Soleil upgraded Alcoa (NYSE:AA) to "hold" from "sell", according toBriefing.com. The news service also reports that Citigroup upgraded Peabody Energy (NYSE:BTU) to "buy" from "hold".
D.A. Davidson raised it price target on Talbots (NYSE:TLB) from $7.50 to $12.50, according to the AP.
Douglas A. McIntyre is an editor at 247wallst.com.
MOST NOTEWORTHY: H&R Block, Talbots and SunPower were today's noteworthy upgrades:
Oppenheimer believes H&R Block (NYSE: HRB) has shown several catalysts over the past few months, most importantly the sale of its mortgage business. The firm, which upgraded shares to Outperform from Perform, believes the company's strong 2008 tax season will lead to future growth, and they think the stock can appreciate 20%+, as catalysts are not yet fully reflected in the stock.
Friedman Billings upgraded Talbots (NYSE: TLB) to Outperform from Market Perform as they believe the company has several sources of cash to avoid a liquidity crisis, charge card EPS contribution provides good visibility, improved merchandise margins, and better merchandising.
Credit Suisse raised SunPower (NASDAQ: SPWR) to Outperform from Neutral citing strength in Italy and other geographies.
OTHER UPGRADES:
Agco (NYSE: AG) was raised at Wachovia to Outperform from Market Perform.
UBS upgraded Metso Oyg (OTC: MXCYY) to Buy from Neutral.
JMP Securities upgraded SanDisk (NASDAQ: SNDK) to Market Perform from Underperform.
Stifel upgraded eBay (NASDAQ: EBAY) to Buy from Hold.
Talbots Inc. (NYSE: TLB) shares are trading higher today after the company affirmed its 2008 earnings forecast. TLB expects to earn an adjusted profit between 47 and 52 cents per share, above analysts' estimates of 41 cents per share. 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 TLB.
After hitting a one-year high of $26.10 in August, the stock hit a one-year low of $6.48 in January. TLB opened this morning at $9.05. So far today the stock has hit a low of $8.76 and a high of $9.05. As of 11:20, TLB is trading at $8.91, up $0.60 (7.2%). The chart for TLB looks bearish and improving slightly.
For a bullish hedged play on this stock, I would consider a November covered call at the $7.50 level. A covered call is an options position that combines the purchase of stock with the sale of call 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 an 17.2% return in just five and a half months as long as TLB is above $7.50 at November expiration. Talbots would have to fall by more than 27% before we would start to lose money. Learn more about this type of trade here.
First quarter results for apparel retailers reporting earnings on Wednesday were mixed, as consumers continue to scale back their spending.
Talbots Inc. (NYSE: TLB) first-quarter profit dropped 69% to 3 cents per share, hurt by noncore operations and restructuring charges. Same-store sales fell 9.8% during the quarter, and revenue fell 5% to $542.4 million, which missed the estimates of analysts polled by Thomson Financial. Shares rose 6% Wednesday to $7.88.
Hot Topic Inc. (NASDAQ: HOTT) first-quarter loss widened to 3 cents per share due to a 2.8% drop in same-store sales. Revenue rose 1.1% to $159 million. Analysts had expected a loss of 4 cents per share on $159.3 million in revenue. Shares fell 13 cents, or 2.6%, to $4.84.
Tween Brands Inc. (NYSE: TWB) first-quarter profit declined on a hefty charge, but results still topped Wall Street expectations. Adjusted earnings per share were 21 cents, and revenues rose to $251.7 million. Analysts had expected 16 cents in earnings per share and sales of $242 million. Total same-store sales decreased 1%. Shares fell more than 10% to $19.20, but rebounded 7.5% in after-hours trading.
TheStreet.com's Jim Cramer says the good stuff out there -- and there's a lot of it -- will keep us going up.
How high can we go? That's pretty much the only question worth asking after you put in a bottom, as we did after the Bear Stearns (NYSE: BSC) (Cramer's Take) collapse.
Nobody's talking about a new bull market. But let me give you some thoughts about what has happened in the past few weeks to make it so that you could become more positive.
First, we went down so much because the systemic risk in the biggest part of the S&P, the financials, was overwhelming. It is why we "overcorrected" because the market feared -- and shorts pressed their bets -- that the following institutions could go under: Bear Stearns, Washington Mutual (WM) (Cramer's Take), Wachovia (WB) (Cramer's Take) -- yes, Wachovia, because of the miserable buy of what turned out to be a really reckless lender, Golden West -- Lehman Brothers (LEH) (Cramer's Take), Merrill Lynch (MER) (Cramer's Take), Citigroup (C) (Cramer's Take), National City (NCC) (Cramer's Take), Capital One (COF) (Cramer's Take) and even Wells Fargo (WFC) (Cramer's Take). Fannie (FNM) (Cramer's Take) and Freddie (FRE) (Cramer's Take), too.
