Friedman Billings believes Aeropostale (NYSE:ARO) has an impressive back-to-school floorset and that momentum should carry into the fall. Additionally, the firm, which initiated shares with an Outperform rating and $38 target, expects the company to buyback shares.
Thomas Weisel believes ImClone (NASDAQ:IMCL) is attractively valued as Erbitux is positioned to capitalize on a number of label-expanding opportunities and that concerns of KRAS-related revenue loss in colorectal cancer and the clinical utility of FLEX lung cancer data are overstated. Shares were assumed with an Overweight rating and $50 target.
Credit Suisse downgraded Nokia (NYSE:NOK) from "outperform" to "neutra", according toBriefing.com. The news service also reports that Bernstein upgraded Bristol-Myers (NYSE:BMY).
McAfee (NYSE:MFE) was started as "outperform" at R.W.Baird, according to Briefing.com. The financial website also reports that Motorola (NYSE:MOT) was started as "underperform" at Credit Suisse.
Shares of Internet security company McAfee Inc. (NYSE: MFE) have been tumbling after the company reported yesterday after the market closed that its first-quarter profit slipped 27%, hurt by higher expenses related to product development and marketing. The world's second-largest security software maker also slashed its full year earnings guidance, prompting investors to pull the stock down in morning trading.
McAfee said its profit dropped during the first quarter to $31.6 million, or 19 cents per share, compared with $43.4 million, or 27 cents per share reported in the same period a year ago. Excluding one-time items, the company's earnings would have come at 43 cents per share, missing analysts' predictions for a profit of 45 cents per share in the quarter.
The second-biggest maker of security software did post a respectable growth of 17% for its first-quarter revenue which jumped to $370 million. This was above analysts' predictions for quarterly revenue of $352 million, according to Reuters Estimates. However, McAfee's operating costs during this period also increased to $226 million.
MOST NOTEWORTHY: Enterprise Software Sector, NewMarket and Great Plans Energy were today's noteworthy initiations:
Stanford believes Software companies could be better positioned to withstand an economic slowdown than most believe, but feels demand is positioned to slow in 2008. They are "somewhat cautious" on the sector and initiated coverage of Microsoft (NASDAQ:MSFT) and McAfee (NYSE:MFE) with Buy ratings and Symantec (NASDAQ:SYMC) with a Hold rating.
Oppenheimer initiated NewMarket (NYSE:NEU) with an Outperform rating and $68 target, as they believes it is an underfollowed specialty chemical company with improving fundamentals and low investor expectations. They think the company's free cash flow could fuel large share buybacks and strategic acquisitions.
Great Plains Energy (NYSE:GXP) was started with an Outperform rating at Wachovia, as they are positive on the company's strong rate base growth and valuation.
MOST NOTEWORTHY: Stryker, General Dynamics and Garmin were today's noteworthy upgrades:
Baird upgraded shares of Stryker (NYSE: SYK) to Outperform from Neutral as they believe the company's manufacturing problems are more manageable than expected and that supply constraints involving the Trident acetabular cup appear more limited.
Wachovia raised General Dynamics (NYSE: GD) to Outperform from Market Perform, citing valuation, likely resumption in buybacks, and conservative guidance.
Oppenheimer upgraded shares of Garmin (NASDAQ: GRMN) to Outperform from Perform on valuation, as they believe sentiment has troughed and that downward revisions are already priced into shares.
OTHER UPGRADES:
Merrill raised Turkcell (NYSE: TKC) to Buy from Neutral.
Lehman upgraded HealthSouth (NYSE: HLS) to Overweight from Underweight.
Bear Stearns upgraded McAfee (NYSE: MFE) to Outperform from Peer Perform.
MOST NOTEWORTHY: Harley-Davidson, JP Morgan Chase and AMBAC were today's noteworthy downgrades:
Citigroup downgraded shares of Harley-Davidson (NYSE: HOG) to Sell from Hold and lowered their target to $36 from $51 on expectations for sluggish U.S. retail sales in Q4. They expect U.S. retail sales to decline 10%-12% in the quarter.
JP Morgan (NYSE: JPM) was lowered to Perform from Outperform at Oppenheimer, citing the company's dramatic increase in consumer losses.
AMBAC (NYSE: ABK) was downgraded to Market Perform from Outperform at William Blair following news of the company's expected loss and CEO departure, given the lack of visibility.
OTHER DOWNGRADES:
Adobe (NASDAQ: ADBE) and McAfee (NYSE: MFE) Were downgraded to Neutral from Buy at UBS.
