Baird upgraded Optimer Pharm (NASDAQ: OPTR) to Outperform from Neutral and raised its target to $13 from $8 citing the decidedly positive data from the OPT-80 trial.
Banc of America upgraded Quest Diagnostics (NYSE: DGX) to Buy from Neutral on valuation and believes management has set expectations well.
Credit Suisse views Jacobs Engineering (NYSE: JEC) as a high quality name given the quality of management, execution track record, and relationship business model. Shares were upgraded to Outperform from Neutral.
Horizon Lines (NYSE: HRZ) was upgraded to Overweight from Equal Weight at Stephens.
Tyson Foods, Inc. (NYSE: TSN) reported, according to this source, a decent quarter in terms of bottom-line profit, but it wasn't enough to satisfy Wall Street. Sales rose almost 10% to $7.2 billion. And net income on an adjusted basis came in at $0.15 per share. That represented pretty good growth over last year's profit figure. But you know, it didn't really matter for two reasons. One, the call by the analyst community was for four more pennies. Two, guidance was not tasty at all. Management sees further pressures coming, and the aforementioned source mentions that the fulfillment of debt obligations is an issue.
A tough environment for chicken has been plaguing Tyson. Not only that, but a look at the company's press release shows that operational cash flow took a huge dive over the last twelve months, dropping roughly 58% to $288 million. There was no free cash for the year to support the dividend obligations. That isn't too encouraging.
The bottom line on Tyson, which competes with the also-struggling Pilgrim's Pride (NYSE: PPC), is that it isn't a buy, at least not from where I sit. I know there will be investors out there who will see some value in the situation, but I cannot, at least not at this time. No, I'm not saying that I think Tyson will disappear. However, there are better ideas out there if you're looking to play the supermarket game over a long-term basis. There's Procter & Gamble (NYSE: PG), Kraft (NYSE: KFT), and Campbell Soup (NYSE: CPB), to name some examples. As I write this, Tyson's stock is down over 11%. Might we see a bounce in the next few days? Sure. But I'm not brave enough to step in with this one.
Disclosure: I don't own any company mentioned; positions can change at any time.
Hormel Foods (NYSE: HRL) closed at $28.44 Tuesday. HRL is scheduled to report Q4 EPS on November 25. HRL overall option implied volatility of 41 is above its 26-week average of 30 according to Track Data, suggesting larger price movement.
Sanderson Farms (NYSE: SAFM) closed at $27.49 Tuesday. SAFM filed a $1 billion shelf registration for common and preferred shares on October 9 on the anticipation of using the proceeds to fund acquisitions. SAFM November option implied volatility of 91 is above its 26-week average of 58 according Track Data, suggesting larger price movement.
Pilgrim's Pride (NYSE: PPC), the largest chicken company in the U.S., closed at $1.40 Tuesday. PPC announced on October 27 lenders have agreed to provide continued liquidity under credit facilities. PPC December option implied volatility is at 239 according to Track Data, suggesting large price fluctuations.
Smithfield Foods (NYSE: SFD), a processor of packaged meats, closed at $9.49 Tuesday. SFD November option implied volatility of 166 is above its 26-week average of 88 according to Track Data, suggesting larger price movement.
Tyson (NYSE: TSN) closed $8.05 Tuesday. TSN is scheduled to report Q4 EPS on November 11. TSN November option implied volatility is at 133, December is at 124; above its 26-week average of 54 according to Track Data, suggesting larger price fluctuations.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Today was another tiring day. Stocks gapped down lower and then managed to spend most of the day fighting in negative and positive territory. The ISM data on manufacturing this morning was atrocious and the worst since after the 2001 terror attacks. The Senate is expected to vote on a bailout plan tonight.
Below are today's closing bell levels: DJIA 10,836.96 -13.70 -0.13% NASDAQ 2,069.40 -22.48 -1.07% S&P500 1,161.49 -4.87 -0.42% 10YR T-Bond 3.7680% -0.0590 52-week lows Top Analyst Upgrades Top Analyst Downgrades General Electric Co. (NYSE: GE) had been down much worse today after an analyst downgrade raised further liquidity concerns. Then the announcement came that it was selling $12 billion stock to the public and $3 billion in preferred to Warren Buffett. Shares were down 3.4% at $42.15 in today's final minutes.
