Microsoft (NASDAQ: MSFT), Gap (NYSE: GPS) and Healthcare Services (HCSG) were today's noteworthy upgrades:
Oppenheimer upgraded shares of Microsoft (NASDAQ: MSFT) to Outperform from Perform on valuation as they see a trading opportunity following the recent sell-off. The firm established a $22 target on shares.
Citigroup upgraded Gap (NYSE: GPS) to Buy from Hold on its "solid" Q3 results and greater visibility. The firm lowered their target to $12 from $14.
William Blair upgraded shares of Healthcare Services (NASDAQ: HCSG) to Outperform from Market Perform to reflect the company's strong financial position and stable business outlook.
ARM Holdings (NASDAQ: ARMH) was upgraded to Buy from Neutral and added to the Conviction Buy List.
Intuit (NASDAQ: INTU) was raised to Buy from Sell at UBS.
Cyberonics (NASDAQ: CYBX) was lifted to Buy from Neutral at Piper Jaffray.
Analyst downgrades:
Baird downgraded Autodesk (NASDAQ: ADSK) to Neutral from Outperform and lowered its target to $20 from $31 following the company's weak Q4 guidance. Shares were also downgraded to Underperform from Buy at Merrill Lynch.
Friedman Billings downgraded shares of Goodrich (NYSE: GR) to Market Perform from Outperform as they do not expect a turnaround in the commercial aerospace stocks in the near term. The firm lowered their target to $46 from $83.
UBS cut VMware (NYSE: VMW) to Sell from Neutral and lowered its target to $15 from $21 following checks that indicate that consensus license growth expectations are too aggressive for Q4 and FY09.
Sunpower (NASDAQ: SPWRA) was lowered to Underperform from Neutral at Merrill Lynch.
Gen-Probe (NASDAQ: GPRO) was downgraded at Morgan Stanley to Equal Weight from Overweight.
Goldman removed Emulex (NYSE: ELX) from its Conviction Buy List.
Analyst initiations:
Google (NASDAQ: GOOG) was initiated at Merriman with Sell rating. Merriman's checks indicate the decline in consumer and business purchasing is having a dampening effect on search engine marketing. The firm sees downside risk to consensus estimates and recommends waiting for a better entry point. The firm thinks shares could reach $200 to $240 in the near-term.
Oppenheimer believes Cadence Pharmaceuticals (NASDAQ: CADX) is sufficiently capitalized to reach FDA approval of Acetavance and Omigard. Shares were initiated with an Outperform rating and $10 target.
William Blair believes Cisco (NASDAQ: CSCO) must evolve from selling pure infrastructure hardware to providing platforms with higher value and intelligence. The firm started shares with a Market Perform rating.
Societe General upgraded BASF AG (OTC: BASFY) to Buy from Hold. The firm believes the bad news is out and that BASF has a strong market position.
Pali Capital upgraded Hot Topic (NASDAQ: HOTT) to Buy from Neutral based on the ongoing merchandise catalyst, the opportunity to reclaim the mainstream kid and closing underperforming stores, which create the most favorable conditions in the last 5+ years.
Stanford upgraded L-1 Identity (NYSE: ID) to Buy from Hold on valuation, and the firm sees little risk to the company from the Obama Administration.
Gymboree (NASDAQ: GYMB) and Windstream (WIN) were raised to Overweight from Neutral at JP Morgan.
Doral Financial (NYSE: DRL) was upgraded at B. Riley to Buy from Neutral.
Alumina (NYSE: AWC) was upgraded to Buy from Neutral at UBS.
Analyst downgrades:
Credit Suisse downgraded Targanta (NASDAQ: TARG) to Underperform from Outperform following the FDA Panel's rejection of Oritavancin.
Citigroup downgraded BASF AG (OTC: BASFY) to Sell from Hold and sees no reason to own the stock following the company's profit warning. Shares were also downgraded at WestLB to Hold from Add.
Deutsche Bank downgraded shares of Amedisys (NASDAQ: AMED) to Hold from Buy and lowered its target to $53 from $75 on concerns over the company's deteriorating A/R aging trends.
