Calyon upgraded major network carriers based on falling oil prices and capacity cuts. The analyst is positive over the next 12 months but cautious short-term given the uncertain economy, and volatile markets and oil prices. AMR Corp (NYSE: AMR) and Delta Air (NYSE: DAL) were upgraded to Add from Neutral and UAL Corp (NASDAQ: UAUA) was raised to Neutral from Reduce.
Ryanair (NASDAQ: RYAAY) was upgraded at Citigroup to Buy from Hold.
Cowen lifted Biogen Idec (NASDAQ: BIIB) to Outperform from Neutral.
JP Morgan upgraded Choice Hotels (NYSE: CHH) to Neutral from Underweight following the better-than-expected Q3 report.
Oppenheimer upgraded shares of Integra LifeSciences (NASDAQ: IART) to Outperform from Perform on valuation, the company's minimal exposure to economic conditions, and expectations for margin improvement and a rebound in organic growth.
MOST NOTEWORTHY: International Paper, Autodesk, Oracle and Vistaprint were today's noteworthy upgrades:
Citigroup upgraded shares of International Paper (NYSE: IP) to Buy from Hold on valuation and their belief that recent declines in the dollar will support pulp, paper and paperboard prices going forward.
Autodesk (NASDAQ: ADSK) was upgraded to Buy from Hold at Jefferies after their proprietary survey yielded positive data points going into Q3. They also raised their estimates due to currency. Broadpoint raised its rating on Oracle to Buy from Neutral on valuation following the recent underperformance.
Oracle (NASDAQ: ORCL) was also upgraded to Sector Outperformer from Sector Performer at CIBC, as they believe the company's growing product portfolio, improving margins and successful acquisition strategy should continue to drive double-digit EPS gains.
William Blair added Vistaprint (NASDAQ: VPRT) to its Current Better Values List. The firm believes the company has a large market opportunity and expects its business momentum to continue. They view the recent weakness as a buying opportunity.
OTHER UPGRADES:
Merrill Lynch upgraded Alcatel-Lucent (NYSE: ALU) to Neutral from Sell.
Diversification is often a key to success in business and there are few firms that can claim to have implemented that wisdom more broadly than a certain outfit in Maumee, Ohio. Among the many things they will sell you are ethanol, animal bedding products, filtration systems, fertilizers, electrical supplies, wine and a box car.
Andersons (NASDAQ: ANDE) serves interests in the U.S. agriculture, transportation and retail markets. Its Grain & Ethanol Group purchases and merchandises grain, operates grain elevator facilities, manages ethanol production facilities and engages in grain and ethanol trading. The Rail Group buys, sells, leases, rebuilds, and repairs various types of used railcars and rail equipment. The Retail Group offers hardware, plumbing, electrical, and building supplies, as well as specialty foods and wines. The Plant Nutrient and Turf & Specialty Groups formulate fertilizers. The company has operations in seven midwestern states, plus rail leasing interests in Canada and Mexico. Archer-Daniels-Midland (NYSE: ADM) is a major competitor.
Agricultural transportation company The Andersons Inc. (NASDAQ: ANDE) reported good numbers for first-quarter 2007 on May 2. The company is composed of five segments, three of which returned increases in revenues and profits. Overall, revenues were $409 million for the quarter, and net income was $9.2 million, which works out to diluted EPS of $0.51. These numbers are all improvements over 1Q 2006 figures. For the 43rd straight quarter, Andersons will pay a cash dividend, this time $0.0475 per share.
Grain and Ethanol is Andersons's largest business unit. On total revenues of $247 million, it earned operating income of $10.2 million, five times what it earned in 1Q 2006. Andersons was helped by a 40% average increase in grain prices, and by continuing demand for ethanol, of which Andersons sold more than $30 million in the quarter. The company just brought a second ethanol production plant into operation in May. So many companies are rushing into ethanol production that there may soon be excess production capacity, which will lead to price reductions and lowered earnings down the road.
Andersons specializes in the transportation of grain commodities by rail. Its Rail segment showed a small operating income for the quarter, $3 million, about half of what this unit earned in 1Q 2006. Total rail transport revenues were down due to a 5% decline in US rail traffic across the board. This unit sold fewer rail cars and had substantially higher maintenance costs for its wholly owned railcar fleet. 1Q 2006 was a particularly profitable quarter for this unit with the repair of so many rail cars damaged in Hurricane Katrina, so quarter-over-quarter comparisons are not completely accurate.
Andersons Inc. (NASDAQ:ANDE) is trading up over 2% pre-market after Banc of America raised its rating to Buy from Neutral on higher corn acreage in 2007 and beyond for the ethanol producer.
Netflix, Inc. (NASDAQ:NFLX) trading down roughly 3% as Banc of America started coverage with a Sell rating.
Valero Energy Corp. (NYSE:VLO) cut to Hold at Deutsche Bank on valuation.
Zimmer Holdings (NYSE:ZMH) cut to Mkt Perform at Piper Jaffray after the medical device maker offered mixed guidance.
Smith Barney lifts its S&P 500 Index target to 1600 from 1500.
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Analyst upgrades:
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