Citigroup Inc. (NYSE: C) rose on further hopes of a Senate bailout package and on higher FDIC deposit limits. It is also expected to price $10 Billion in stock tonight. Shares were up 11.5% at $22.86 in the final minutes of the day.
Keefe Bruyette upgraded shares of AllianceBernstein (NYSE: AB) to Outperform from Market Perform as they find AB's risk/reward attractive given its attractive long-term business model. Wachovia upgraded Watson Pharma (NYSE: WPI) and Teva Pharma (NASDAQ: TEVA) to Outperform from Market Perform citing valuations and positive drivers for generics that include patent expirations and market share expansion.
UBS raised Lloyds TSB Group (NYSE: LYG) to Neutral from Sell on expected pricing power following the HBOS (OTC: HBOOY) acquisition.
Otter Tail (NASDAQ: OTTR) was upgraded to Outperform from Neutral at Baird.
GFI Group (NASDAQ: GFIG) was upgraded at Citigroup to Hold from Sell.
Merrill upgraded Logitech (NASDAQ: LOGI) to Neutral from Underperform.
Analyst downgrades:
JP Morgan downgraded shares of Lloyds TSB Group to Underweight from Neutral on capital concerns and believes the HBOS acquisition is not in the best interest of shareholders.
Stephens downgraded Universal Truckload (NASDAQ: UACL) to Equal Weight from Overweight on valuation and concerns about a slowdown in the flatbed sector. The firm's target remains $28.
Goldman upgraded shares of Novartis (NYSE: NVS) to Buy from Neutral as they believe the Alcon (NYSE: ACL) acquisition has diversified the company's business.
Tyson Foods (NYSE: TSN) was upgraded to Equal Weight from Underweight on valuation.
JP Morgan raised Albermarle (NYSE: ALB) to Overweight from Neutral.
BMO Capital upgraded Wynn Resorts (NASDAQ: WYNN) to Outperform from Market Perform.
Morgan Stanley downgraded Reynolds American (NYSE: RAI) to Underweight from Equal Weight based on the impact from Altria's (NYSE: MO) purchase of competitor UST (NYSE: UST), which may result in pricing pressure.
Goldman downgraded AstraZeneca (NYSE: AZN) to Sell from Neutral as they believe shares do not support near-term fundamentals.
Max Capital (NASDAQ: MXGL) was downgraded to neutral from Buy at Banc of America.
AudioCodes (NASDAQ: AUDC) was lowered at Merrill to Neutral from Buy.
Stock futures were trading down as Fannie Mae posted its fourth straight quarterly loss. Investors were awaiting word from a government report on worker productivity to see if there is any sign of an economic rebound. Those figures, though, proved disappointing.
Bloomberg News reported that worker productivity in the U.S. grew at a lower-than-expected rate in the second quarter as employers cut jobs to weather the jump in raw-material expenses. "Employers eliminated 165,000 jobs from April through June to shore up profits, and still managed to get more output with fewer workers," the news service says. "Gains in productivity help lower inflation and bolster the Federal Reserve's forecast that prices will moderate."
Fannie Mae (NYSE: FNM) posted its fourth straight quarterly loss and slashed its dividend. The second-quarter net loss was $2.3 billion, or $2.54 a share. Excluding one-time items, the loss was $2.51 a share, compared with the 72-cent average estimate of 10 analysts in a Bloomberg survey. Shares tumbled more than 12% in pre-market trading.
The internet was buzzing last week after an article in the Shelbyville (that's right, I said Shelbyville), Tenn. Times-Gazette reported that Tyson Foods Inc (NYSE:TSN) employees at the local poultry plant could take off the Muslim holiday Eid Al-Fitr, which celebrates the end of Ramadan, instead of Labor Day. As you might expect in year seven of our 'war' on terrorism, some readers went apoplectic at the thought of an American corporation granting a non-Christian holiday.
