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.
As the second quarter earnings crunch begins in earnest this week, the bear market has investors jittery and prognosticators spinning out dire warnings. In the wake of mixed results from Alcoa (NYSE: AA) and General Electric (NYSE: GE) kicking things off last week, here's a look at what Wall Street is expecting from many of the companies scheduled to report this coming week.
Analysts surveyed by Thomson Financial are expecting the following companies to report a rise in earnings when compared to the same period of the previous year.
Nucor Corp. (NYSE: NUE): $1.80 EPS (36.6%) on sales of $6.4 billion (+53.0%)
Google Inc. (NASDAQ: GOOG): $4.74 EPS (24.9%) on sales of $3.9 billion (+41.6%)
Nokia Corp. (NYSE: NOK): 56 cents EPS (23.2%) on sales of $19.9 billion (+17.8%)
CSX Corp. (NYSE: CSX): 90 cents EPS (21.1%) on sales of $2.9 billion (+12.8%)
Altera Corp. (NASDAQ: ALTR): 27 cents EPS (18.5%) on sales of $346.7 million (+8.4%)
IBM (NYSE: IBM): $1.82 EPS (+17.6%) on sales of $25.9 billion (+9.0%)
eBay Inc. (NASDAQ: EBAY): 41 cents EPS (17.1%) on sales of $2.2 billion (+18.0%)
Sherwin-Williams (NYSE: SHW) shares are trading higher today after the Rhode Island Supreme Court overturned a $2.4 billion ruling against SHW and two other former lead-paint producers that would have ordered the companies to inspect and clean thousands of homes built before 1980 that were likely to contain lead paint. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on SHW.
After hitting a one-year high of $73.96 last July, the stock hit a one-year low of $45.89 yesterday. SHW opened this morning at $48.29. So far today the stock has hit a low of $45.82 and a high of $48.86. As of 11:55, SHW is trading at $47.36, up $1.43 (3.1%). The chart for SHW looks bearish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.
For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $40 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 7.5% return in just seven weeks as long as SHW is above $55 at August expiration. Sherwin-Williams would have to fall by more than 15% before we would start to lose money. Learn more about this type of trade here.
MOST NOTEWORTHY: Full House Resorts, Starent Networks and Capital Trust were today's noteworthy initiations:
Morgan Joseph said Full House Resorts Inc.'s (AMEX: FLL) valuation does not reflect the present value of its tribal management contract with the FireKeepers Casino. Shares were initiated with a Buy rating and $3.50 target.
Starent Networks Corporation (NASDAQ: STAR) was assumed with an Overweight rating at Thomas Weisel. The firm said STAR offers a compelling risk/reward profile given strong gross margins and expanding operating margins.
Keefe Bruyette initiated Capital Trust Inc. (NYSE: CT) with a Market Perform rating and $30 target, and believes the expected deterioration of commercial real estate fundamentals is likely to remain a headwind for valuations of the shares.
MOST NOTEWORTHY: WuXi Pharma, ExxonMobil and LifePoint Hospitals were today's noteworthy upgrades:
Jefferies upgraded shares of WuXi Pharma (NYSE: WX) to Buy from Hold as they believe the risk/reward is much improved following the recent weakness. They think the company's 2008 guidance is achievable.
Credit Suisse raised ExxonMobil (NYSE: XOM) to Outperform from Neutral as they believe the rise in crude oil means analyst estimates are too low.
Goldman sees upside to hospital stocks given low valuations and expectations. The firm upgraded LifePoint Hospitals (NASDAQ: LPNT) to Buy from Neutral and named it a top pick along with previous top pick Cardinal Health (NYSE: CAH).
OTHER UPGRADES:
Goldman added NDS Group (NASDAQ: NNDS) to their Conviction Buy List and upgraded shares to Buy from Neutral.
Morgan Stanley raised Boeing (NYSE: BA) to Overweight from Equal Weight.
3M's adjusted fourth-quarter profit exceeded Wall Street expectations even though earnings fell from year-ago results, which included a one-time gain. Net income was $851 million, or $1.17 per share, compared to $1.18 billion, or $1.57 per share, in the year-ago period. Excluding a charge of $12 million, or 2 cents per share, profit rose to $1.19 per share. Analysts surveyed by Thomson Financial had expected earnings of $1.17 per share.
Sales rose 7% to $6.21 billion from $5.78 billion last year, and beat analyst estimates of $6.14 billion. For the year, profit rose 11% to $4.1 billion, or $5.60 per share, from $3.95 billion, or $5.06 a share, in 2006. Annual revenue rose 7% as well, to $24.5 billion from $22.9 billion in 2006.
Shares rose .75% on Tuesday to close at $78.02. Shares had fallen to a 52-week low of $72.05 last week.
Sherwin-Williams Co. (NYSE: SHW) is engaged in the manufacture, distribution, and sale of paint, coating and other related products. SHW is recently up $0.95 to $65.68 on unconfirmed buyout chatter. SHW has a market cap of $8.5 billion with long term debt of $292 million. SHW call option volume of 8,040 contracts compares to put volume of 328 contracts. SHW October option implied volatility of 36 is above its 26-week average of 28 according to Track Data, suggesting larger risk.
Take-Two Interactive Software(NASDAQ: TTWO), an interactive entertainment software game developer, is recently up 33 cents to $17.26. Activist shareholders have been involved in TTWO over the last eleven-months. Unconfirmed and renewed buyout chatter is circulating about TTWO this morning. TTWO call option volume of 2,199 contracts compares to put volume of 225 contracts. TTWO call option implied volatility is at 52; puts are at 61 near its 26-week average of 55 according to Track Data, suggesting non-directional risk.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
This week, Vonage Corp's (NYSE:VG) stock plummeted because a federal judge issued an injunction against the company regarding a patent dispute with Verizon Communications Inc. (NYSE:VZ).
Yes, litigation can be harsh on investors. And, usually companies disclose their legal risks in their SEC disclosures. For example, Vonage disclosed its Verizon litigation in its IPO filing.
As for investors, these disclosures don't really matter much. After all, most companies have litigation. And, even legal experts have difficulties determining the probabilities of a case.
Well, Barron's [a paid service] has an interesting article on the topic for this week's issue. The main focus of the article is the analysis of Nick Rodelli, who is the legal guru with the Center for Financial Research and Analysis.
For example, he thinks the World Wrestling Entertainment (NYSE:WWE) could get a nice bump in revenues if it wins some of its litigation on licensing.
On the other hand, he is concerned about the impact of antitrust litigation on MasterCard Inc. (NYSE:MA) and thinks the stock price has not reflected the risk. He also considers this to be the same situation with Sherwin-Williams Co. (NYSE:SHW). The company faces litigation regarding the sale of lead paint many years ago.
Rodelli thinks that it is common for investors to misprice stocks when factoring in litigation. And, this inefficiency is actually an opportunity for investors -- although, it requires quite a bit of expertise to pull it off.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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Analyst upgrades:
As the second quarter earnings crunch begins in earnest this week, the bear market has investors jittery and prognosticators spinning out dire warnings. In the wake of mixed results from 
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Sherwin-Williams Co.
This week, Vonage Corp's (NYSE:
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