- Alcatel-Lucent (ALU) to buy from neutral at Goldman.
- Nvidia (NVDA) to outperform from market perform at JMP Securities.
- Verizon (VZ), AT&T (T), Leap Wireless (LEAP) and MetroPCS (PCS) to outperform from neutral at RW Baird.
- Illumina (ILMN) to buy from hold at Auriga.
- Sun Bancorp (SNBC) to neutral from sell at Janney Capital.
- American Tower (AMT), SBA Communications (SBAC) and Freeport McMoRan (FCX) to overweight from equal weight at Morgan Stanley.
- Medtronic (MDT) to buy from neutral and 1-800-Flowers.com (FLWS) to neutral from sell at Goldman.
- CarMax (KMX) to outperform from perform at Oppenheimer.
- Points International (PTSEF) to buy from neutral at Merriman.
- Nokia (NOK) to market perform from underperform at Morgan Keegan.
- Amdocs (DOX) to overweight from equal weight at Barclays.
- Western Alliance (WAL) to outperform from sector perform at RBC Capital.
- Carbo Ceramics (CRR) to outperform from market perform at BMO Capital.
- Rackspace (RAX) to buy from hold at Benchmark Co.
- Brinker (EAT) to equal weight from underweight at Morgan Stanley.
The earnings season ramps up this week. Analysts polled by Thomson Reuters foresee strong reports from such big names as Apple (AAPL), eBay (EBAY), IBM (IBM), General Electric (GE), Google (GOOG), Schlumberger (SLB) and Southwest Airlines (LUV). And fast on the heels of last week's big earnings beat from JPMorgan Chase (JPM), there will be plenty more results from the financial sector to peruse this week.
Among the financials expected to post double-digit earnings growth this week are Capital One Financial (COF), Morgan Stanley (MS), SLM Corp. (SLM) and U.S. Bancorp (USB), but the week's biggest earnings winner may be Wells Fargo (WFC).
- State Street (STT) was upgraded to buy from neutral at Goldman.
- Roth Capital upgraded Intel (INTC), Marvell Technology (MRVL) and Nvidia (NVDA) to buy from neutral.
- Bebe Stores (BEBE) was upgraded to buy from neutral at Janney Montgomery.
- W&T Offshore (WTI) was upgraded to buy from accumulate at Global Hunter.
- Citigroup upgraded International Rectifier (IRF) and Timberland (TBL) to hold from sell.
- Watson Pharma (WPI) was upgraded to buy from neutral at UBS.
- Atmel (ATML) was upgraded to strong buy from buy at Needham.
- Ashford Hospitality (AHT) was upgraded to outperform from neutral at RW Baird.
- Oppenheimer upgraded MetroPCS (PCS) to outperform from perform.
- Piper Jaffray upgraded Salesforce.com (CRM) to overweight from neutral, citing valuation following the recent sell-off and strong business trends. The firm has a $115 price target for shares.
- Keefe Bruyette upgraded M&T Bank (MTB) to market perform from underperform on valuation after AIB sold its stake in the company. The firm has a $72 price target for shares.
- Jefferies upgraded OGE Energy (OGE) to buy from hold following the announcement that ArcLight will purchase 9.9% of OGE's interest in Enogex for $183M and believes this deal highlights the hidden value associated with Enogex. The firm raised its price target to $51.50 from $43.
- Thomas & Betts (TNB) was upgraded to outperform from perform at Oppenheimer.
- Bayer (BAYRY) was upgraded to buy from neutral at UBS.
- Texas Roadhouse (TXRH) was upgraded to outperform from neutral at Baird.
First, let's look at the earnings:
Last week, JPMorgan Chase & Co. (JPM) led off the coming parade of earnings from the big banks when it reported better-than-expected fourth-quarter and full-year earnings, though its revenue fell short of estimates.
Plenty more earnings from the financial sector are due out this week. Analysts surveyed by Thomson Reuters anticipate fourth-quarter earnings growth from American Express Co. (AXP), Bank of New York Mellon Corp. (BK), Hudson City Bancorp Inc. (HCBK), SLM Corp. (SLM) and US Bancorp (USB).
- Deutsche Bank upgraded Research in Motion (RIMM) to hold from sell to reflect the company's Q3 results and guidance. The firm raised its target price on shares to $75 from $60.
- Keefe Bruyette upgraded Northern Trust (NTRS) and State Street (STT) to outperform from market perform to reflect valuation and favorable longer-term secular trends. The firm keeps a $58 price target on Northern Trust and a $51 target on State Street.
- UBS upgraded Universal Health (UHS) to buy from neutral and raised its target to $38 from $31. The firm said hospital checks indicate bad debt has not increased vs. Q3 and that Universal Health should report an in-line to better-than-expected Q4.
- Take-Two Interactive (TTWO) was upgraded to hold from sell at Kaufman Bros.
- Whiting Petroleum (WLL) was raised to outperform from market perform at Wells Fargo.
- BP Plc (BP) was upgraded at Goldman to buy from neutral.
With President Obama at the helm it seems as though the light might be shining on the economic horizon. If you're of this opinion then now might be a good time to invest some of your hard earned savings in the banking industry.