The Volatility Index for S&P 500 Options is up six cents to $23.41. The 10-day moving average is $23.65 as the markets speculate if recession will be mild, moderate or deep.
Talbots Inc. (NYSE: TLB) volatility suggests large risk as shares near record 14-year low. TLB is recently down 10 cents to $7.12.TLB February option implied volatility of 92 is above its 52-week average of 39 according to Track Data, suggesting large risk.
Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
December is a critical month for retailers - the holiday season is the busiest shopping time, and a large chunk of bottom-line profits is booked in the final month of the calendar year. In 2006, December sales accounted for about 15% of all sales for the retailing sector. But December 2007, as many were predicting, may be one of the worst Decembers this decade.
Tomorrow, same-store sales for this critical month will hit the Street and the International Council of Shopping Centers (ICSC) is expecting an overall gain of 1% among stores open at least a year. This is below the ICSC's earlier estimate of 1.5% and compares to a year-ago jump of 3.3%. If this estimate is on the nose, it will be the sector's worst December since 2002.
There are many reasons that the holiday-shopping season was a slow one: rising food and fuel costs, the credit market breakdown, continued housing woes. And because of all these reasons, many retailers were forced to offer sale prices and additional incentives to lure cautious customers into the stores. These discounts obviously pressured the bottom line.
TheStreet.com's Jim Cramer says it's still too early to get contrarian about the universal negativity on retail.
Squeeze?
DuPont (NYSE: DD) (Cramer's Take) better than expected. Countrywide (NYSE: CFC) (Cramer's Take) puts up numbers that don't seem bankruptish. We could have a day's respite from the gloom. We certainly are owed one, at least in Nasdaq land.
Plus, when you go out with people from the trading desks, you are overwhelmed by the negativity.
Last night at a buy-side/sell-side dinner, a smart guy I know who loves the short side tried to make a case for some down-and-out airlines and retailers. He's a price guy, meaning that he believes everything has a price and that you have to start looking at a Lowe's (LOW) here or a Macy's (M) because if you start buying now, put some on, you will be getting a pretty decent risk-reward ratio.
I thought people were going to throw things at him. He was immediately ridiculed as someone who didn't understand what's out there, the collapse of consumer spending as evidenced by Brinker's (NYSE: EAT) (Cramer's Take) Chili's, AT&T (NYSE: T) (Cramer's Take), Family Dollar (NYSE: FDO) (Cramer's Take) and all of the other usual suspects Tuesday.
MOST NOTEWORTHY: Air France, Eli Lilly, Merrill Lynch, Wal-Mart and GlaxoSmithKline were today's noteworthy downgrades:
Goldman removed shares of Air France (NYSE: AKH) from its Conviction Buy List due to the increase in the price of fuel and the possibility of an economic slowdown.
The firm also removed Eli Lilly (NYSE: LLY) from the list after the company suspended two studies of its anti-clotting drug. The company was also downgraded to Equal Weight from Overweight at Morgan Stanley.
UBS downgraded shares of Merrill Lynch (NYSE: MER) to Neutral from Buy as it believes the company's exposure to problem asset classes will remain under pressure and possibly lead to further write-downs. UBS lowered its Q4 estimate to $1.12 from $1.18 and 2008 estimate to $7.00 from $7.85. Shares were also downgraded at Wachovia to Market Perform from Outperform. The firm sees increased risk to the MER story given expected pressure on compensation to keep people, speculation around turnover in senior ranks, and the ability to retain and motivate people. Additionally, the firm sees further risk to MER's exposure to ABS, CDOs and sub-prime asset declines.
Rochdale downgraded shares of Wal-Mart Stores (NYSE: WMT) to Hold from Buy citing lack of catalysts from the company's two-day analyst meeting.
WestLB downgraded shares of GlaxoSmithKline (NYSE: GSK) to Sell from Add to reflect the company's growth prospects in Q4 and 2008.
MOST NOTEWORTHY: Motorola, Paccar, Pacific Sunwear, Talbots and RightNow Tech were today's noteworthy upgrades:
Oppenheimer upgraded shares of Motorola Inc. (NYSE: MOT) to Buy from Neutral on valuation, and is positive on the company's free cash flow generation.
Wachovia raised Paccar Inc. (NASDAQ: PCAR) estimates to Market Perform from Underperform based on better-than-expected European performance.
Citigroup upgraded shares of Pacific Sunwear (NASDAQ: PSUN) to Buy from Hold as they believe the demo division divestiture and improving product execution in core PacSun stores could drive accelerating EPS growth.
Citigroup also upgraded shares of Talbots Inc. (NYSE: TLB) to Hold from Sell on valuation but remains concerned about the company's long-term outlook.
Roth Capital upgraded RightNow Technologies (NASDAQ: RNOW) to Buy from Hold, as they are encouraged by RNOW's Q3 results and raised guidance and believes the worst is behind the company.
OTHER UPGRADES:
Goldman added Pfizer (NYSE: PFE) to its Conviction Buy List.
