MOST NOTEWORTHY: Host Hotels, Packeteer and France Telecom were today's noteworthy downgrades:
Deutsche Bank downgraded shares of Host Hotels (NYSE: HST) to Hold from Buy and lowered their target to $19 from $22.50 on a lack of near-term catalysts and industry headwinds. Note the firm also downgraded Sunstone Hotel Investors (NYSE: SHO), Strategic Hotels (NYSE: BEE) and DiamondRock Hospitality (NYSE: DRH) to Hold from Buy.
Merriman downgraded shares of Packeteer (NASDAQ: PKTR) to Neutral from Buy following the acquisition bid by Blue Coat Systems (NASDAQ: BCSI) as they are not expecting additional suitors to emerge.
ABN Amro cut France Telecom (NYSE: FTE) to Hold from Buy as they see increased risk from the company's acquisitions strategy.
OTHER DOWNGRADES:
Keefe Bruyette downgraded Capitol Federal (NASDAQ: CFFN) to Underperform from Market Perform.
Omnicell (NASDAQ: OMCL) was lowered to Neutral from Strong Buy at Broadpoint.
National City (NYSE: NCC) was downgraded at Bear to Underperform from Outperform.
MOST NOTEWORTHY: National City, Syntax Brillian and Medco Health were today's noteworthy upgrades:
Deutsche Bank upgraded shares of National City (NYSE: NCC) to Buy from Sell on valuation as they believe their $9.00 target is in-line with the company's franchise value.
Baird upgraded Syntax Brillian (NASDAQ: BRLC) to Outperform from Neutral based on recently announced strategic initiatives and valuation.
Jefferies upgraded shares of Medco Health (NYSE: MHS) to Buy from Hold as they believe the company's renewed PBM contract with United Healthcare (NYSE: UNH) removes a major overhang.
OTHER UPGRADES:
Friedman Billings raised Downey Financial (NYSE: DSL) to Market Perform from Underperform.
Volterra (VNASDAQ: LTR) was raised to Buy from Neutral at Piper.
Alliance Data (NYSE: ADS) was raised at JP Morgan to Overweight from Neutral.
Private equity firm Corsair Capital and several of the banks bigger shareholders are expected to inject over $6B into Cleveland regional bank National City Corporation (NYSE: NCC), the Wall Street Journal reported.
According to sources, the Financial Times reported that Bank of America Corporation (NYSE: BAC) is planning to sell a portion of its 9% stake in China Construction Bank in order to raise capital. However, Bank of America will offset some of the share sales by exercising options it holds to buy additional stakes in the bank at levels that are now well below market rates.
The UK Telegraph reported that the BBC is talking to private equity firms to join in a bid for Virgin Media Inc's (NASDAQ: VMED) Virgin Media Television, which owns a percentage of the UKTV content business that the BBC doesn't already own.
MOST NOTEWORTHY: Lululemon, National City and Devon Energy were today's noteworthy upgrades:
Thomas Weisel upgraded shares of Lululemon (NASDAQ:LULU) to Overweight from Market Weight as they believe the company's momentum continues following the strong results; the firm maintains a $43 target on shares.
Bear upgraded National City (NYSE:NCC) to Outperform from Underperform citing favorable risk/reward following reports is is considering a transaction with KeyCorp (NYSE:KEY).
JP Morgan raised Devon Energy (NYSE:DVN) to Overweight from Neutral citing solid organic growth with high rates of returns.
OTHER UPGRADES:
Micron (NYSE:MU) was upgraded at Goldman to Neutral from Sell.
Merrill raised eBay (NASDAQ:EBAY) to Buy from Neutral.
NCC announced on April 1 that its Board of Directors are reviewing a range of strategic alternatives for the company. NCC closed at $9.99.
RBC Capital says: "We would be surprised if the company will receive acceptable bids for the entire corporation considering its high exposure to higher risk assets."
NCC April option implied volatility of 122 is above its 26-week average of 57 according to Track Data, suggesting larger price fluctuations.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
The Financial Times reported that Lehman Brothers Holdings Inc (NYSE: LEH) yesterday said it had sent information to the SEC about possible abusive short-selling in its shares in recent days. Lehman CFO Erin Callan said the SEC was examining whether hedge funds collaborated to drive down the bank's share price in the days following the near collapse of The Bear Stearns Companies (NYSE: BSC).
