Jefferies upgraded shares of Akamai (NASDAQ: AKAM) to Buy from Hold on valuation, as they see a long-term buying opportunity following the recent correction. The firm maintains a $29 target.
Moody's (NYSE: MCO) was upgraded to Overweight from Underweight at Lehman.
Boyd Gaming (NYSE: BYD) was upgraded to Neutral from Underperform at Merrill Lynch.
Analyst downgrades:
Jefferies downgraded shares of Nortel Networks (NYSE: NT) to Hold from Buy on concerns about the company's ability to hit expectations and drive margin expansion in the face of an eroding CDMA revenue stream. The firm lowered their target to $7.25 from $11.
B. Riley cut Charlotte Russe (NASDAQ: CHIC) to Neutral from Buy on concerns about how well the company can perform with the interim management team, especially in light of the current retail environment. The firm lowered their target to $14 from $17. Roth Capital downgraded shares to Sell from Hold to reflect the management uncertainty and lowered their target to $9 from $14.
Goldman cut Warner Music (NYSE: WMG) to Sell from Neutral and Deere (NYSE: DE) to Neutral from Buy.
Analyst initiations:
Banc of America expects top-line growth at Amgen (NASDAQ: AMGN) to be driven by Denosumab and for investors to look to the stock for biotech exposure following the potential acquisition of Genentech (NYSE: DNA). The firm started shares with a Buy rating and $70 target.
Sirius Satellite (NASDAQ: SIRI) was initiated at JP Morgan with a Neutral rating.
MOST NOTEWORTHY: PetSmart, Banco de Chile and Xerium Technologies were today's noteworthy upgrades:
JP Morgan upgraded PetSmart (NASDAQ: PETM) to Overweight from Neutral citing the company's position in a relatively strong category, benefits from food inflation, and margin improvements.
Deutsche Bank upgraded shares of Banco de Chile (NYSE: BCH) to Buy from Hold as they expect greater earnings power following the acquisition of Citibank Chile.
Citigroup upgraded Xerium Tech (NYSE: XRM) to Buy from Hold on the success of the company's debt renegotiation. The firm also raised the company's target to $7 from $2.
MOST NOTEWORTHY: Google, Boyd Gaming and Microsoft were today's noteworthy initiations:
Kaufman Bros. believes Google (NASDAQ: GOOG) has "only begun to scratch the surface" of its local market opportunity. Shares were assumed with a Buy rating and $680 target.
Banc of America believes Boyd Gaming (NYSE: BYD) will face financing challenges with its Echelon resort, and initiated shares with a Sell rating and $14 target.
Lehman reinstated Microsoft (NASDAQ: MSFT) with an Equal Weight rating and $34 target based on peaking Vista/Office 2007 cycles, uncertain online strategy, and increased investment.
OTHER INITIATIONS:
Goldman started AON Corp. (NYSE: AOC) with a Neutral rating.
Broadpoint initiated Covanta (NYSE: CVA) with a Buy rating and $32 target.
MOST NOTEWORTHY: RF Micro Devices, Western Digital and Boyd Gaming were today's noteworthy downgrades:
Jefferies downgraded shares of RF Micro Devices (NASDAQ: RFMD) to Hold from Buy to reflect the continued softness in the China Market after Asian channel checks suggested the March quarter will be weak.
Citigroup downgraded shares of Western Digital (NYSE: WDC) to Hold from Buy, as they believe the HDD industry is nearing a cyclical peak. They also view the likelihood of consolidation as less likely given the current conditions.
Boyd Gaming (NYSE: BYD) was lowered to Neutral from Add at Calyon following its Q4 report.
Boyd Gaming(NYSE:BYD) calls active on renewed & unconfirmed buyout chatter. BYD is recently up $0.68 to $43.37. BYD has a market cap of $3.7 billion with long term debt of $2.1 billion. BYD had quarterly June 2007 revenues of $511 million. BYD call option volume of 3,763 contracts compares to put volume of 105 contracts. BYD October option implied volatility of 38 is above its 26-week average of 34 according to Track Data, suggesting larger price risk.
Dreamworks(NYSE:DWA) calls active on unconfirmed buyout chatter: 'Bee Movie' out 11/2. DWA is recently up $0 .10 cents to $32.95. Unconfirmed buyout chatter is circulating today. Goldman Sachs said on 9/19 "we continue to rate DWA Buy as we believe the four films of 2007/2008 will raise investors' perception of normalized earnings." The Bee Movie is expected to be released on 11/2. DWA October 35 calls have traded 47 times on transaction volume of 897 contracts above its open interest of 344 contracts. DWA October option implied volatility of 36 is above its 26-week average of 30 according to Track Data, suggesting larger price risk.
Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
Trump Entertainment Resorts Inc (NASDAQ: TRMP), Donald Trump's casino company, this morning said that following a three-month search, it would conclude its strategic review. Although it has held talks since March with groups of investors that included former Trump Taj Mahal manager Dennis Gomes and Boyd Gaming Corporation (NYSE: BYD), the company said the offers it has received "weren't likely to lead to a transaction."
It seems a little strange that Trump Entertainment couldn't find a buyer, particularly because the market for casinos and their assets is hot. Recent examples of casino sector activity include the in-process $17B acquisition of Harrah's Entertainment Inc (NYSE: HET) and the announced $6.1B acquisition of casino and racetrack operator Penn National Gaming Inc (NASDAQ: PENN) by Fortress Investment Group LLC (NYSE: FIG), a U.S. hedge fund and private-equity firm.
What gives? Why hasn't Trump found a buyer? Sources have speculated that its casinos, located in Atlantic City, NJ, have been struggling in comparisons to Las Vegas "entertainment destinations," a partial smoking ban and competition from new gaming venues in Pennsylvania and New York. Additionally, the announcement that the company would end its efforts to sell comes weeks after CEO James Perry said he would retire and, effective yesterday, would be replaced by COO Mark Juliano.
Trump's Atlantic City casinos are still working on a $250M project to update its gaming floors and add new restaurants, although it hasn't seemed to help. The company posted losses in earnings per share loss and revenue when it reported Q1 results in May. The Trump Taj Mahal Casino Resort, its largest casino, with 786 rooms, is set to open next summer.
The casino company said that while it was ending the initiative to sell the company, it would continue to review other strategic alternatives, including a cost cutting effort. The company laid off Chief Information Officer Virginia McDowell and executive vice president of design and construction, Paul Keller. It doesn't plan to fill these positions.
Amazing. Amazon.com Inc (NASDAQ: AMZN), that big online retailer, sees the flix for the net. The shares keep rising for the online DVD rental company-up about 15%, highest since January-- even if their discs do come a little scratched. More than that though is while new subscribers are coming on; it's not exactly going gangbusters. Still, 6.8M is a whole lot of subscribers. Will Amazon, or someone else, overpay?
Which came first: The ongoing takeover rumors or the higher stock price? Or was it that Dell Inc (NASDAQ: DELL) is said to be after Rackable, a provider of servers and storage products for high density data center deployments. Rack it up.
Word is that this real estate investment trust will look for a sale, combo or merger. They said the venerable firm of Friedman, Billings, Ramsey & Co. will help them "explore strategic alternatives." Then the stock went up.
Dennis Gomes, whose name surfaced in March, is a one time gaming exec and regulator. He's signed a confidentiality agreement to have a look see at the firm's Atlantic City casinos. Separately, Las Vegas' Boyd Gaming Corporation (NYSE: BYD) has also been mentioned as a possible contender.
The CEO of this Kansas-based transportation service provider has been quoted as saying that a takeover is possible. An LBO is likely. This week the shares have actively been trading up.
MOST NOTEWORTHY: Dell (DELL), Boyd Gaming (BYD) and OmniVision Tech (OVTI) were today's noteworthy upgrades:
Dell Inc. (NASDAQ: DELL) was upgraded to Buy from Hold at AG Edwards to reflect the strong April quarter results.
Boyd Gaming Corp. (NYSE: BYD) was upgraded to Outperform from Market Perform at Wachovia due to ongoing improvement in the locals business through revenue growth and cost reductions, expected benefits at Borgata from the summer season, and a new hotel tower at the property.
OmniVision Technologies Inc. (NASDAQ: OVTI) was upgraded to Buy from Hold at American Technology and to Buy from Neutral at Merriman to reflect the company's improved revenue and gross margin outlook.
OTHER UPGRADES:
Universal Compression Partners (NASDAQ: UCLP) was upgraded to Buy from Hold at AG Edwards, as the firm believes the potential for additional asset acquisitions creates likely upside to estimates.
UBS upgraded shares of Norsk Hydro (NYSE: NHY) to Buy from Neutral and shares of Lear (LEA) to Neutral from Reduce.
Cowen upgraded VistaCare Inc. (NASDAQ: VSTA) to Outperform from Neutral and added shares to the firm's Focus List. Cowen believes the company's decision to review strategic alternatives will unlock value.
Matrix USA upgraded shares of Whole Foods Market Inc. (NASDAQ: WFMI) to Sell from Strong Sell based on valuation.