But what banking firm do you decide to go with? Rather than selecting just one bank, how about hedging your bets by investing in many diverse banks from all over the country? An exchange traded fund (ETF) is a great way to do just that. By investing in the ETF PowerShares Dynamic Banking (PJB) you get shares of several different banks. PJB seeks to replicate the Dynamic Banking Intellidex index and invests at least 90% of assets in common stocks that comprise that index. Among their holdings in the PJB ETF are BancFirst Corporation(NASDAQ GS: BANF) BancFirst's holding company, Capital Federal Financial(NASDAQ GS: CFFN) the holding company for Capitol Federal Savings Bank, and Northern Trust Corporation(NASDAQ GS: NTRS) Northern Trust Company's holding company.
Northern Trust (NASDAQ: NTRS) had a great time with taxpayer money. It spent $6.3 million for an LA bash featuring a golf tournament, spa treatments in posh hotels, and musical performances from Sheryl Crow, Earth Wind & Fire, and Chicago. Who paid? We did -- that's because Northern Trust took $1.6 billion in TARP money.
But from now on Northern Trust is going to have to use its own money if it wants to pamper its executives. Thanks to all the wonderful publicity it's received about its lavish spending, it has decided to pay back the $1.6 billion that it never wanted to take to begin with. And thanks to its excellent financial performance -- in the last year it generated $4.3 billion in revenues and $795 million in profit -- it never needed the money to begin with but Hank Paulson forced Northern to take it.
Morgan Stanley will still be the title sponsor for the June event but won't be booking lavish shows and providing expensive meals to VIPs.
Morgan Stanley hasn't provided much in the way of comment on the decision but then again, none is necessary. There's just no reason to waste taxpayer money and generate so much ill will to provide entertainment for people who worked at a company that lost billions of dollars.
I thought I had heard it all after banks that took TARP billions paid themselves $18 billion in bonuses after sinking the global financial system. But every time I think banks can't do more to shock me, they go and top themselves. That's what happened with Northern Trust (NASDAQ: NTRS), which took $1.6 billion in bailout money. To its credit, Northern Trust did not blow it all on bonuses -- instead it spent $6.3 million on a big LA party last week.
Why didn't I get my invitation? After all, I paid part of the tab. And so did you. What did our money go to? Here's a partial list:
Here are some highlights from this past week's earnings coverage from BloggingStocks:
- Advanced Micro Devices Inc. (NYSE: AMD) reported dismal Q4 results due to lower demand.
- AMR Corp. (NYSE: AMR) reported a bigger-than-expected Q4 loss, sending shares lower.
- Check Point Software Technologies Ltd. (NASDAQ: CHKP) earnings prospects led to an upgrade.
- eBay Inc. (NASDAQ: EBAY) posted Q4 and full-year results with increased revenue due to a stronger dollar.
- Google Inc. (NASDAQ: GOOG) reported strong Q4 numbers that beat analysts' expectations.
- International Business Machines Corp. (NYSE: IBM) reported better-than-expected Q4 and 2008 earnings.
- Lockheed Martin Corp. (NYSE: LMT) posted strong Q4 results but lowered its 2009 guidance.
- Northern Trust Corp. (NASDAQ: NTRS) shares surged after posting better-than-expected earnings.
- Regions Financial Corp. (NYSE: RF) reported a huge loss due to write-downs and offered a bleak outlook.
- Societe Generale said that it expects to have broken even in the final quarter of 2008.
- Southwest Airlines Co. (NYSE: LUV) posted its second straight quarterly loss due to fuel hedging costs.
- UAL Corp. (NASDAQ: UAUA) reported a huge loss on the erosion in value of oil hedges as prices dropped.
- Usana Health Sciences Inc. (NASDAQ: USNA) posted record Q4 results despite one-time charges.
For more highlights from this week, see Apple, Microsoft, GE, Johnson & Johnson, Harley Davidson and others
Here are today's unofficial closing bell levels:
Top Analyst Downgrades
General Electric Company (NYSE: GE) was hit again today on constant fresh rumors and concerns ahead of earnings, but the good news is that shares did manage to get back into positive territory in the last hour of trade as the market rallied. Shares were up less than 1% at $13.00 shortly before the closing bell.
Intel Corporation (NASDAQ: INTC) might have traded lower if the data was regarded in a vacuum. The company sent a memo to employees noting that it could in fact post a quarterly loss. That would be the first quarter in over 20 years that it lost money. Shares were up about 2% at $13.10 right before the close.
State Street (NYSE: STT) is recently trading at $24.30 in pre-open trading, below its close of $36.35. STT reported Q4 EPS of 15 cents on net income of $65 million, compared to net income of $223 million, or 57 cents per share in Q4 2007. STT February option implied volatility is at 88, February is at 84; above its 26-week average of 73, according to Track Data, suggesting larger price movement.
Bank of New York (NYSE: BK) is recently trading at $21.39 in pre-open trading, below its close of $23.36. BK is expected to report Q4 EPS on January 22. BK February option implied volatility of 87 is above its 26-week average of 69, according to Track Data, suggesting larger price movement.
Northern Trust (NASDAQ: NTRS) is recently down $4.58 to $46.50 in pre-open trading. NTRS is expected to report Q4 EPS on January 21. NTRS option implied volatility of 99 is above its 26-week average of 71, according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com