VeriFone Holdings (NYSE: PAY) and Navios Maritime (NYSE: NMM) were lowered to Neutral from Overweight at JP Morgan.
NTT DoCoMo (NYSE: DCM) was downgraded at Citigroup to Hold from Buy.
Analyst initiations:
Needham expects shares of Cepheid (NASDAQ: CPHD) to be driven by continued market penetration in the hospital acquired infection market, new test introductions, GeneXpert Infinity sales, and molecular diagnostics growth from sales outside of traditional molecular testing areas. Shares were initiated with a Buy rating and $21 target.
Needham also initiated Gen-Probe (NASDAQ: GPRO) with a Hold rating and expects market share gains for the company when PANTHER is approved in 2010/2011.
William Blair believes Harbin Electric (NASDAQ: HRBN) is an "interesting" opportunity for exposure to rapid growth in infrastructure within the People's Republic of China. The firm started shares with a Market Perform rating.
Boston Scientific (NYSE: BSX) was initiated with a Buy rating and $11 target at UBS.
NutriSystem (NASDAQ: NTRI) was initiated with a Neutral rating at Janney Montgomery.
Ener1 (NYSE: HEV) was assumed at JMP Securities with an Outperform rating and $9 target.
Interesting article on Hewlett-Packard (NYSE: HPQ) beating Apple (NASDAQ: AAPL) to the "touch" with regard to providing a touch screen interface on a computer. It's certainly a worthwhile read. However, I've long commented on AAPL and its particular touch technology being infused into its computer lineup in some way. Laptops will likely be the first enabled. However, I'll take some assertions in the article to task.
While AAPL is known to be a first mover and always have that advantage, that's not always the case. I think it's more the fact that when the company does something it just executes so well and improves an existing product category so dramatically that people think it's a first mover product.
It certainly was very late entering the cellular market but did it spectacularly with a game changer. Portable music devices were around for years and the iPod was the ultimate game changer. In fact, the continued iPod dominance with this mature of a product is simply shocking. I could give more examples but the point is made.
UBS upgraded Pacific Sunwear (NASDAQ: PSUN) to Neutral from Sell and said liquidity is no longer a near-term concern. The firm lowered Pacific Sunwear's target to $1.50 from $3. Citigroup upgraded shares to Hold from Sell on valuation following the recent weakness and believes Pacific Sunwear has sufficient liquidity to remain a going concern.
Calyon believes Reliant Energy (NYSE: RRI) will be successful in unwinding the Merrill Lynch Retail credit sleeve and obtaining alternative collateral. The firm upgraded shares to Buy from Add.
JP Morgan said Cogent's (NASDAQ: COGT) position in homeland security and the defense markets make it less sensitive to an economic downturn, making valuation attractive. JP Morgan upgraded shares to Overweight from Neutral and raised its target to $13 from $10.50.
Goldman added Research in Motion (NASDAQ: RIMM) to its Conviction Buy List and removed Riverbed (NASDAQ: RVBD) from the Conviction Sell List.
J.M. Smucker (NYSE: SJM) was raised to Buy from Underperform at Merrill Lynch.
International Speedway (NASDAQ: ISCA), a promoter of motor sports entertainment, closed at $25.23 Tuesday. ISCA December option implied volatility of 58 is above its 26-week average of 34 according to Track Data, suggesting larger price movement.
PetsMart (NYSE: PETM), the operator of more than 1,075 pet stores, is scheduled to report Q3 EPS today. PETM closed at $15.06 Tuesday. PETM November 15 straddle is priced at $1.65, PETM December 15 straddle is priced at $3.40. PETM December option implied volatility is at 97: January is at 75; above its 26-week average of 56 according to Track Data, indicating larger near term movement.
First Solar (NYSE-FSLR) is recently down $6.56 to $104 in pre-open trading. Friedman Billings says: "Recent checks suggest that FSLR's new strategy in the U.S. market (entering the distributed, rooftop segment) is already facing headwinds." FSLR overall option implied volatility of 121 is above its 26-week average of 82 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
US securities analysts have been encouraged not to rate every company they cover as a Buy. That may not be working even as earnings fall.