Lehman downgraded Decode Genetics (NASDAQ: DCGN) to Underweight from Equal Weight.
Oppenheimer downgraded Wells Fargo (NYSE: WFC) to Perform from Outperform.
Boeing (NYSE: BA) was upgraded by Bernstein from Market Perform to Outperform. However, Boeing said this morning, PrivatAir has ordered an additional 787-model airplane for $162 million.
Adobe Systems (NASDAQ: ADBE) and McAfee (NYSE: MFE) were downgraded from Buy to Neutral by UBS.
Harley Davidson (NYSE: HOG) was downgraded by Citigroup from Hold to Sell. Shares down over 4% in premarket trading.
Intel Corp. (NASDAQ: INTC) was downgraded by Charter Equity from Buy to Market Perform.
Oppenheimer downgraded JPMorgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) from Outperform to Perform.
Piper Jaffray downgraded Jones Soda (NASDAQ: JSDA) from Buy to Neutral. Shares down over 3% in premarket trading.
Friedman Billings, with its Outperform rating on Alcoa (NYSE: AA), lowered the aluminum maker's target price from $38 to $35.
Altria (NYSE: MO)'s target price was upped to $88 from $79 by Credit Suisse, which rates the stock Outperform.
TD Ameritrade Holding Corp. (NASDAQ: AMTD) reported a 65% rise in its fiscal first-quarter net income as trading activity increased and asset-based revenue continued to grow. The company reported $240.8 million net income, or 40 cents per share, beating estimates by a penny. AMTD shares are up 4% in premarket trading.
MOST NOTEWORTHY: Research in Motion, Virgin Mobile, VMWare, and McAfee were today's noteworthy initiations.
Research in Motion (NASDAQ:RIMM) was initiated with an Overweight by Thomas Weisel, which thinks the company has one of the strongest growth profiles among large-cap tech stocks.
Virgin Mobile (NYSE:VM) was initated with an Overweight by Thomas Weisel, which cited the company's strong global brand and low cost base.
Pacific Crest initiated VMWare (NYSE:VMW) with a Sector Perform based on the company's thin float and competitive risks.
McAfee (NYSE:MFE) was reinstated with a Buy by Deutsche Bank, which believes the company is one of the best positioned security vendors due to its comprehensive security platform.
OTHER INITIATIONS:
Thomas Weisel initiated Palm (NASDAQ:PALM) with a Market Weight rating.
Today's news that two software giants SAP (NYSE: SAP) and McAfee (NYSE: MFE) are expanding their R&D centers in Israel, points to the continued superiority of Israeli technology. Coupled with news that foreign investment in Israel jumped to $1.25 billion for October -- the biggest number since March -- it shows that international investors are still intrigued by Israeli ingenuity.
SAP increasing its Israeli exposure may be an indication that it may make an acquisition. Retalix (NASDAQ: RTLX) has been mentioned in the past as a potential SAP target. Retalix automates and synchronizes retail, distribution and supply chain operations for stores, headquarters and warehouses, and has made strong inroads into China.
While Israeli Hi-tech M&A has sagged this year, I would look to a revival in early '08.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC and Senior Editor of IsraelNewsletter.com. Author is long RTLX. He holds no position in any other stock mentioned as of 11/14/07.
Almost everyone who has surfed the Internet understands the potential for assault from hackers, spammers and other cyber villains. Among the best known defenders of a computer system's integrity is an outfit headquartered in Santa Clara, California.
McAfee (NYSE: MFE) provides computer security solutions for home and business systems. Offerings include anti-virus and anti-spyware services; encryption and backup applications; and programs used to stop unwanted e-mail. The company also provides consulting, support, and training services and has strategic alliances with such industry specialists as Cisco Systems (NASDAQ: CSCO), IBM (NYSE: IBM) and Microsoft (NASDAQ: MSFT). Earlier in the week, it announced the $350 million acquisition of SafeBoot, a developer of security software for laptops, smartphones, and other mobile devices.
MOST NOTEWORTHY: The process control sector, R.H. Donnelley, Vonage, Coca-Cola Enterprises and Transocean were today's noteworthy downgrades:
Baird reduced estimates across the board in the process control sector due to lower expectations for North American industrial and residential construction. The firm downgraded Roper Industries (NYSE: ROP), Regal-Beloit Corp (NYSE: RBC) and Baldor Electric (NYSE: BEZ) to Neutral from Outperform and AO Smith Corporation (NYSE: AOS) to Underperform from Neutral.
Goldman downgraded shares of R.H. Donnelley Corporation (NYSE: RHD) to Neutral from Buy after the company updated its 2007 guidance to reflect deteriorating trends in local advertising.
