Limited (ACE): The insurer is begun with a Buy rating and $85 price objective at Ticonderoga, reflecting a growing belief that there is an imminent upward turn in the property casualty cycle.
International Paper (IP): The forest products powerhouse is assigned a Neutral at Credit Suisse.
Vulcan Materials (VMC): Shares are started at a Neutral by Sterne Agee.
Martin Marietta Materials (MLM) is begun with a Buy and $90 objective, also at Sterne Agee.
Ducommun (DCO): EarlyBirdCapital assigns a Buy recommendation on the aerospace outfit.
Upgrades:
General Electric (GE): The Dow component gets an Outperform-from-Market Perform increase at Sanford Bernstein, sending shares up before the bell.
eBay (EBAY): Shares are named a long Research Tactical Idea at Morgan Stanley.
Texas Instruments (TXN): JMP Securities moves the semiconductor stock to Outperform from Market Perform.
LinkedIn (LNKD): Shares are lifted to Overweight from Neutral at JPMorgan. The House of Morgan clearly likes the recent IPO, for it is also upgraded to Overweight from Equal Weight at Morgan Stanley, which additionally names the stock a long Research Tactical Idea.
Orbitz (OWW): The online travel company is upgraded to Buy from Hold at The Benchmark Company, which increases its price objective by $2 to $5. Catalysts include its 'ebookers' European hotel operation, allied to expected private-label driven growth acceleration and profit creation in 2012.
Alaska Air (ALK): ALK is resumed at a Market Perform by brokers Raymond James.
Canadian Pacific Railway (CP): Turning from planes to trains, Barclays raises its recommendation to Equal Weight from Underweight.
MetroPCS (PCS): Brokerage William Blair moves the communications company to Outperform from Market Perform.
Carter Holdings (CRI): Goldman Sachs boosts CRI to Buy from Neutral.
Downgrades:
Alliance Data Systems (ADS): ADS is cut to Neutral from Overweight at Piper Jaffray.
Ingersoll-Rand (IR): Shares of the industrial outfit are now Neutral from Buy at Sterne Agee.
Canadian National Railway (CNI): The company is cut to Underweight from Equal Weight by Barclays.
Tesoro (TSO): Credit Suisse takes TSO to Neutral from Outperform.
ADTRAN (ADTN): ADTN gets a Sell-from-Neutral ratings reduction at Goldman.
Huntsman (HUN): The stock is cut to Hold from Buy at Jefferies, sending shares lower ahead of the open.
Fortinet (FTNT): Robert W. Baird reduces its rating to Neutral from Outperform with a $27 target price. The chief concern centers on a full valuation at current levels.
Statoil ASA (STO): The Norwegian oil firm is now Hold from Buy at Deutsche Bank.
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