Analyst Upgrades

• Baird upgraded C.H. Robinson (CHRW) to outperform from neutral and has a $67 target on the stock. The firm upgraded shares citing growth opportunities given the capacity constrained environment.
• UBS upgraded Navistar (NAV) to buy from neutral, citing improved trucker preferences towards the company's engine technology.
• KeyBanc upgraded Crane (CR) to buy from hold based on valuation stabilization and potential upside in aerospace, among other reasons. The firm has a $39 target on the stock.
• United Therapeutics (UTHR) was upgraded to overweight from neutral at JPMorgan.
• Equifax (EFX) was upgraded to overweight from equal weight at Stephens.
• Brown & Brown (BRO) was upgraded to buy from hold at Citigroup.
  

Family Dollar (FDO - option chain) stock is trading lower today after the company announced this morning that it expects third-quarter earnings near the upper end of its original forecast of 71 to 76 cents per share, which would still be below analysts' forecasts of 77 cents per share. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on FDO.

This morning, FDO opened at $38.19. So far today the stock has hit a high of $42.07 and a low of $38.00. As of 1:10, FDO is trading at $38.49, down $1.60 (-4.0%). The chart for FDO looks neutral and S&P gives FDO a neutral 3 STARS (out of 5) hold ranking.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Alcoa Inc. (AA) received an analyst's downgrade ahead of its earnings report due to pricing pressures in 2011.
• American Eagle Outfitters Inc. (AEO) disappointing earnings guidance offset sales numbers to depress shares.
• Bed Bath & Beyond (BBBY) shares hit a new 52-week high after it reported strong Q4 results and offered guidance.
• Constellation Brands Inc. (STZ) posted a narrower net loss for Q4 and offered lower-than-expected guidance.

Family Dollar (FDO) did not disappoint Wall Street. For the second quarter, the discount chain said it made 81 cents per share against 60 cents per share in the second quarter of 2009. That was good for a 35% growth rate.

Even better, though, was the fact that management was able to beat the estimates. Analysts were looking for 78 cents per share on the bottom line. The gross margin rose from 33.7% to 35.4%. Same-store sales expanded by 3.6%.

Family Dollar Stores (FDO), a discount chain whose colleagues include Dollar Tree (DLTR) and Wal-Mart (WMT), is set to report second-quarter earnings on Wednesday. The question is, should a trader open a position before the numbers?

This is a really difficult one. According to Trey Thoelcke's data summary, analysts are expecting very good things from the retailer. Earnings may rise over 20% to 78 cents per share, while sales could increase just under 5%. Another positive element is the dividend payout: it was raised in January by 14.8%. You've got to take that as a sign of confidence on the part of the management team, right?

The so-called cruelest month has begun. And this coming week's economic calendar for the U.S. starts off with the ISM nonmanufacturer's survey results for April and NAR's pending home sales for February on Monday morning. This glimpse at the service and housing sectors will be followed by March's consumer credit numbers Monday afternoon. Then things are pretty quiet until Friday's release of factory orders and wholesale trade numbers for February.

Between the Monday and Friday economic numbers will come the release on Tuesday of the minutes of the March 16 FOMC meeting, a record of the Fed's most recent thinking on monetary policy.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Ark Restaurants Corp. (ARKR) shares declined after Q4 earnings fell short of consensus expectations.
• Azz Inc. (AZZ) Q3 net income fell more than expected but the company reaffirmed its earnings outlook.
• Bed Bath & Beyond Inc. (BBBY) reported strong Q3 results, sending shares to a new 52-week high.
• Best Buy Inc. (BBY) declined to lift its earnings forecast despite strong December sales, send shares lower.
• Constellation Brands Inc. (STZ) lower Q3 earnings topped expectations and revenue declined as well.

Family Dollar Stores (FDO) is a hot stock this afternoon. As of this writing, shares were up over 11% on monster volume. Investors loved the first-quarter numbers. I found them intriguing, too.

Sales increased almost 4%, with same-store sales registering a 2.4% expansion. Net income jumped over 16% to 49 cents per diluted share. According to our earnings preview, Family Dollar was supposed to do 47 cents. Gross margin improved; one of the driving factors for this improvement was a reduction in seasonal markdowns, something I find particularly encouraging, since avoiding markdowns should always be near the top of the list when it comes to advisable actions in retail operations. In addition, management reiterated its guidance for the full fiscal year. Taking everything in total, I think we can say that the retailer delivered a strong quarter, especially in the face of the tough holiday period.

Family Dollar Stores Inc. (FDO), the nation's number two dollar store chain, is scheduled to discuss its financial results for the first quarter of fiscal 2010 in a conference call Wednesday, Jan. 6, at 10:00 AM (ET). You can catch the live webcast of the call on the company's website.