According to the FT, "Equity research departments around the world have become much more bearish since the start of the year, but US analysts remain markedly more bullish on stocks than peers elsewhere." Research quoted by the paper shows that only 6.7% of stocks covered by U.S. stock researchers rate a Sell.
The news is disturbing because positive ratings are one of the things that keep investors in stocks and analysts who are slow to cut their price targets and modify opinions are likely to cost shareholder money.
U.S. stock researchers have long believed that lowering ratings gives them less access to management. That is a poor excuse for being overly bullish on shares.
The investing public and press mock analysts who put Sell ratings on stocks after they have dropped 90%. It appears that those actions are built into the U.S. equity research system.
Cowen upgraded Aaron Rents (NYSE: RNT) to Outperform from Neutral and believes the company's business model is gaining momentum despite the difficult environment. The firm views valuation as attractive.
Citigroup upgraded shares of MedCath (NASDAQ: MDTH) to Hold from Sell on valuation following the recent sell-off. The company's target was lowered to $9 from $19.
Stanford upgraded AeroVironment (NASDAQ: AVAV) to Buy from Hold based on valuation and because they believe its visibility over the next year has improved.
Chico's FAS (NYSE: CHS) was upgraded to Neutral from Sell at UBS.
FCStone (NASDAQ: FCSX) was raised to Strong Buy from Outperform at Raymond James.
Analyst downgrades:
RBC Capital downgraded Clearwire (NASDAQ: CLWR) to Sector Perform from Outperform based on reduced valuation parameters and lack of catalysts. The company's target was lowered to $9 from $15.
Kellogg (NYSE: K) and Coca-Cola (NYSE: KO) were cut to Neutral from Buy at UBS.
Evergreen Solar (NASDAQ: ESLR) was downgraded at JP Morgan to Underweight from Neutral.
Deutsche Telekom (NYSE: DT) was downgraded to Neutral from Buy at Goldman and to Hold from Buy at Deutsche Bank.
Hewlett-Packard (NYSE: HPQ) is recently trading at $32.25 in pre-open trading, above its close of $29.34 Monday. HPQ reported Q4 net revenue up 19%, or $5.3 billion, from a year ago. HPQ December option implied volatility of 74 is above its 26-week average of 41 according to Track Data, suggesting larger price movement.
ICICI Bank(NYSE: IBN), India's second largest bank IBN, closed at $15.02 Monday. IBI halved its target for growth in lending to 15% - Bloomberg. The Bombay EX 100 IDX is recently down 3.65%. IBN December option implied volatility of 132 is above its 26-week average of 80 according to Track Data, suggesting larger price fluctuations.
Gap (NYSE: GPS) closed at $10.72 Monday. GPS is scheduled to report Q3 EPS on November 20. Friedman Billings anticipates GPS will set expectations for continued weak margins and heavy promotions. GPS November 10 straddle is priced at $1.50, December 10 is at $2.75. GPS December option implied volatility of 105 is above its 26-week average of 57 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
One of my top holdings, Intuitive Surgical Inc (NASDAQ: ISRG) and favorite stocks is taking a beating this morning and has been along with almost everything else. One of our readers who has been following this story line sent me an email asking what my current thoughts on the subject are. Andrew:
"I'm just curious if you hung on to your ISRG or if you bailed on it... I've been following it since this article, and man, its really heading down to the boiler room... Doctors seeem to be making cuts all over the place, and it looks like ISRG is being taken for a ride... I'm looking at getting in, but maybe if it hits 112 to even as low as sub 100... But I'm curious how you've taken to it?"
As the old saying goes in regards to the stock market, beware trying to catch a falling knife. Regardless, I have been a buyer of late. But first questions first. We did sell 20% of our position for a large gain just under $200 per share, having originally bought in at $7.70. We did not bail out but we did take our original money off the table, and then some.
UBS upgraded McDonald's (NYSE:MCD) to Buy from Neutral based on expectations the it can deliver on 2009 EPS expectations and potential for accelerating share gains.
