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Analyst upgrades, downgrades and initiations: MU, DRIV, HELE, URBN, AKS...

Analyst upgrades:
  • Oppenheimer upgraded OceanFreight (NASDAQ:OCNF) to Perform from Underperform on valuation and a lack of negative catalysts following the recent weakness.
  • UBS raised Micron (NYSE:MU) to Buy from Neutral citing supply cuts which should improve prices. The target remains $5.
  • Jesup & Lamont upgraded Atlas Air (NASDAQ:AAWW) to Buy from Hold is positive on the company's 20 year blocked space agreement with DHL and expects the stock to continue higher.
  • AK Steel (NYSE:AKS) was added to Goldman's Conviction Buy List and upgraded to Buy from Neutral.
  • Goldman also upgraded Northern Trust (NASDAQ:NTRS) to Buy from Neutral.
  • Digital River (NASDAQ:DRIV) was upgraded to Hold from Sell at Stanford.
Analyst downgrades:
  • Stephens downgraded shares of Titan Machinery (NASDAQ:TITN) after their survey of farmers indicated declining sales of agricultural equipment. The firm lowered their target to $19 but believes Titan Machinery's long-term growth story remains intact.
  • Jefferies downgraded Helen of Troy (NASDAQ:HELE) and Blyth (NYSE:BTH) to Underperform from Hold as they believe the further deterioration in the U.S. consumer macro environment could pressure near-term results. The firm lowered its target on Helen of Troy to $13 from $16.50 and on Blyth to $5.50 from $8.
  • UBS cut Indevus (NASDAQ:IDEV) to Neutral from Buy and lowered its target to $5.50 from $5 following the acquisition offer by Endo Pharmaceuticals (NASDAQ:ENDP).
  • AECOM Tech (NYSE:ACM) was lowered to Equal Weight from Overweight at Morgan Stanley.
  • Amerisafe (NYSE:AMSF) was downgraded at Oppenheimer to Perform from Outperform.
  • Tractor Supply (NASDAQ:TSCO) was cut to Neutral from Buy at Piper Jaffray.
Analyst initiations:
  • KeyBanc initiated Urban Outfitters (NASDAQ:URBN) with a Buy rating and $22 target. The firm believes the Urban Outfitters and Antropologie divisions are under penetrated and have visible growth.
  • Kaufman Bros. started SuccessFactors (NASDAQ:SFSF) with a Hold rating and $7 target and believes the current demand backdrop could be worse than reflected in current consensus estimates.
  • CarMax (NASDAQ:KMX) was initiated at Baird with a Neutral rating and $10 target. The firm is impressed with CarMax's business model but does not see a way around the near-term economic headwinds.
  • Manulife Financial (NYSE:MFC) and Sunlife Financial (NYSE:SLF) were assumed with Equal Weight ratings at Morgan Stanley.
  • Oppenheimer started Pacific Sunwear (NASDAQ:PSUN) with a Perform rating.
  • Kite Realty Trust (NYSE:KRG) was initiated with a Buy rating at Janney Montgomery.

Analyst downgrades 6-11-07: AAI, UAUA and the REIT sector

MOST NOTEWORTHY: Airtran Holdings Inc (NYSE: AAI), UAL Corporation (NASDAQ: UAUA) and the REIT sector were today's noteworthy downgrades:
OTHER DOWNGRADES:

Kroger to Wal-Mart: Bring it on

The Kroger Co. (NYSE:KR), currently the largest independent grocery chain in the U.S., seems to be competing head-to-head with the likes of Wal-Mart Stores Inc. (NYSE:WMT) Supercenters with plenty of aplomb recently. The chain said that lower prices and increased customer service led to a 36% rise in profits from 2005 to 2006.

According to Kroger chairman David B. Dillon this week, the chain made changes in the face of 125 Wal-Mart Supercenters that opened up across the U.S. in 2006. The strategy must have worked based on how quickly it was implemented and Kroger's share price bumped to a 52-week high of $26.69 just this week as a result. Additionally, Kroger reported a 2006 EPS of $1.54 per diluted share -- up from $1.31 in 2005.

When Kroger's chairman stated that "The gains we have made in market share throughout the year indicate that Kroger continues to compete effectively in this challenging environment," I have to agree. Both Target Corp. (NYSE:TGT) in discount merchandise / grocery and Kroger in grocery competed very well in 2006 against retail behemoth Wal-Mart, with both chains delivering very decent same-store sales growth within 2006's final numbers.

A bombshell that I've written on many times (and have talked about to countless people) was confirmed by Kroger chairman Dillon, who stated that Kroger's strong same-store sales came from lower prices and consumers apparently turning away from independent grocers to shop at a neighborhood Kroger.

Symbol Lookup
IndexesChangePrice
DJIA+30.6910,464.40
NASDAQ+6.872,176.05
S&P 500+4.981,110.63

Last updated: November 26, 2009: 09:42 PM

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