Goldman upgraded BT Group (NYSE: BT) to Buy from Neutral on valuation and improved earnings visibility.
Soleil upgraded shares of Jo Ann Stores (NYSE: JAS) to Buy from Hold following the company's Q2 upside surprise to reflect strong fundamentals and market share gains. The firm raised Jo Ann's target to $30 from $25.
Amylin Pharma (NASDAQ: AMLN) was upgraded to Buy from Neutral at Merrill Lynch.
Energen (NYSE: EGN) was upgraded to Buy from Neutral at UBS.
Analyst downgrades:
Roth Capital downgraded shares of Warner Chilcott (NASDAQ: WCRX) to Hold from Buy pending patent clarity for the company's lead drug, Loestrin 24 for birth control. The firm lowered their target to $18 from $20.
JP Morgan cut China Mobile (NYSE: CHL) to Underweight from Overweight as they believe increased competition may limit earnings growth.
Cantor downgraded shares of Cell Genesys (NASDAQ: CEGE) to Hold from Buy following the termination of the VITAL-2 Phase III clinical trial. The firm also lowered their target to $2 from $10.
Coca-Cola (NYSE: KO) was lowered to Neutral from Outperform at Credit Suisse.
Gilead Sciences (NASDAQ: GILD) was downgraded to Equal Weight from Overweight at Lehman.
Cinemark (NYSE: CNK) was downgraded at BMO Capital to Market Perform from Outperform.
Stock futures were flattish Thursday morning as oil prices rose due to continued concern over Gustav. However, some retailers have posted better-than-expected earnings. Still, there are several economic reports due before the open that could sway sentiment either way, including revised GDP for the second quarter. [Update: Futures turned positive after the report U.S. gross domestic product grew by 3.3% in the second quarter - much higher than previously stated.]
U.S. jeweler Tiffany & Co (NYSE: TIF) posted double the quarterly profit from a year ago on Thursday, benefiting from strong international sales and solid tourist spending at its New York flagship store. Net profit was $80.8 million, or 63 cents per share, in its fiscal second quarter, up from $40.5 million, or 29 cents per share a year earlier, and beating estimates of 55 cents per share. Revenue grew 11%. Tiffany also raised its 2008 profit outlook on strong sales in Europe and Asia and expected improvement in the U.S. TIF shares are up over 6% in premarket trading.
On the other hand, department store retailer Sears Holdings (NASDAQ: SHLD) reported a 62% plunge in second-quarter net profit to $65 million, or 50 cents per share. Excluding a gain, Sears earned 21 cents, trailing some analysts' estimates by 15 cents. Chief Executive Bruce Johnson said the results were affected by the "slowing economy." It seems some, though, still have confidence in Chairman Lampert.
Fannie Mae (NYSE: FNM), the mortgage finance giant, shook up its executive ranks Wednesday. "Its chief financial officer and two other top executives are leaving the company. Three current executives were promoted to replace them." CEO Mudd kept his job. Shares of Fannie and sibling Freddie Mac (NYSE: FRE) have been rising after concern over a government bailout lessened. In premarket trading, FNM and FRE shares are up over 6% and 5% respectively.
There was a bit of a move up in the market today, but there was very little news to push sentiment one way or the other. Traders are too tired from the beating they have taken since Memorial Day.
DJIA : 11,504.87 +0.81% NASDAQ: 2,382.46 +0.87% S&P 500: 12.81.63 +0.8% 10 Year Bond 3.772% -0.0120 52-Week Lows
Short interest figures for stocks traded on both the NYSE and Nasdaq were released yesterday: Short sellers jumped out of both financials and big tech, signaling a possible turn up in those sectors.
Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) continued to rally, extending hopes they will not have to be bailed out by the government and that common shareholder will not be crushed. Late in the day Freddie was up 17% and Fannie 12%.
Goldman upgraded shares of British Sky Broadcasting (NYSE: BSY) to Buy from Neutral and added the company to the Conviction Buy List as they find the stock oversold at current levels.
Goldman also added Publicis (OTC: PUBGY) to the Conviction Buy List and upgraded shares to Buy from Neutral as they find the stock cheap at current levels.
Oneok (NYSE: OKE) was upgraded to Overweight from Equal Weight at Lehman.
Baird downgraded Amylin Pharma (NASDAQ: AMLN) to Neutral from Outperform and said they are incrementally more cautious on the commercial performance of Amylin's Byetta following the yesterday's update. Amylin's target was lowered to $27 from $37. Soleil recommends investors avoid Amylin with the disclosure last night of four additional cases of mortality associated with pancreatitis in patients who were on Byetta. The firm cut shares to Sell from Hold and lowered their target to $20 from $25.
Citigroup downgraded shares of AMR Corp. (NYSE: AMR) to Sell from Hold on valuation as they find the stock expensive following the recent run-up. The firm raised their target to $9 from $6.70 to reflect the drop in crude prices.
J Crew (NYSE: JCG) was downgraded to Hold from Buy at Brean Murray following the weak Q2 report and guidance.
JMP Securities downgraded Quality Systems (NASDAQ: QSII) to Market Perform from Outperform.
