24/7 Wall St. Top Analyst Calls of the Week (MTGE, AAPL, AMAT, ABX, BP, CSCO, JPM, C, LNKD, NOK, OPEN, ORCL, RIMM, UAL, VRSN, MHR, OAS)September 18, 2011 by Jon C. Ogg
Each morning we review our top analyst upgrades, downgrades, and initiations from Wall Street research notes. We then look back over these at the end of the week to more closely review calls which highlight underlying catalysts or developments that go far beyond just a one-day impact. Many calls turn out to offer keen insight, but some get a failing grade. These become the top analyst calls of the week.
This last week’s top analyst calls of the week were in the following: American Capital Mortgage Investment Corp. (NASDAQ: MTGE); Apple Inc. (NASDAQ: AAPL); Applied Materials Inc. (NASDAQ: AMAT); Barrick Gold Corporation (NYSE: ABX); BP PLC (NYSE: BP); Cisco Systems Inc. (NASDAQ: CSCO); J.P. Morgan Chase & Co. (NYSE: JPM); LinkedIn Corporation (NYSE: LNKD); Nokia Corporation (NYSE: NOK); OpenTable, Inc. (NASDAQ: OPEN); Oracle Corporation (NASDAQ: ORCL); Research in Motion Ltd. (NASDAQ: RIMM); United Continental Holdings, Inc. (NYSE: UAL); VeriSign Inc. (NASDAQ: VRSN); Magnum Hunter Resources Corp. (AMEX: MHR); and Oasis Petroleum Inc. (NYSE: OAS).
We have outlined the calls and added in color on each, and we also included links to more detail on a few of the calls.
American Capital Mortgage Investment Corp. (NASDAQ: MTGE) is a newly issued REIT that invests in and manages a leveraged portfolio of agency and non-agency mortgage investments. In short, it is a mortgage-REIT. Its post-IPO quiet period ended and at $18.47 it has a post-IPO range of $16.40 to $20.00. Analysts initiated coverage mostly with a positive bias: Buy at Deutsche Bank; Buy at UBS; and Outperform at Wells Fargo. The cautious call was the “Hold” issued by Citigroup.
Apple Inc. (NASDAQ: AAPL) usually gets several reiterations a week, but this last week was a less routine call. Morgan Stanley now believes that the company is closer than ever to a dividend or large share buyback announcement.
Applied Materials Inc. (NASDAQ: AMAT) is in the rough and tough chip cap-ex sector, which is still under pressure. The recent guidance was not great but the stock trades at a valuation that is low even for a stock that usually trades cheap to the market. There were two upgrades this week as it was raised to Outperform at Oppenheimer and even raised to Strong Buy by S&P Equity Research. This one closed down on Friday but the weekly gain was almost 8%.
Barrick Gold Corporation (NYSE: ABX) is a monster gold player worth over $50 billion. You do not usually hear the term “Value” with gold any more, but late in the week Barrick was named the value stock of the day by Zacks this last week. Shares closed up 1.3% at $53.58 on Friday and the 52-week range is $42.50 to $55.95.
BP PLC (NYSE: BP) is still languishing from the 2010 Gulf of Mexico disaster even if it did rise this last week. We still do not see huge great upside calls here routinely, but this last Thursday came the dismal initiation with an “Underweight” at Morgan Stanley. Regardless, shares rose about 10% this last week.
Cisco Systems Inc. (NASDAQ: CSCO) had its analyst meeting this last week and despite some trouble the takeaways from Wall Street had some positives there after John Chambers said he will stay on about three more years. Cisco’s rating was reiterated as Buy with a $22 target at BofA/Merrill Lynch and it was reiterated with a “Outperform” at Credit Suisse. Despite a close in the red on Friday, the $16.62 close on Friday was up 5% on the week.
J.P. Morgan Chase & Co. (NYSE: JPM) remains the healthiest of the bank stocks even if it has lost almost one-third of its value from the peak this last year. Maybe things are leveling off because the stock was raised to Buy with a $40.00 price target at Stifel Nicolaus this last week. The firm even said this is a conservative target and it believes that the over-owned situation may be less relevant than it had been before. Citigroup Inc. (NYSE: C) announced several banking cuts this week on the major peers.
LinkedIn Corporation (NYSE: LNKD) is a stock which remains controversial for its high social networking value with such a low share float. This last week brought an analyst duel: The stock was started with a “Hold” rating at Argus, but Barclays initiated coverage with a “Overweight” rating.
Nokia Corporation (NYSE: NOK) has very few friends and some consider it in the same boat. The cellphone maker was raised to Buy from Hold by Societe Generale. he firm said some of the bad issues are being fixed and it called for its new dual-SIM handsets to possibly have 25 million in unit sales this quarter. We’ll see. Shares were hit on its exit from the Euro Stoxx 50 with a 3.7% drop to $6.03 and the 52-week range is $4.82 to $11.75.
OpenTable, Inc. (NASDAQ: OPEN) is now under more competitive threat from Google and its stock is now down more than 50% from the highs earlier this year. Barclays is concerned enough that it started coverage with a poor Underweight rating and a mere $60 target on Friday. Shares fell 4.8% to $53.48 and the 52-week trading range is $52.46 to $118.66.
Oracle Corporation (NASDAQ: ORCL) is set to report earnings this coming week and it is always interesting when you see analyst upgrades ahead of such a key event. Oracle was raised to “Positive” this last week at Susquehanna, but the real call came when it was raised to the Conviction Buy List at Goldman Sachs. At $29.23, shares closed up over 12% this last week due to investor optimism.
Research in Motion Ltd. (NASDAQ: RIMM) was killed after earnings and there were at least three more downgrades from firms which refused to be negative enough. Raymond James, Pacific Crest, and National Bank all were caught on the wrong side of earnings and issued after-the-fact downgrades. These guys must have not gone to a wireless carrier and asked how Blackberry sales are doing.
United Continental Holdings, Inc. (NYSE: UAL) may not sound like such a bold call when you hear that it was “Reiterated as a Buy” by Argus this last week. But with shares around $20.00 right before this call, it is the $34.00 price target objective that Argus gave on the stock looking for upside in the vicinity of 70%. The consensus target is $32.50 but the 52-week range is $15.92 to $29.75.
VeriSign Inc. (NASDAQ: VRSN) had been all over the place on hopes that M&A was headed its way, but now it has lost a CEO and its CFO in prior weeks. This made it seem very odd to see a call hit the tape on Monday that S&P Equity Research was raising the rating to “Buy” when the catalysts seem unlikely now. Still, VeriSign closed down only $0.03 for the entire last week at $29.00. Before the news of the CFO exit the week earlier, this was a $33 and $34 stock after positive rumors lifted it up.
Canaccord Genuity issued called for 50% and even 100% upside in some of the selected second-tier energy players in oil and gas. Magnum Hunter Resources Corp. (AMEX: MHR) and Oasis Petroleum Inc. (NYSE: OAS) were two of the representative calls but there were eight stocks in total given big upgrades with huge upside potential.
JON C. OGG