During the three months that ended in November, Family Dollar made management changes, didn't get its day before the Supreme Court, and announced share buybacks. Analysts surveyed by Thomson Reuters are looking for the discount retailer to report earnings for the quarter of $0.47 per share, up from $0.42 per share in the same period of last year. Revenue for the period is expected to be 4.7% higher to $1.8 billion.

Analysts surveyed by Thomson Reuters expect for-profit education provider Apollo Group Inc. (APOL) to start of the new year right when it reports fiscal first quarter 2010 results this week. During the three months that ended in November, Apollo's subsidiary, Apollo Global, saw management changes and its University of Phoenix was recertified to participate in Title IV programs.

Apollo Group is expected to report that earnings rose 22.8% from a year ago to $1.45 per share. Revenue for the quarter is expected to total $1.2 billion, which is 25.9% higher than a year ago. So far, the forecast is for similar year-over-year growth of EPS and revenue in the second quarter. This Phoenix-based company has topped earnings estimates in the past five quarters, by as much as 13 cents per share.

Here are some highlights from last week's earnings coverage from BloggingStocks:

• Alcoa Inc. (NYSE: AA) reported a surprise Q3 profit due to cost cutting; revenue topped estimates as well.
• Avis Budget Group Inc. (NYSE: CAR) said a proposed offering of $250 million in notes could reduce earnings.
• Clorox Co. (NYSE: CLX) earnings prospects garnered it an upgrade from one analyst.
• Coca-Cola Co. (NYSE: KO) earnings prospects resulted in an upgrade from one analyst.
• Costco Wholesale Corp. (NASDAQ: COST) lower Q4 earnings topped analysts' expectations, lifting shares.
• Family Dollar Stores Inc. (NYSE: FDO) higher Q4 earnings beat analysts' estimates but sales were just OK.

Family Dollar Stores (NYSE: FDO), like Dollar Tree (NASDAQ: DLTR), is benefiting from the soft economy. Consumers love paying low prices, so they flock to these retail business models like moths to a flame. And judging by Family Dollar's Q4 report, people are still having a great time saving money.

Net income increased over 13% to 43 cents per share, which was two pennies higher than Wall Street's forecasts, according to our earnings preview. Unfortunately, sales weren't so great. Total sales went up 2.6%, and same-store sales saw a mere 1% gain. I would have expected higher growth in the comps metric.

Dollar Tree (NASDAQ: DLTR) reported a truly excellent quarter. The stats contained in the release are monumentally impressive. Dollar Tree increased sales almost 12% in Q2, a performance that essentially matched expectations. Per-share income soared 50% to 63 cents, beating estimates of 54 cents per share.

This is one of those situations where all the numbers point toward future growth. Margins increased, as did cash from operations (I enjoyed the fact that capital expenditures didn't go up too much). Same-store sales moved higher by 6.8%, and management's outlook for the rest of the fiscal year received a boost. And judging by the guidance, I'd say that Dollar Tree shares aren't overly expensive at the moment. Let's add a technical factor to go along with my opinion of the valuation: Dollar Tree closed Wednesday to the upside by well over 4% on the earnings news, not far at all from a 52-week high. The price action was accompanied by healthy volume.

Dollar Tree Stores Inc. (NASDAQ: DLTR), the nation's leading operator of dollar stores, is scheduled to discuss its second-quarter 2009 results tomorrow morning in a conference call at 9:00 AM ET. You can catch the live webcast of the call on the company's website.

In the three months that ended in July 31, Dollar Tree saw the retirement of a long-time board member. Analysts surveyed by Thomson Reuters expect the company to report that its earnings grew 22.2% from a year ago to $0.54 per share. Revenue for the quarter is expected to be 11.2% higher to $1.2 billion, in line with preliminary results. Analysts so far expect the third-quarter results to be about the same. The Chesapeake, Va.-based company has topped earnings expectations in recent quarters, by as much as six cents per share.

Canadian banks are scheduled to step into the earnings spotlight this week, with third-quarter reports coming from Bank of Montreal (NYSE: BMO), Bank of Nova Scotia (NYSE: BNS), Canadian Imperial Bank of Commerce (NYSE: CM), Royal Bank of Canada (NYSE: RY), and Toronto-Dominion Bank (NYSE: TD). While Canadian banks on the whole held up better than their U.S. counterparts during the financial crisis, these five are expected to report that their earnings are still declining in the most recent quarter.

Analysts surveyed by Thomson Reuters are looking for EPS for these banks to have fallen from 15% to 25% from a year ago. Their long-term EPS growth forecast is for between 10% and 12%, which is in the same range as U.S. rivals JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC), but better than Bank of America Corp. (NYSE: BAC) and Citigroup Inc. (NYSE: C). Earnings multiples for these Canadian banks are 10x to 12x, but none of them have a First Call consensus recommendation is to buy. The Motley Fool, though, considers TD as a value stock and RY a stock poised to pop. All of them are trading much closer to their 52-week highs than lows, and shares of all are up more than 100% since March lows.