Thomas Weisel upgraded Akamai (NADAQ: AKAM) to Overweight from Market Weight.
Lehman upgraded Harley Davidson (NYSE: HOG) to Equal Weight from Underweight.
MOST NOTEWORTHY: HSBC Holdings, AstraZeneca, Syneron Medical, Talbots, BankUnited and First Fed Financial were today's noteworthy downgrades:
UBS downgraded shares of HSBC Holdings(NYSE: HBC) to Neutral from Buy on valuation, rising customer defaults and slower growth at the company's the U.S. consumer-finance unit.
UBS also downgraded AstraZeneca (NYSE: AZN) to Sell from Neutral, as they believe the company faces major risks from drug approvals, competition and lawsuits.
Merriman downgraded shares of Syneron Medical (NASDAQ: ELOS) to Neutral from Buy following the company's Q3 earnings preannouncement due to near-term margin erosion and growth drivers that remain four quarters away.
CIBC downgraded shares of Talbots (NYSE: TLB) to Sector Performer from Outperformer as they believe 2H07 expectations are too high given the current weakness in the Missy space.
Friedman Billings downgraded BankUnited (NASDAQ: BKUNA) to Market Perform from Outperform and FirstFed Financial (NYSE: FED) to Underperform from Market Perform based on credit trends that are eroding faster than anticipated.
OTHER DOWNGRADES:
Merrill downgraded JMP Group (NYSE: JMP) to Neutral from Buy.
Baird downgraded Cabela's (NYSE: CAB) to Neutral from Outperform.
MOST NOTEWORTHY: VMWare, Validus Holdings and Hologic were today's noteworthy initiations:
VMWare Inc (NYSE: VMW) was initiated by a host of firms: Banc of America believes the current valuation captures most of the upside potential, and started shares with a Neutral rating and $75 target. Wachovia started shares with a Market Perform rating and Deutsche Bank started shares with a Hold rating and $80 target on valuation. The stock was also started with a Buy rating and $92 target at UBS, with a Buy rating and $100 target at Citigroup and with an Overweight rating at JP Morgan and with a Neutral rating at Merrill Lynch.
Validus Holdings (NYSE: VR) was started with a Buy rating and $29 target at UBS on valuation and benefits from the Talbots (NYSE: TLB) acquisition. Shares were also initiated at JP Morgan with a Neutral rating.
CIBC resumed coverage of Hologic Inc (NASDAQ: HOLX) with a Sector Outperformer rating and $77 target as the firm is positive on Hologic's merger with Cytyc Corporation (NASDAQ: CYTC) and views it as one of the top mid-cap stories in the coming year.
OTHER INITIATIONS:
B. Riley initiated shares of EuroBancshares (NASDAQ: EUBK) with a Buy rating and $10 target.
Rodman resumed coverage of Ziopharm Oncology Inc (NASDAQ: ZIOP) with a Market Outperform rating and $8 target.
Citigroup started shares of Timken Company (NYSE: TKR) with a Buy rating and $43 target.
MercadoLibre Inc (NASDAQ: MELI) was initiated with a Sector Perform rating and $39 target at RBC Capital.
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MOST NOTEWORTHY: H&R Block, Talbots and SunPower were today's noteworthy upgrades:
Talbots Inc. (NYSE: TLB) shares are trading higher today after the company affirmed its 2008 earnings forecast. TLB expects to earn an adjusted profit between 47 and 52 cents per share, above analysts' estimates of 41 cents per share. 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 TLB.
TheStreet.com's Jim Cramer says the good stuff out there -- and there's a lot of it -- will keep us going up.
The Volatility Index for S&P 500 Options is up six cents to $23.41. The 10-day moving average is $23.65 as the markets speculate if recession will be mild, moderate or deep.
December is a critical month for retailers - the holiday season is the busiest shopping time, and a large chunk of bottom-line profits is booked in the final month of the calendar year. In 2006, December sales accounted for about 15% of all sales for the retailing sector. But December 2007, as many were predicting, may be one of the worst Decembers this decade. 
MOST NOTEWORTHY: Air France, Eli Lilly, Merrill Lynch, Wal-Mart and GlaxoSmithKline were today's noteworthy downgrades:.gif){kind=logo}
MOST NOTEWORTHY: HSBC Holdings, AstraZeneca, Syneron Medical, Talbots, BankUnited and First Fed Financial were today's noteworthy downgrades:.gif){kind=logo}
MOST NOTEWORTHY: VMWare, Validus Holdings and Hologic were today's noteworthy initiations:
MOST NOTEWORTHY: Eaton Vance (EV), American Woodmark (AMWD), Deutsche Bank (DB) and Talbots (TLB) were today's notable downgrades: 
Cramer on BloggingStocks: Paulson and Bernanke step up to the plate
Google's $1.7 billion YouTube deal going down the tubes?
Before the bell: Futures lower as oil rises, despite Alcoa earnings