CHLM upgraded shares of 3D Systems Corp. (NASDAQ: TDSC) to Accumulate from Neutral.
Cantor upgraded shares of NMS Communications Corp. (NASDAQ: NMSS) to Buy from Hold on potential restructuring benefits.
MOST NOTEWORTHY: Three food companies, TiVo Inc (TIVO), Circuit City Stores, Inc (CC) and AutoZone, Inc (AZO) were today's most noteworthy downgrades:
Deutsche Bank downgraded Groupe Danone (NYSE: DA), Unilever (NYSE: UL) and Nestle (OTC: NSRGY) to Hold from Buy as the firm believes the three food producers will suffer from rising prices for agricultural commodities.
SMH Capital downgraded shares of TiVo (NASDAQ: TIVO) to Sell from Hold on valuation as the firm believes the market has already priced in considerable penetration of the new TIVO/Comcast bundled DVR into Comcast's (CMCSK) core digital sub base.
Matrix downgraded Circuit City Stores (NYSE: CC) to Strong Sell from Hold as the firm believes increasing competition is leading to lower selling prices and decreasing profits.
BMO Capital cut AutoZone (NYSE: AZO) to Underperform from Market Perform on expectations that higher gas prices will be a drag on discretionary product sales...
MOST NOTEWORTHY: Novartis AG (NVS), Barnes & Noble, Inc (BKS), Altria Group (MO) and Advanced Micro Devices (AMD) were some of today's more notable upgrades:
Credit Suisse upgraded Novartis AG (NYSE: NVS) to Neutral from Underperform on valuation and the approval of its drug Tekturna.
Merrill Lynch upgraded shares of Barnes & Noble, Inc (NYSE: BKS) to Neutral from Sell on valuation.
Deutsche Bank believes the recent weakness in Altria Group (NYSE: MO) presents a buying opportunity given the potential to unlock value, upgrading shares to Buy from Hold.
JMP Securities upgraded shares of Advanced Micro Devices Inc (NYSE: AMD) to Market Outperform from Market Perform following checks that indicate the company's next-generation "Barcelona" quad-core server chip and next-generation low-power mobile PC processor chip is exhibiting excellent power, performance, scalability, and price/performance characteristics at key OEM customers.
OTHER UPGRADES:
ThinkEquity upgraded Microchip Technology Inc (NASDAQ: MCHP) to Accumulate from Source of Funds following the company's improved guidance.
Morgan Stanley upgraded Eni SpA (NYSE: E) to Equal-Weight from Underweight as they believe management made it clear that the dividend is sustainable and a large-scale acquisition is not forthcoming.
JP Morgan upgraded Deutsche Telekom AG (NYSE: DT) to Neutral from Underweight citing management's new focus on customer service and expectation's for modest growth for the upgrade.
AG Edwards upgraded Anheuser-Busch Companies Inc (NYSE: BUD) to Buy from Hold.
Morgan Joseph upgraded Boyd Gaming Corp (NYSE: BYD) to Buy from Hold based on key markets the company operating in and its diversification.
Bernstein upgraded Cablevision Systems Corp (NYSE: CVC) upgraded to Outperform from Market Perform.
MOST NOTEWORTHY: Embarq Corp (EQ) and Boston Scientific Corp (BSX) were today's most notable downgrades:
Goldman Sachs downgraded Embarq Corp (NYSE: EQ) to Sell from Neutral based on valuation and potential margin dilution.
Boston Scientific Corp (NYSE: BSX) was downgraded to Peer Perform from Outperform at Bear Stearns based on regulatory and competitive challenges.
OTHER DOWNGRADES:
Despite expectations of strong Q4 results and 2007 guidance, Needham downgraded Garmin Ltd (NASDAQ: GRMN) to Hold from Buy based on valuation, as they believe the multiple the market is willing to give the stock is likely to decline as PNDs continue to increase as a percentage of revenue.
Roth Capital downgraded China BAK Battery Inc (NASDAQ: CBAK) to Hold from Buy.
DA Davidson downgraded Weyerhaeuser Co (NYSE: WY) to Neutral from Buy.
BMO Capital Markets downgraded Brady Corp (NYSE: BRC) to Market Perform from Outperform.
Wachovia downgraded Boyd Gaming Corp (NYSE: BYD) to Market Perform from Outperform, expecting weakness in 2007 from the Las Vegas locals market and Atlantic City.
Penn National Gaming Inc (NASDAQ: PENN) was downgraded to Hold from Buy at Deutsche Bank citing valuation.
MOST NOTEWORTHY: The Gaming sector and CBS Corp (CBS) were the most notable companies on today's initiation list.