National Grid (NYSE: NGG) was lowered to Equal Weight from Overweight at Lehman.
Every time the FDA turns around, a few more people have died from the diabetes drug Byetta, a product developed and marketed by Eli Lilly (NYSE: LLY) and Amylin Pharmaceuticals (NASDAQ: AMLN). It has to make one wonder how the regulators spend their spare time.
According toThe Wall Street Journal,the two companies "disclosed the deaths of four patients taking the diabetes drug Byetta that had been previously reported to regulators but not yet made public." The drug has already killed two people previously, at least.
Lilly and Amylin said they were a bit slow coming forward with the news because they wanted to "provide context" and "avoid confusion" in the future. That is double talk for the two companies not wanting to say anything at all. Dead is dead and there is no way of getting around that.
Why the FDA has allowed the drug to stay on the market is anyone's guess.
Douglas A. McIntyre is an editor at 247wallst.com.
U.S. stock futures were lower this morning on fear Tropical Storm Gustav's path may pose a threat to refinery activity along the Gulf of Mexico coastline and some would have to shut down. Indeed, oil prices rose to above $117 a barrel Wednesday. Also in focus today is the upcoming durable goods order to be reported before the opening bell. Meanwhile, the FDIC is considering borrowing funds from the Treasury, amid an expected wave of bank failures. Nine banks have failed so far this year, and the number of troubled U.S. banks rose 30% to 117 in the second quarter. [Update: Futures turned positive after durable goods unexpectedly gained.]
Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), which stocks jumped big Tuesday, both had several ratings cut by Standard & Poor's. Still, both stocks seem to continue their climb in premarket with Fannie shares up 7.5% and Freddie's up 10%. At least two analysts, from Citigroup and Goldman said Tuesday the situation isn't as bad as it may seem.
From financials to toys: A federal jury awarded Mattel Inc. (NYSE: MAT) $100 million in damages on Tuesday in a federal copyright lawsuit against MGA Entertainment Inc., the maker of the saucy Bratz dolls.
Moving to pharmaceuticals, Amylin Pharmaceuticals Inc. (NASDAQ: AMLN) and Eli Lilly & Co. (NYSE: LLY) shares are down 10% and 1% respectively in premarket trading after four more patients taking their Byetta diabetes medication have died. Baird downgraded Amylin from Buy to Neutral and cut its price target from $37 to $27. Soleil downgraded AMLN from Hold to Sell.
William Blair raised Quest Diagnostics (NYSE: DGX) to Outperform from Market Perform. The firm believes that the long-term fundamentals of the clinical laboratories sectors are still strong.
UBS upgraded Massey Energy (NYSE: MEE) to Buy from Neutral on valuation.
ArthroCare (NASDAQ: ARTC) was upgraded to Buy from Hold by Lazard, since the firm expects a small restatement while they believe a large restatement is priced into the shares.
Arch Coal (NYSE: ACI) was upgraded to Buy from Neutral by UBS.
Aetna (NYSE: AET) was initiated with a Buy by Banc of America, which believes the company will experience industry-leading member growth.
Banc of America initiated Wellpoint (NYSE: WLP) with a Buy rating, as the firm expects the shares to rebound from near trough valuations.
Wachovia (NYSE: WB) was reinitiated by Friedman Billings with an Underperform rating, as the firm expects the company to incur higher credit losses than the Street expects due to its outsized exposure to residential real estate.
Six Flags (NYSE: SIX) was started with an Above Average rating by Caris.
When should the FDA pull a drug off the market? When one person dies from side-effects? How about two or three?
Eli Lilly (NYSE: LLY) and Amylin Pharmaceuticals (NASDAQ: AMLN) produce a highly successful diabetes drug called Byetta. According toThe Wall Street Journal, "The Food and Drug Administration on Monday said it has received six new reports of patients developing a dangerous form of pancreatitis while taking Byetta."
Two of the patients died.
The drug makers said that the poor results were very rare. The people who got sick probably view it a little differently.
There have been questions for some time about whether the FDA does an effective job of regulating drug companies. The problems with Byetta say that the answer is "no." A drug, which causes even one death, yet stays on the market speaks volumes about how the consumer's interests are cast aside.
Douglas A. McIntyre is an editor at 247wallst.com.
MOST NOTEWORTHY: PetMed Express, Mindspeed and QLogic were today's noteworthy upgrades:
Piper upgraded shares of PetMed Express (NASDAQ: PETS) to Neutral from Sell after the company's Q1 results topped estimates on strong new customer growth. Piper raised their target to $14 from $11.
Oppenheimer raised Mindspeed (NASDAQ: MSPDD) to Outperform from Perform following the Q3 results, as they believe the company is hitting its stride in VoIP after years of investment and the stock is attractively valued.
Citigroup upgraded QLogic (NASDAQ: QLGC) shares to Buy from Hold following the company's Q1 results and Brocade (NASDAQ: BRCD)'s acquisition of Foundry Networks, Inc. (NASDAQ: FDRY) to reflect its solid fundamentals and the strategic significance of its switch business. The firm raised their target to $20 from $18.