Vonage Holdings Corp (NYSE: VG) was downgraded to Sell from Hold at Soleil due to liquidity concerns.
Coca-Cola Enterprises (NYSE: CCE) was downgraded to Hold from Buy at Deutsche Bank on valuation and mixed near-term trends.
Transocean Inc (NYSE: RIG) was downgraded to Hold from Buy at Gabelli. Even though the deepwater market continues to be strong, the firm is concerned regarding the continuing weakness in the jackup market as well as the limited upside potential due to the company's ships being in use through 2009.
Deutsche Bank believes new product leverage can bring upside to consensus operating margin expectations at Microsoft Corporation (NASDAQ: MSFT) and they view shares as attractively valued given its growth profile. The firm started shares with a Buy rating and $33 target.
Keybanc initiated shares of Salesforce.com (NYSE: CRM) with a Hold rating and sees slowing growth rates for revenue and net subscriber additions throughout the remainder of FY08 and beyond and thinks investor expectations are too high.
Keybanc also started shares of Taleo Corporation (NASDAQ: TLEO) with a Buy rating and $27 target, as it is well-positioned to gain market share in the Human Capital Management space.
Thomas Weisel believes McAfee Inc (NYSE: MFE) will benefit from PC market growth, enhanced awareness of the company's brand, and its renewed focus on product development for the midmarket corporate segment, and started shares with a Market Weight rating and $37 target.
OTHER INITIATIONS:
Lululemon Athletica (NASDAQ: LULU) was started at William Blair with an Outperform rating and at UBS with a Neutral rating and $37 target.
Merrill Lynch initiated shares of Zoltek Companies Inc (NASDAQ: ZOLT) with a Buy rating and $50 target.
MOST NOTEWORTHY: VMware (VMW), Bed, Bath & Beyond (BBBY), Williams-Sonoma (WSM), Landstar System (LSTR) and Acadia Pharmaceuticals (ACAD) were the noteworthy initiations:
Robert W. Baird initiated coverage on VMware (NYSE: VMW) with a Neutral rating citing valuation.
Citigroup started Bed Bath & Beyond (NASDAQ: BBBY) with a Hold rating, and cited the increasing competitive environment, slowing square footage growth and the weak housing market.
Citigroup started Williams-Sonoma (NYSE: WSM) with a Sell rating and said the company has an inventory glut that could lead to markdown risk, there is raw material price inflation, and the weak housing market remains a material risk.
Wachovia is cautious on Landstar System's (NASDAQ: LSTR) near-term growth rates and difficult end markets, starting shares with a Market Perform rating.
Deutsche is positive on the potential of Acadia Pharmaceutical's (NASDAQ: ACAD) ACP-103 in schizophrenia, starting shares with a Buy rating...
McAfee (NASDAQ: MFE) volatility of 39 above 26-week average of 30. MFE, an intrusion prevention and security risk management provider, is recently up .22 to $33.75. MFE over all option implied volatility of 39 is above its 26-week average of 30 according to Track Data, suggesting decreasing risks.
Symantec (NASDAQ: SYMC) over all option implied volatility at 36. SYMC provides solutions to help individuals and enterprises assure the security and availability of their information. Soleil Securities says "we are reiterating our SYMC Buy rating and our $27 price target." SYMC over all option implied volatility of 36 is above its 26-week average of 33 according to Track Data, suggesting slightly larger risks.
Websense NASDAQ: WBSN) implied volatility of 42 above 26-week average of 32. WBSN, a web security and web filter software company, has a market cap of $907 million with zero long term debt. WBSN reported total 2006 revenues of $178 million. WBSN is recently down .02 to $19.97. WBSN over all option implied volatility of 42 is above its 26-week average of 32 according to Track Data, suggesting larger price risks.
Aladdin Knowledge Systems-(NASDAQ: ALDN) implied volatility Elevated at 39. ALDN is a global provider of security solutions that reduce software theft and protects network users from undetected spam & viruses. ALDN has market cap of $298 million with zero long term debt. ALDN reported 2006 annual total revenue of $89 million. ALDN over all option implied volatility of 39 is above its 26-week average of 33 according to Track Data, suggesting larger risk.
Volatility Index S&P 500 Options-VIX down 1.61 to 28.38.
Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
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MOST NOTEWORTHY: The North American Pipeline sector, Aeropostale and ImClone were today's noteworthy initiations: 
Here are some highlights from this past week's 
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Earnings preview for Ford
Apple shares rise on report Steve Jobs is free of cancer
Toyota whups GM in the first half of 2008