Prudential initiated the Gaming sector with a Favorable rating,
They initiated Boyd Gaming Corp (NYSE: BYD), Town Sports International Holdings (NASDAQ: CLUB), Penn National Gaming (NASDAQ: PENN), Shuffle Master Inc (NASDAQ: SHFL), Steiner Leisure Ltd (NASDAQ: STNR) and Great Wolf Resorts Inc (NASDAQ: WOLF) with Outperform ratings.
Ameristar Casinos Inc (NASDAQ: ASCA), MGM Mirage (NYSE: MGM) and WMS Industries Inc (NYSE: WMS) were initiated with Neutral ratings.
Underweight ratings were given to International Game Tech (NYSE: IGT), Isle of Capri Casinos Inc (NASDAQ: ISLE), Life Time Fitness Inc (NYSE: LTM), Pinnacle Entertainment Inc (NYSE: PNK) and Trump Entertainment Resorts Inc (NASDAQ: TRMP).
UBS initiated CBS Corp (NYSE: CBS) with a Buy rating and $38 target, citing valuation, dividends and buybacks.
OTHER INITIATIONS:
Nollenberger believes International Rectifier Corp (NYSE: IRF) is the way to play the trend for energy efficiency, initiating the company with a Buy rating and $60 target.
Goldman Sachs resumed coverage of AT&T Inc (NYSE: T) with a Buy rating and Level 3 Communications inc (NASDAQ: LVLT) with a Neutral rating.
Stanford started EDO Corp (NYSE: EDO) with a Hold rating and $25 target; the firm believes EDO can be a turnaround story in 2007, but they recommend investors to stay on the sidelines until after Q4 earnings given their concerns over the quarter and guidance.
MOST NOTEWORTHY: Fortune Brands (FO) and Altria Group (MO) were today's more notable downgrades:
JP Morgan downgraded Fortune Brands (NYSE: FO) to Neutral from Overweight on valuation and the weak outlook for home and hardware sales.
Altria Group (NYSE: MO) was downgraded by Deutsche Bank to Hold from Buy with a $95 target, citing its valuation, ex-Kraft, is more in line with its tobacco peers.
OTHER DOWNGRADES:
CheckPoint Software Tech (NASDAQ: CHKP) was downgraded to Underperform from Market Perform with a $19 target at Freedman Billings, with expectations that 2007 will be a difficult transition year.
Matrix USA downgraded shares of Boyd Gaming (NYSE: BYD) to Hold from Buy on valuation.
Goldman Sachs downgraded TRW Automotive Hldg (NYSE: TRW) to Sell from Neutral and was added to the America's Sell List; they believe rising costs, a less favorable product mix and commercial steering business headwinds will weigh on revenue growth and margins in 2007.
MOST NOTEWORTHY: MasterCard (MA), American Express (AXP), Boyd Gaming (BYD) and Overstock.com (OSTK) were the most notable companies on the initiation list today:
Keefe Bruyette initiated MasterCard Inc. (NYSE:MA) with an Underperform and an $88 target, citing valuation, and American Express Co. (NYSE:AXP) with an Outperform rating and $72 target;
Coverage of Boyd Gaming Inc. (NYSE:BYD) was resumed with a Buy rating and $67 target, as the firm believes the company's assets are undervalued and investors will look at Boyd as a potential candidate to go private;
Overstock.com Inc. (NASDAQ:OSTK) was initiated with a Sell rating and $14 target at First Albany.
OTHER INITIATIONS:
BMO Capital initiated Harley-Davidson Inc. (NYSE:HOG) with a Market Perform and $70 target on valuation.
Susquehanna initiated The Knot Inc. (NASDAQ:KNOT) with a Positive rating, citing the recent buyback and cash infusion; the firm says Knot has an opportunity to capitalize on the growing value of quality online content and favorable sector trends.
Scientific Games Corp. (NASDAQ:SGMS) was initiated at Bear Sterns with a Peer Perform rating, citing valuation.
MOST NOTEWORTHY: Texas Instruments (TXN) was the only notable upgrade today:
JP Morgan upgraded shares of Texas Instruments (NYSE:TXN) to Overweight from Neutral after the mid-quarter update, as they believe margins are bottoming.
OTHER UPGRADES:
Raymond James upgraded Applebee's International Inc. (NASDAQ:APPB) to Market Perform from Underperform.
Buckingham Research upgraded Boyd Gaming Corp. (NYSE:BYD) to Accumulate from Neutral with a $55 target.
Matrix USA upgraded PetSmart Inc. (NASDAQ:PETM) to Hold from Sell based on increasing sales and valuation.
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