MOST NOTEWORTHY: Google, Ross Stores and Novartis were today's noteworthy upgrades:
Jefferies upgraded Google (NASDAQ: GOOG) to Buy from Hold to reflect the company's "impressive" improvements in monetization in Q1, no signs of weakness from the economic downturn and upside potential from display, video and mobile.
Lehman upgraded Ross Stores (NASDAQ: ROST) to Overweight from Equal Weight and believes the company's 2008 guidance of 8-9% sales growth and up to 20% bps in margin expansion will prove conservative.
Morgan Stanley upped Novartis (NYSE: NVS) to Overweight from Underweight on valuation and expectations for positive news flow from the company's vaccine division.
OTHER UPGRADES:
JP Morgan upgraded Bladex to Neutral from Underweight.
William Blair raised Watsco (NYSE: WSO) to Outperform from Market Perform.
SunTrust (NYSE: STI) was upgraded at Baird to Neutral from Underperform.
MOST NOTEWORTHY: Patterson Companies, Virgin Media and MannKind were today's noteworthy downgrades:
Patterson (NASDAQ:PDCO) was downgraded to Neutral from Outperform at Baird, as the firm's checks indicate industry fundamentals have softened and it sees greater near-term risk for dental consumables than dental equipment.
Virgin Media (NASDAQ:VMED) was cut to Hold from Buy at Jefferies as they believe the company's results could be under pressure given the continued competitive activity and potential weakening of the UK economy.
Piper downgraded shares of MannKind (NASDAQ:MNKD) to Neutral from Buy and lowered their target to $1.50 after Pfizer (NYSE:PFE) discontinued inhaled insulin Exubera due to an increase in lung cancer cases.
OTHER DOWNGRADES:
Lehman cut Cheniere Energy (LNG) to Equal Weight from Overweight.
Pantry (PTRY) was cut to Market Perform from Outperform at Friedman Billings.
JP Morgan lowered Watsco (WSO) to Neutral from Overweight.
MOST NOTEWORTHY: The Telecom Services sector, Watsco and Key Corp were today's noteworthy downgrades:
Credit Suisse downgraded the Telecom Services sector to Market Weight from Overweight as they believe trends could weaken in 2008 given increasing wireless competition and the difficult economic environment. The broker downgraded Verizon (NYSE: VZ) and AT&T Corp. (NYSE: T) to Neutral from Outperform in conjunction with the sector downgrade.
Oppenheimer downgraded Watsco (NYSE: WSO) to Perform from Outperform citing lack of near-term catalysts, further weakening in its core business, and weak 2008 earnings guidance.
RBC Capital lowered Key Corp. (NYSE: KEY) to Underperform from Sector Perform citing further credit deterioration following the company's outlook.
OTHER DOWNGRADES:
Thomas Weisel lowered Coach (NYSE: COH) to to Market Weight from Overweight.
MOST NOTEWORTHY: Ruth's Chris Steak House (RUTH), Hilton Hotels (HLT) and Champps Entertainment (CMPP) were today's noteworthy downgrades:
Goldman cut shares of Ruth's Chris Steak House (NASDAQ: RUTH) to Sell from Neutral following the company's preliminary Q2 sales, as they expect relative underperformance over the near-term. Goldman believes macro headwinds could weigh on Ruth's client base and keep traffic negative for the rest of the year.
Hilton Hotels (NYSE: HLT) was downgraded by a number of firms after the Blackstone Group (BX) takeout offer: Jefferies and Citigroup cut shares to Hold from Buy, Calyon downgraded shares to Neutral from Buy, Raymond James downgraded shares to Market Perform from Strong Buy, Suquehanna cut shares to Neutral from Positive and Bear Stearns downgraded Hilton Hotels to Peer Perform from Outperform.
B. Riley downgraded shares of Champps Entertainment (NASDAQ: CMPP) to Neutral from Buy to reflect the buyout offer from F&H Acquisition Corp...
OTHER DOWNGRADES:
B. Riley downgraded shares of ACR Group (AMEX: BRR) to reflect the company's merger agreement with Watsco Inc (WSO).
MOST NOTEWORTHY: Continental Airlines, Inc (CAL), Molson Coors Brewing Co (TAP), Watsco, Inc (WSO), K-V Pharmaceutical Co (KV.A), Progressive Corp (PGR) and Color Kinetics (CLRK) were today's noteworthy downgrades:
Goldman downgraded shares of Continental Airlines, Inc (NYSE: CAL) to Neutral from Buy on valuation, higher oil prices and a weak domestic market.
Goldman also downgraded Molson Coors Brewing Co (NYSE: TAP) to Neutral from Buy based on the increase in analyst estimates, valuation and the potential for margin pressure in the summer.
BB&T cut Watsco, Inc (NYSE: WSO) to Hold from Buy based on valuation and catalysts that are already reflected in the share price.
Roth Capital downgraded shares of K-V Pharmaceutical Co (NYSE: KV.A) to Hold from Buy, telling clients they have learned that Par Pharmaceuticals Cos (PRX) has launched generics of 50, 100 and 200mg Toprol-XL. The firm expects a material impact to KV's 100 and 200mg strength generics.
Stifel expects investor enthusiasm regarding Progressive's Corp (NYSE: PGR) recapitalization plan to fade as underwriting fundamentals deteriorate and cut shares to Sell from Hold.
Color Kinetics (NASDAQ: CLRK) was downgraded to Hold from Sell at Needham on valuation...
MOST NOTEWORTHY: Burger King Holdings, Inc (BKC), Supertel Hospitality Inc (SPPR), OSI Pharmaceuticals, Inc (OSIP), Brown-Forman Corp (BF.B) and NGAS Resources, Inc (NGAS) were today's noteworthy initiations:
CIBC considers shares of Burger King Holdings (NYSE: BKC) to still be attractive and has above-consensus estimates, starting shares with an Sector Outperformer rating. The firm believes increased operating hours and breakfast value meals will drive results, while cost savings should help margins.
JMP Securities believes there is plenty of room for growth at Supertel Hospitality (NASDAQ: SPPR) via acquisitions, leading to strong FFO upside, initiating shares with an Outperform rating and $8 target.
ThinkEquity sees additional upside for Tarceva and started OSI Pharmaceuticals (NASDAQ: OSIP) with a Buy rating and $50 target.
AG Edwards believes Brown-Forman (NYSE: BF.B) is well-positioned to benefit from new trends in spirits and wine, starting shares with a Buy rating and $74 target.
RBC Capital is positive on NGAS Resources' (NASDAQ: NGAS) growth potential and high quality assets, starting shares with an Outperform rating and $11 target...
OTHER INITIATIONS:
CIT Group (NYSE: CIT) was started with a Market Perform rating at Keefe Bruyette.
Oppenheimer started shares of Watsco, Inc (NYSE: WSO) with a Buy rating.
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MOST NOTEWORTHY: Google, Ross Stores and Novartis were today's noteworthy upgrades:
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