Now Tyson is in a full-court press to respond to the story, and I think the company deserves consideration. Its press release explains that the exchange affects only this plant, and was granted in response to a request from the Retail, Wholesale and Department Stores Union. Around 250 of its members are Somali immigrants, legally in the U.S. as political refugees, who work at the plant.
So the earnings crunch continues, and here's a look at some companies scheduled to report results this week that are anticipated to be big winners and losers in terms of earnings growth.
Analysts surveyed by Thomson Financial expect the following to report strong earnings growth when compared to the same period of the previous year.
Apache Corp. (NYSE: APA): $4.10 EPS (+53.9%) on revenue of $3.8 billion (+54.6%)
EOG Resources Inc. (NYSE: EOG): $2.34 EPS (+50.0%) on revenue of $1.7 billion (+62.2%)
Avon Products Inc. (NYSE: AVP): $0.47 EPS (+44.7%) on revenue of $2.6 billion (+11.5%)
This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.
Pilgrim's Pride's home roots in the small town of Pittsburg, Texas, perhaps explain why it is the largest chicken producer in the U.S., even ahead of competitor Tyson Foods, Inc. (NYSE: TSN) in Arkansas. In 1946, Lonnie "Bo" Pilgrim dressed like a standard Pilgrim and tucked a small chicken under his arm when completing orders for customers. He gave away free chicks when he sold chicken feed as a way to expand his market for chicken feed. As of today, Pilgrim's Pride operates chicken processing plants in 13 states and Mexico and processes 44 million chickens per week, resulting in 9 billion pounds of chickens per year and over 528 million chicken eggs per year.
Pilgrim's Pride's operations are almost exclusively located in the U.S. close to its farms, and it has become the second-largest chicken supplier to Mexico as well. It does have processing plants in Mexico and Puerto Rico. Along with such huge chicken-producing numbers come a few problems, as a huge product recall in 2002 due to Lysteria contamination killed seven people and made over 40 customers sick. In 2004, more than 24,000 hens were destroyed after a strain of avian flu was found in Hopkins County, Texas.
Pilgrim's Pride is still based in the same location where it was founded over 60 years ago, but today stands as a completely vertically-integrated company: it owns every process and facility from egg to table, as it says. Wal-Mart Stores Inc. (NYSE: WMT), Publix Super Markets (OTC: PUSH) and KFC, a division of Yum! Brands (NYSE: YUM) ,can be counted as some of Pilgrim's Pride's largest customers.
This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.
Like most big companies located in small towns, Tyson Foods (NYSE: TSN) has a delightfully quirky origin. John Tyson, owner of a battered truck and 500 chickens, opportunist, and debtor in the Depression-era 1930s struck an idea that probably seemed like folly to his neighbors: he'd deliver chickens to Chicago and Kansas City, where they'd get more money.
I'm sure for every story like Tyson's, there were 100 that didn't turn out so auspiciously. But in this tale, the hero comes back to his little Arkansas hometown with a profit and pays off his debts. He keeps on raising and selling birds in points north, eventually devising a plan to keep more of the profits by "vertically integrating" (I'll bet dollars-to-doughnuts he didn't call it that) and incubating his own chicks instead of buying them from a hatchery, as well as milling his own feed instead of buying it from a feed store.
This wasn't the end of Tyson's forethought. He bought a broiler farm in Springdale, Arkansas (beginning the company's history in that town) and started to cross-breed birds designed for meat production, instead of using heritage (or "pedigree") breeds.
TheStreet.com's Jim Cramer says we should watch them and Apache and Exxon -- these stocks will set the tone.
You can always gauge rotations when some company that really misses, as Colgate (NYSE: CL) (Cramer's Take) did with its gross margins the other day, can still take off after a momentary hit. You can also gauge rotations by how many times an Apache (NYSE: APA) (Cramer's Take) or an Exxon (NYSE: XOM) (Cramer's Take) will get hit on the same margins miss.
Make no mistake about it, the Exxon quarter was ugly, and the Apache quarter, after all the hoopla, was barely a beat. But both of those companies are making a ton of money and will one day work their way back -- APA before XOM, because XOM has underinvested in oil and overinvested in its stock.