Colombia's heavy oil area could hold 20B barrels of recoverable resources, the Financial Times reported, giving the country greater reserves than leading producers such as Mexico and Algeria, according to Colombia's government.
WEB SITES:
The Silicon Alley Insider reported that Douglas Merrill, Google Inc's (NASDAQ: GOOG) CIO, is leaving the company to become the president of music company EMI.
MOST NOTEWORTHY: Countrywide Financial, AstraZeneca, Massey Energy and International Coal were today's noteworthy upgrades:
Wachovia upgraded Countrywide (NYSE: CFC) to Market Perform from Underperform, as they do not expect any other bidders to emerge and for the acquisition by Bank of America (NYSE: BAC) to close.
HSBC upgraded AstraZeneca (NYSE: AZN) to Overweight from Neutral on valuation and their belief that an agreement with Ranbaxy on Nexium is possible.
Massey Energy (NYSE: MEE) and International Coal (NYSE: ICO) were upgraded to Neutral from Underweight at JP Morgan citing higher coal price forecasts.
National City (NYSE: NCC) volatility aggressive; shares trade at 15-year low as NCC is recently down $3.69 to $9.44.
NCC March 10 straddle is trading at $3.00. NCC April option implied volatility of 140 is above its 26-week average of 46 according to Track Data, suggesting larger price fluctuations.
TheStreet.com's Jim Cramer says we need Wilbur Ross to save someone's bacon to make this a healthier market all around.
Wilbur Ross, don't screw it up, we are all counting on you.
Yesterday it wasn't just the Fed cut that made the bank stocks rally. That mattered because it will help one portion of the banks' biggest woes: the lack of margin on their loans. Obviously, it also matters as a way to avoid a severe recession, which is why the retailers rallied.
But I believe what was even bigger than the rate cut for some of these banks was the possibility that we would not have another round of big losses, this time from a lack of insurance, because the grave dancing Wilbur Ross indicated he is choosing a bond insurer -- or bond insurers? -- to save with a big investment or takeover.
These companies just can't raise the capital on their own. Despite their endless protestations, even the limited disclosure they have given us doesn't give you much comfort that they can get their paws on the money themselves.
National City (NYSE: NCC) volatility Elevated; NCC sells off on EPS & loan exposure. NCC reported 3rd quarter 2007 net income of $106 million, or 18 cents per diluted share. Goldman Sachs says "turning NCC around is going to take time. Mortgage contributions are likely to remain depressed, while credit will remain an issue." NCC has a current dividend yield of 7.34%. NCC November option implied volatility of 45 is above its 26-week average of 31 according to Track Data, suggesting larger price fluctuations.
Fifth Third Bancorp (NASDAQ: FITB) volatility Elevated as FITB near 10-year low. FITB, headquartered in Cincinnati, is recently down $0.99 to $28.99. Smith Barney says "while FITB was going through its regulatory issues, it tried to offset by taking on more rate risk. One of our concerns has been that it was also taking more credit risk." FITB November option implied volatility of 38 is above its 26-week average of 27 according to Track Data, suggesting larger price risks.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
AMD October 14 straddle is priced at 90 cents. AMD November option implied volatility of 44 is near its 26-week average of 46 according to Track Data, suggesting non-directional price risks.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
MOST NOTEWORTHY: J.B. Hunt Transport (JBHT), Gold Fields (GFI), Anheuser-Busch (BUD), CBS Corp (CBS) and Amerigroup (AGP) were today's noteworthy upgrades:
Wachovia upgraded shares of J.B. Hunt Transport (NASDAQ: JBHT) to Outperform from Market Perform citing strength in the company's Intermodal franchise.
Matrix USA upgraded Gold Fields (NYSE: GFI) to Buy from Sell, citing the strong demand for gold jewelry from affluent customers in developing markets and investors.
AG Edwards upgraded Anheuser-Busch (NYSE: BUD) to Buy from Hold based on valuation and improving fundamentals.
CBS Corp (NYSE: CBS) was upgraded to Buy from Neutral at SMH Capital based on expectations for CBS to continue to increase its annual dividend 10% a year.
Jefferies is more confident in Amerigroup's (NYSE: AGP) ability to see further medical cost improvements in its GA market and it its TN expansion, upgrading shares to Buy from Hold...
