- Leerink upgraded Genzyme (GENZ) to outperform from market perform due to valuation as it believes the sell-off on news of the consent decree is overdone.
- FBR Capital upgraded Progressive (PGR) to outperform from market perform to reflect an improving outlook. The firm raised its target price for shares to $23 from $18.
- Janney Montgomery upgraded Cheesecake Factory (CAKE) two notches to buy from sell, citing improving casual-dining sales trends. The firm has a $30 price target for shares.
- Research in Motion (RIMM) was raised to overweight from neutral at JPMorgan.
- Tata Motors (TTM) was upgraded to buy from hold at Deutsche Bank.
- Palm (PALM) was upgraded to market perform from underperform at BMO Capital.
- Sterne Agee upgraded American Public Education (APEI) to buy from neutral following the Q4 report and guidance. The firm has a $50 target on the stock.
- Jefferies upgraded Lamar Advertising (LAMR) to hold from underperform citing valuation and the improved ad market. The firm raised its target $30 from $22.
- Janney Montgomery upgraded Wilmington Trust (WL) to neutral from sell following the company's $250M stock offering and raised its target price on shares to $13 from $10.
- AeroVironment (AVAV) was upgraded to buy from neutral at SunTrust.
- Scripps Networks (SNI) was upgraded to overweight from equal weight at Barclays.
- TheKnot (KNOT) was raised to buy from hold at ThinkEquity.
- Citigroup upgraded Lubrizol (NYSE: LZ) to Buy from Hold on valuation as they believe economic weakness is already priced into the stock. Despite upgrading, Citigroup lowered their target price to $32 from $36.
- UBS believes AT&T (NYSE: T) consensus estimates are beatable and that the 7.1% dividend yield is safe. Additionally, the firm said a strike is possible when the unionized wireline employee contract expires on April 4th but expects the company to succeed in lowering healthcare benefits. Shares were upgraded to Buy from Neutral.
- Friedman Billings upgraded Adobe (NASDAQ: ADBE) to Market Perform from Underperform as they believe guidance appropriately reset expectations and that the risk/reward is neutral at current levels. The firm lowered their target price to $16 from $17. Shares were also upgraded to Buy from Hold at Jefferies after the Q1 results to reflect better-than-expected cost cuts and an attractive risk/reward at current levels.
- Lousiana Pacific (NYSE: LPX) was raised to Sector Outperformer from Sector Performer at CIBC.
- OmniVision (NASDAQ: OVTI) was upgraded at Baird to Neutral from Underperform.
- Baird upgraded Carlisle (NYSE:CSL) to Outperform from Neutral and lowered their target to $25 from $33 following the company's Q4 results citing attractive valuation and solid execution.
- Citigroup upgraded Talbots (NYSE:TLB) to Hold from Sell on valuation as they believe the company's cash flow is improving and does not expect the company to face bankruptcy in next three years.
- Jefferies upgraded shares of Spectra Energy (NYSE:SE) to Hold from Underperform on valuation following the company's Q4 results and raised their target price to $15 from $11.75.
- Costco (NASDAQ:COST) was upgraded to Buy from Neutral at UBS.
- AU Optronics (NYSE:AUO) and LG Display (NYSE:LPL) were upgraded to Buy from Neutral at Banc of America/Merrill.
- Alpha Natural (NYSE:ANR) was raised to Buy from Hold at Natixis.
- Oppenheimer assumed coverage of Sohu (NASDAQ:SOHU) and upgraded shares to Outperform from Perform as they believe the company is better positioned in an uncertain economy. The firm thinks strength in online games could lead to EPS upside and raised their target to $61 from $53.
- Allegiant (NASDAQ:ALGT) was upgraded to Buy from hold at Jesup & Lamont on valuation following the recent weakness.
- Suntrust upgraded Prosperity Bancshares (NASDAQ:PRSP) to Buy from Neutral based on valuation. The firm maintains a $30 target on shares.
- LaBranche (NYSE:LAB) was upgraded to Buy from Sell at Goldman.
- AU Optronics (NYSE:AUO) was raised to Overweight from Neutral at HSBC.
- Core Laboratories (NYSE:CLB) was upgraded to Overweight from Neutral at JP Morgan.
- Jefferies downgraded shares of BPZ Resources (AMEX:BPZ) to Underperform from Hold as they believe the decline in oil prices and the uncertain credit markets has placed considerable pressure on the company's operations in northwest Peru. The firm maintains a $5 target on the stock.
- UBS downgraded StatoilHydro (NYSE:STO) and Repsol SA (NYSE:REP) to Neutral from Buy as they expect 2009 to be a difficult year for European oil and gas companies.
- Bernstein downgraded Heinz (NYSE:HNZ) to Market Perform from Outperform and lowered their target to $42 from $62 citing foreign exchange impact and commodity pressures.
- Blackstone Group (NYSE:BX) was downgraded to Underweight from Overweight at Barclays.
- Siemens (NYSE:SI) was lowered to Neutral from Buy at Banc of America/Merrill.
- Pride International (NYSE:PDE) was cut to Underweight from Neutral at JP Morgan.
- Kaufman Bros. believes GT Solar's (NASDAQ:SOLR) equipment orders are at a bottom and that shares are undervalued. Shares were initiated with a Buy rating and $7 target.
- Jefferies assumed L-1 Identity (NYSE:ID) with a Buy rating and $11 target. The firm believes concerns over the company's sensitivity to government budget priorities and elevated levels of debt are overdone.
- JP Morgan (NYSE:JPM) was started at Keefe Bruyette with a Market Perform rating and $30 target. Keefe Bruyette sees limited catalysts for the stock as they expect credit headwinds and subdued investment banking revenues to persist over the near-term.