Bernstein upgraded Nokia (NYSE:NOK) to Outperform from Underperform on valuation following the company's profit warning. Merrill upgraded shares to Buy from Neutral to reflect valuation and Nokia's new product portfolio. Shares were also upgraded to Hold from Sell at WestLB.
B. Riley raised UCBH Holdings (NASDAQ:UCBH) to Buy from Neutral to reflect the improved valuation and the company's stronger capital position provided by the US Treasury investment.
Parexel (NASDAQ:PRXL) was upgraded to Buy from Hold at Jefferies.
CTS Corp (NYSE:CTS) was lifted to Neutral from Underweight at JP Morgan.
Soleil downgraded Disney (NYSE:DIS) to Hold from Buy to reflect the weakening macro-economic outlook and their belief consensus estimates may be too high. The firm lowered their target to $23 from $40.
Merrill downgraded Dell (NASDAQ:DELL) to Neutral from Buy on expectations PC sales will decline next year amid the slowing economy. The firm lowered Dell's target price to $13 from $22.
Jefferies cut MDS Inc (NASDAQ:MDZ) to Hold from Buy to reflect slowing demand and a lack of catalysts to unlock the company's assets. The firm lowered their target to $10.50 from $15.
Alcoa (NYSE:AA) was lowered to Neutral from Buy at UBS.
Tesco PLC (Other OTC:TSCDY) was downgraded at JP Morgan to Underweight from Neutral.
Merrill downgraded SAP AG (NYSE:SAP) to Neutral from Buy.
Goldman added Altera (NASDAQ:ALTR) to the Conviction Sell List.
Analyst initiations:
Citigroup thinks AutoZone (NYSE:AZO) will benefit from the slowdown in car sales and thinks the recent pullback is overdone. Shares were initiated with a Buy rating and $146 target.
Citigroup also believes Advance Auto Parts (NYSE:AAP) will benefit from the slowdown in car sales and started shares with a Buy rating and $35 target.
After Sunway (OTCBB:SUWG) reported higher than expected revenue, Roth Capital thinks the company is poised for substantial growth, but the firm thinks its remaining warrants may keep the shares trading at a modest valuation for a significant amount of time. The firm started shares with a Hold rating and $3.60 target.
Mechel Steel (NYSE:MTL) was initiated with a Neutral rating at Merrill Lynch.
Friedman Billings upgraded Synovus (NYSE: SNV) to Market Perform from Underperform on valuation following the recent weakness. BASF (OTC: BASFY) and Akzo Nobel (OTC: AKZOY) were upgraded to Buy from Neutral at UBS on valuation and believes cash flows can cover the company's dividend.
JP Morgan upgraded H.B. Fuller (NYSE: FUL) to Overweight from Neutral citing benefits from lower raw material costs.
CA, Inc (NASDAQ: CA) was added to Goldman's Conviction Buy List.
Goldman removed Boeing (NYSE: BA) from the Conviction Sell List.
WABCO Holdings (NYSE: WBC) was upgraded to Buy from Hold at KeyBanc.
Analyst downgrades:
Oppenheimer downgraded Giant Interactive (NYSE: GA) to Perform from Outperform following the company's Q3 results as they believe a recovery of revenue from ZT Online will take longer than expected.
Friedman Billings cut Walter Industries (NYSE: WLT) to Market Perform from Outperform as they believe the decline in steel demand will pressure met coal prices. The company's target was lowered to $30 from $53.
Citigroup downgraded shares of Atlas Pipeline (NYSE: AHD) Holdings to Sell from Hold as they believe the company could potentially be in violation of its debt covenants as early as Q1. The company's target was lowered to $4 from $31.
Oracle (NASDAQ: ORCL) was removed from Goldman's Conviction Buy List.
Dover (NYSE: DOV) and Emerson Electric (NYSE: EMR) were downgraded to Underweight from Neutral at JP Morgan.
Goldman upgraded Bed Bath & Beyond (NASDAQ: BBBY) to Buy from Neutral based on valuation and a potential margin rebound at Linens N' Things.