OTHER UPGRADES:
Goldman added Amylin Pharma (NASDAQ: AMLN) to the Conviction Buy List.
Cleco (NYSE: CNL) was raised to Buy from Hold at Soleil.
MOST NOTEWORTHY: Spreadtrum, Amylin Pharma and Network Equipment were today's noteworthy downgrades:
Roth Capital downgraded Spreadtrum (NASDAQ: SPRD) to Hold from Buy and said recent checks at several Chinese handset companies indicate shipments have been weak since mid April due to sluggish demand and weak macro conditions. The firm does not expect SPRD to meet its Q2 revenue guidance and has lowered estimates and its rating.
Jefferies downgraded shares of Amylin Pharma (NASDAQ: AMLN) to Hold from Buy as they believe Novo Nordisk's (NYSE: NVO) Liraglutide could prove to be greater-than-expected competition for AMLN's Byetta.
Network Equipment (NYSE: NWK) was cut at ThinkPanmure to Source of Funds from Buy following the company's reduced guidance based on reduced government spending.
OTHER DOWNGRADES:
Lehman downgraded European Stocks to Underweight from Overweight.
Murphy Oil (NYSE: MUR) was cut at JP Morgan to Underweight from Neutral.
Goldman downgraded Frontier Oil (NYSE: FTO) and Lumber Liquidators (NYSE: LL) to Neutral from Buy.
Tekelec (NASDAQ: TKLC) was lowered to Hold from Buy at Deutsche Bank.
Today was an odd day, with technology stocks taking the trump card and dominating most earnings reports. The NASDAQ was the strong index today, although the DJIA and the S&P tried unsuccessfully to erase most of their losses toward the closing bell today. With oil rising every day, you'd think at some point it would affect things. Not yet. Here are the unofficial closing bell prices for major US index levels:
Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) reported first quarter losses of $68.8 million, or $0.51 EPS, wider than the $49.4 million in the first quarter of 2007. Losses are credited to a drop in sales in diabetes treatment, Byetta, a drug they co-market with Eli Lilly (NYSE: LLY), and increased expenses. Analysts estimated losses of $0.47 EPS. The 52-week range is $23.75 to $53.25. Shares were down over 10% at $28.13 in the final minutes of trading today.
MOST NOTEWORTHY: Almost Family, Cooper Industries and Ciber were today's noteworthy initiations:
Jefferies believes Almost Family (NASDAQ: AFAM) will likely take advantage of the significant consolidation opportunity in home nursing. The firm started shares with a Buy rating and $26 target.
Kevin Dann initiated Cooper Industries (NYSE: CBE) with a Sell rating and $35 target and believes the upcoming growth deceleration in North America, Europe and Asia's developed regions could weigh on sales growth and further margin expansion.
Ciber (NYSE: CBR) was assumed with a Buy rating and $9 target at Roth Capital, as they view the company as a compelling investment opportunity for value investors. The firm recommends building positions.
OTHER INITIATIONS:
BMO Capital initiated Bionovo (NASDAQ: BNVI) with a Market Perform rating.
Goldman reinstated Live Nation (NYSE: LYV) with a Buy rating and $15 target.
Canaccord Adams started Amalyin Pharma (NASDAQ: AMLN) with a Sell rating and $23 target.
MOST NOTEWORTHY: Heelys, Citigroup, Alvarion, UBS AG and Alcatel-Lucent were today's noteworthy downgrades:
CIBC downgraded Heelys (NASDAQ: HLYS) to Underperformer from Sector Performer. The analyst has little confidence sales will recover following the recent drop.
CIBC also downgraded Citigroup (NYSE: C) to Sector Underperformer from Sector Performer, as they believe the company may have to cut its dividend, raise cash or sell assets in order to raise $30B over the near-term; the firm believes such a move would pressure shares significantly.
Merriman downgraded shares of Alvarion (NASDAQ: ALVR) to Neutral from Buy after the in-line results as they now believe increased competition will pressure gross margins and minimize operating leverage in FY08.
Merrill downgraded shares of UBS AG (NYSE: UBS) to Neutral from Buy to reflect the potential of further write downs.
Banc of America lowered its rating on Alcatel-Lucent (NYSE: ALU) to Neutral from Buy to reflect poor execution of the company's turnaround strategy.
OTHER DOWNGRADES:
Goldman removed Vimpelcom (NYSE: VIP) from its Pan European Buy List and downgraded shares to Neutral from Buy.
Analyst upgrades:
Stock futures were flattish Thursday morning as oil prices rose due to continued concern over Gustav. However, some retailers have posted better-than-expected earnings. Still, there are several economic reports due before the open that could sway sentiment either way, including revised GDP for the second quarter.
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Here are some highlights from this past week's .gif){kind=logo}
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Serious Money: How 'Stable' after 345 DJIA drop? -- CB, DIS, JNJ, TEVA & XEL
Closing Bell: Dow plunges amid grim economic news; AIG, CIEN, LM, TEX decline, WMT gains
Is BT's offer to save Britain's red phone boxes for £500 fair?