But Colgate was just out-and-out pantsed by raw costs. They had good revenue growth but simply got more killed by food and oil ingredients than even Tyson (NYSE: TSN) (Cramer's Take), which was ground zero for ethanol madness.
Yet it snapped right back yesterday as if it didn't miss at all.
Stock futures got a boost this morning from a possible $22 billion deal as Buffett's Berkshire and Mars consider buying Wrigley. Also in on investors' mind is this week's Federal Reserve meeting and rate decision as well as oil nearing $120 a barrel again.
U.S. stocks finished mixed on Friday, with the Dow industrials rising 42 points, or 0.33%, and the S&P 500 up 9 points, or 0.65%. The Nasdaq composite, however, found itself in the red following a cautious outlook from Microsoft the day before, and finished the day down almost 6 points, or 0.25%.
Without much economic news today, investors will focus on the Federal Reserve Open Market Committee two-day meeting starting Tuesday. On Wednesday, Fed chairman Bernanke will announce the policy decided and most economist expect a quarter point rate cut, but also for the Fed to halt the cuts after that as inflationary pressures have been rising.
Also, attention will be on oil prices, which once again hit an all-time high of $119.93 a barrel Monday. A refinery strike closed a pipeline system that delivers a third of Britain's North Sea oil to refineries in the U.K. as well as supply outages in Nigeria have caused oil to climb again despite the strengthening dollar.
Another big new item this morning, and one that helped boost sentiment is that of Mars and Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) nearing a deal to buy chewing gum giant Wm. Wrigley Jr. (NYSE: WWY) for more than $22 billion, according to The Wall Street Journal and The New York Times. Wrigley, which has a market capitalization value of roughly $13.6 billion, is seeing its shares climbing over 23% in premarket trading.
PDUFA date for Genentech, Inc. (NYSE: DNA) and Roche Holding Ltd. (OTC: RHHBY)'s supplemental Biologics License Application for Herceptin for label expansion to include AC followed by docetaxel in treatment of adjuvant HER2+ breast cancer.
PDUFA date for Shire plc (NASDAQ: SHPGY) and New River Pharma's supplemental New Drug Application for Vyvanse (NRP-104) treatment of Attention Deficit Hyperactivity Disordre, or ADHD, in adult patients 18-55 years old; the drug is already approved for pediatric ADHD ages 6-12.
Verizon Communications Inc. (NYSE: VZ) to report Q earnings; conference call at 8:30am.
Tyson Foods, Inc. (NYSE: TSN) to report Q2 earnings; conference call at 9:00am.
Tuesday, April 29
Two-day FOMC meeting beginning at 8:30am.
PDUFA date for Merck & Co., Inc. (NYSE: MRK)'s New Drug Application for Cordaptive (MK-0524A) adjunctive therapy to diet for treating elevated LDL Cholesterol, low HDL Cholesterol and elevated triglycerides levels.
PDUFA date for Sucampo Pharmaceuticals, Inc. (NASDAQ: SCMP)'s supplemental New Drug Application for dose of 8mg treatment of Irritable Bowel Syndrome with Constipation; already approved for Chronic Idiopathic Constipation at 24ug dosage.
BP plc (NYSE: BP) to report Q1 earnings; conference call at 10:15am.
United States Steel Company (NYSE: X) to report Q1 earnings; conference call at 2:00pm.
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Today was another tiring day. Stocks gapped down lower and then managed to spend most of the day fighting in negative and positive territory. The ISM data on manufacturing this morning was atrocious and the worst since after the 2001 terror attacks. The Senate is expected to vote on a bailout plan tonight..gif){kind=logo}
The internet was buzzing last week after an article in the Shelbyville (that's right, I said Shelbyville), Tenn. Times-Gazette reported that 
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TheStreet.com's Jim Cramer says we should watch them and Apache and Exxon -- these stocks will set the tone.
Stock futures got a boost this morning from a possible $22 billion deal as Buffett's Berkshire and Mars consider buying Wrigley. Also in on investors' mind is this week's Federal Reserve meeting and rate decision as well as oil nearing $120 a barrel again. .gif){kind=logo}
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