- Legg Mason (NYSE:LM) and T. Rowe Price (NASDAQ:TROW) were initiated with an Equal Weight rating at Barclays.
- Electronic Arts (NASDAQ:ERTS) was initiated at Janney Mongtomery with a Neutral rating.
- Friedman Billings reinitiated U.S. Bancorp (NYSE:USB) with an Underperform rating and $17 target.
- Piper Jaffray downgraded shares of Motorola (NYSE: MOT) to Sell from Neutral after their June channel checks indicated continued market share losses in the company's North American handset business.
- Keefe Bruyette downgraded shares of MF Global (NYSE: MF) to Market Perform from Outperform on the anticipated dilutive effect of the company's convertible offerings.
- Friedman Billings downgraded Acorda Therapeutics (NASDAQ: ACOR) to Market Perform from Outperform citing valuation.
- Xyratex (NASDAQ: XRTX) was downgraded to Neutral from Outperform at Baird and to Market Perform from Outperform at Wachovia.
- Goldman downgraded the U.S. Financial Sector and Consumer Discretionary Sector to Underweight from Neutral. Goldman removed Nucor (NYSE: NUE) from the Conviction Buy List.
- Merrill downgraded AU Optronics (NYSE: AUO) to Neutral from Buy.
Technology sector specialist Mark Mowrey sees upside in two stocks poised to benefit from increased LCD TV sales. Here, the editor of The Prudent Speculator TechValue Report looks at AU Optronics (NYSE: AUO) and Corning (NYSE: GLW).
"Showing big gains in the world of video, LCD TV panel maker AU Optronics reported revenue of $4.5 billion in its first quarter, marking a 12.1% quarter-over-quarter decline that seemed to square with normal seasonality, even as it was negatively affected by the weaker U.S. dollar.
"Earnings thus came in at $1.12 per U.S. ADR, vastly improved from the loss of $0.02 per ADR in the same quarter last year. Looking forward, management says sales of TVs yet have not been impacted by the slowdown, though they are cautiously watching the markets for signs of weakness.
"Pleased with the positive report, we remain buyers of the shares, which trade at just about 6 times the consensus average for earnings per ADR now showing on Reuters Estimates.
- Jefferies initiated AU Optronics (NYSE: AUO) with a Buy rating and $25 target and believes LCD trends will be healthy in 2008 despite a soft economy.
- General Steel (NYSE: GSI) shares were started at Merriman with a Buy rating, as the firm believes strong demand for steel in China should last for years and finds the valuation attractive at current levels.
- Cantor believes Sequenom (NASDAQ: SQNM) is positioned to establish sustainable market leadership as a provider of genome analytical products and molecular diagnostics. Shares were assumed with a Buy rating and $12 target.
- UBS upgraded legacy airline stocks based on the recent pullback in the group. The firm upgraded Continental Airlines (NYSE: CAL) and Delta (NYSE: DAL) to Buy from Neutral and AMR Corp. (NYSE: AMR) to Neutral from Sell.
- CIBC upgraded shares of LDK Solar (NYSE: LDK) to Sector Performer from Sector Underperformer following a meeting with management as they have greater visibility on polysilicon supply for 2008 as well as comfort that average sales price declines will be lower than previously expected in 2009.
- Lehman upgraded shares of AU Optronics (NYSE: AUO) to Overweight from Equal Weight after raising the Asia Display industry to Positive from Neutral.
After hitting a one-year low of $18.12 in January, the stock hit a one-year high of $27.25 in July. GLW opened this morning at $24.34. So far today the stock has hit a low of $24.03 and a high of $24.41. As of 11:20, GLW is trading at $24.31, up 38 cents (1.6%). The chart for GLW looks neutral and improving, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating.
For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $20 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 13.6% return in just 5 months as long as GLW is above $20 at May expiration. Corning would have to fall by more than 17% before we would start to lose money.
GLW hasn't been below $20 since last January and has shown support around $23 recently. This trade could be risky if consumer spending on luxury items like LCDs tails off in the coming months, but even if that happens, this position could be protected by the support the stock might find around $22, where it bounced in November.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in GLW or AUO.
- Fortress Investment Group (NYSE: FIG) was initiated with a Hold rating and $18.50 target at Jefferies. The firm expects near-term volatility given the increasingly difficult private equity market.
- Banc of America assumed coverage of ITT Educational Service (NYSE: ESI) with a Buy rating and $130 target and believes the recent weakness creates an attractive entry point as they see continued margin expansion and upside to Street estimates.
- Susquehanna expects Kendle International (NASDAQ: KNDL) to benefit from positive trends in the Clinical Research Organization industry, expanded customer base and geographical reach, integration of Charles Rivers Laboratories (NYSE: CRL), and backlog. The firm started shares with a Positive rating.
- China Security & Surveillance (NYSE: CSR) was initiated with an Overweight rating and $30 target at Lehman.
- Morgan Stanley started Akamai Technologies (NASDAQ: AKAM) with an Equal Weight rating and $39 target.
- Goldman resumed coverage of AU Optronics (NYSE: AUO) and Clorox (NYSE: CLX) with Neutral ratings.
- HSBC upgraded AU Optronics (NYSE: AUO) to Overweight from Neutral following the company's Q2 results.
- Jefferies raised RightNow Technology (NASDAQ: RNOW) to Buy from Hold, believing low expectations have created a buying opportunity and that fundamentals remain intact.
- Citigroup upgraded Nordstrom (NYSE: JWN) to Buy from Hold on valuation; they consider the recent pullback a buying opportunity.
- Citigroup upgraded Gap (NYSE: GPS) to Buy from Hold from valuation and expects for better execution and cost savings in 2008 under the new CEO.
- Credit Suise upgraded Old Dominion Freight Line (NASDAQ: ODFL) to Outperform from Neutral on valuation...
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