OTHER UPGRADES:
Goldman upgraded Micron Tech (NYSE: MU) and Novellus Systems (NVLS) to Neutral from Sell.
CIBC raised Darden Restaurants (NYSE: DRI) to Sector Outperformer from Sector Performer.
BMO Capital upgraded National City (NYSE: NCC) to Market Perform from Underperform.
MOST NOTEWORTHY: General Motors (GM), Sirius Satellite Radio (SIRI), LSI Corp (LSI), Chevron (CVX), National City (NCC) and LivePerson (LPSN) were today's noteworthy upgrades:
Goldman Sachs upgraded General Motors (NYSE: GM) to Buy from Neutral as they believe the stock will rise on expectations of sizeable concessions from union talks. The broker said this is a "tactical trading call."
Morgan Joseph upgraded shares of Sirius Satellite Radio (NASDAQ: SIRI) to Buy from Hold citing the OEM ramp & modest consensus estimates.
American Technology added LSI Corp (NYSE: LSI) to their Focus List as they believe investors are discounting a lot of negative assumptions at the current valuation. They recommend using the recent weakness to aggressively build positions below $9.
Bank of America upgraded shares of Chevron Corp (NYSE: CVX) citing valuation and potential volume increases in its deepwater portfolio.
AG Edwards upgraded National City (NYSE: NCC) to Hold from Sell and Roth upgraded LivePerson to Hold from Sell on valuation...
MOST NOTEWORTHY: Chico's FAS (CHS), Cache, Inc (CACH), JPMorgan Chase & Co (JPM) and National City Corp (NCC) were today's noteworthy initiations:
Thomas Weisel started Chico's FAS (NYSE: CHS) with a Market Weight rating and $26 target citing near-term mix pressure, lower margin potential and lower square footage growth.
Thomas Weisel also initiated shares of Cache, Inc (NASDAQ: CACH) with an Overweight rating and $21 target, citing a significant sales opportunity driven by new categories and demographics.
AG Edwards believes the risk/reward for JP Morgan & Chase Co (NYSE: JPM) is balanced, assuming coverage with a Hold rating.
Lehman resumed coverage of National City Corp (NYSE: NCC) with an Overweight rating and $41 target...
MOST NOTEWORTHY: FedEx Corp (FDX), National City Corp (NCC), Sun Microsystems, Inc (SUNW) and M&T Bank Corp (MTB) were some of today's noteworthy downgrades:
FedEx Corp (NYSE: FDX) was downgraded to Hold from Buy at Citigroup and lowered their target to $120 from $132 to reflect expectations for slower earnings growth in the next few quarters combined with ongoing uncertainty on the timing of an economic recovery. The broker recommends putting new money into United Parcel Service, Inc (UPS).
AG Edwards cut National City Corp (NYSE: NCC) to Sell from Hold. The firm believes upside is limited at these levels and weak EPS growth trends are likely to put some pressure on National City's valuation.
Bernstein downgraded Sun Microsystems Inc (NASDAQ: SUNW) to Underperform from Market Perform, as checks indicate Q3 may be weaker than prior quarters and could disappoint given investors' high expectations.
Oppenheimer cut M&T Bank Corp (NYSE: MTB) to Sell from Neutral following the company's Q1 pre-announcement.
OTHER DOWNGRADES:
Jefferies downgraded Blackbaud, Inc (NASDAQ: BLKB) to Hold from Buy with a $25 target due to channel checks that suggested the company has not launched its new product Bulls Eye in Q1 with any major effort.
Stifel downgraded Deere & Co (NYSE: DE) to Hold from Buy, citing valuation, the potential overhang from the record corn crop/ethanol glut, seasonally normal crop prices and DE stock, sluggish construction and forestry results in the housing recession.
JP Morgan downgraded Kronos Inc (NASDAQ: KRON) to Neutral from Overweight based on its pending acquisition.
Stephens cut Sanderson Farms, Inc (NASDAQ: SAFM) to Equal Weight from Overweight based on valuation.
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MOST NOTEWORTHY: Host Hotels, Packeteer and France Telecom were today's noteworthy downgrades:
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National City
TheStreet.com's Jim Cramer says we need Wilbur Ross to save someone's bacon to make this a healthier market all around.
National City
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