Citigroup upgraded Rockwell Automation Inc. (NYSE: ROK) to Hold from Sell on valuation and believes expectations have been reset to a reasonable level. The company's target was lowered to $27 from $33.
Friedman Billings upgraded shares of Ceradyne (NASDAQ: CRDN) to Outperform from Market Perform on valuation following the recent weakness and thinks the Army will move forward with a larger XSAPI procurement in FY09. The firm raised their target to $30 from $26.
Goldman added Wyeth (NYSE: WYE) to the Conviction Buy List.
Sears Holding (NYSE: SHLD) closed at $50.22 Tuesday. SHLD Q3 results are expected in late November. Deutsche Bank has a Sell rating on SHLD. SHLD December call implied volatility is at 83, puts are at 127; above its 26-week average of 53 according to Track Data, suggesting larger price movement. SHLD puts are priced higher than calls because SHLD is difficult to borrow.
Dillards (NYSE: DDS) closed at $3.86 Tuesday. DDS is expected to report earnings soon. DDS December option implied volatility of 145 is above its 26-week average of 85 according to Track Data, indicating larger price movement.
Kohl's (NYSE: KSS) closed at $30.69 Tuesday. KSS is scheduled to report Q3 financial results on November 13. Deutsche Bank has a Buy rating on KSS. KSS overall option implied volatility of 84 is above its 26-week average of 64 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
The shares of Level 3 Communications (NASDAQ: LVLT) are sinking deeper into penny-stock territory this morning following a damaging price-target cut from analysts at Citigroup. The brokerage firm slashed its price target on LVLT from $2.00 to 50 cents, and reiterated its Sell rating on the stock.
After closing Monday at 94 cents, LVLT is slipping ever closer this morning to that hypothetical "support at zero." In fact, following yesterday's all-out bearish note on General Motors (NYSE: GM), one has to wonder if Deutsche Bank will soon be slapping another of its famous goose-egg targets on Level 3. The stock has closed seven out of the past 13 sessions south of the $1 level, and its descending 10-day and 20-day moving averages have provided stubborn resistance in recent months.
In fact, while many analysts have already denounced LVLT, there's still room for potential downgrades or price-target cuts. Zacks reports two Buy or better ratings from brokerage firms, and these bulls may soon be shamed into lowering their opinions (if so, they would join six analysts who consider the stock a Hold, and six who deem it a Sell or Strong Sell).
Meanwhile, Thomson Financial pegs the average 12-month price target at $1.68, a premium of 87% to the equity's closing price on Monday. While more negative notes could drag the shares lower, there is a bright side -- from their current level, the shares could only lose about 85 cents.
U.S. stock futures were lower Tuesday morning as economic concerns increased. China, which boosted markets only Monday with its own stimulus plan, today showed signs of slowing growth as well. World markets responded, with Asia markets posting losses and European markets opening down as well. Oil prices declined again to as low as $60 a barrel. Gloomy corporate reports as well as housing and financial sector woes are weighing heavily on markets today.
[Note: Extended hours indications can change as news progresses, changes.]
American Express Co. (NYSE: AXP) applied to become a commercial bank on Nov 5. Monday night the Federal Reserve approved the request due to "emergency conditions." AmEX could now accept deposits, thus bolster its cash, and gain quicker access to Fed financing.
Starbucks Corp. (NASDAQ: SBUX), the once high flying company, reported Monday 97% lower profit in its fourth quarter. Excluding items, Starbucks earned 10 cents per share, below analyst estimates of 13 cents per share. Fewer U.S. customers and higher costs for closing poorly performing stores led to lower sales and profit. SBUX shares declined 2.75% in after-hours trade 7:56 p.m.
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Sean Udall is a 
International Speedway
One of my top holdings, 
U.S. stock futures were lower Tuesday morning as economic concerns increased. China, which boosted markets only Monday with its own stimulus plan, today showed signs of slowing growth as well. 
Stock picks and pans for troubled times: RIMM, ED, ISRG, GLW, LEA, SLB, GOOG ...
Is Berkshire Hathaway better than S&P Index?
Closing Bell: Torch Passing on a Friday Rally
