24/7 Wall St. Top Analyst Calls of the Week (AONE, ALU, AMSC, NLY, AAPL, CSCO, COH, CSTR, COP, DLR, IBM, LF, MMM, M, OPEN, POST, SIRI, SOHU, TRLG, ZOLT)February 11, 2012 by Jon C. Ogg
This last weeks most featured reports were in shares of the following: A123 Systems, Inc. (NASDAQ: AONE); Alcatel-Lucent S.A. (NYSE: ALU); American Superconductor Corporation (NASDAQ: AMSC); Annaly Capital Management Inc. (NYSE: NLY); Apple Inc. (NASDAQ: AAPL); Cisco Systems, Inc. (NASDAQ: CSCO); Coach, Inc. (NYSE: COH); Coinstar, Inc. (NASDAQ: CSTR); ConocoPhillips (NYSE: COP); Digital Realty Trust, Inc. (NYSE: DLR); International Business Machines Corporation (NYSE: IBM); Leapfrog Enterprises Inc. (NYSE: LF); 3M Co. (NYSE: MMM); Macy’s Inc. (NYSE: M); OpenTable Inc. (NASDAQ: OPEN); Post Holdings Inc. (NYSE: POST); Sirius XM Radio Inc. (NASDAQ: SIRI); Sohu.com Inc. (NASDAQ: SOHU); True Religion Apparel, Inc. (NASDAQ: TRLG); and Zoltek Companies, Inc. (NASDAQ: ZOLT).
We have summarized each call and either added in trading color or provided a link to more data on each.
A123 Systems, Inc. (NASDAQ: AONE) was a highly influential call from a firm not very well known. The battery maker was downgraded on fears that Fiskar will not be able to keep buying from them. This fell 23% after it was cut to Sell at Wunderlich, but the price target was the real kicker: $0.50. Ouch.
Alcatel-Lucent S.A. (NYSE: ALU) was sure a wrong-way call of the week. The perpetually turning-around communications equipment maker was downgraded to ‘Sell’ at S&P Equity Research ahead of earnings and the stock closed up almost 13% at $2.19 on Friday.
American Superconductor Corporation (NASDAQ: AMSC) was inadvertently a really bad call because it got caught up in a weak stock market day and got caught on a day when alternative energy players took it on the chin. This one was raised to ‘Buy’ at Citigroup on Friday and closed don over 8% at $5.11 after opening at $5.36 on the day. Oops.
Annaly Capital Management Inc. (NYSE: NLY) had a rough week based in part on a mortgage foreclosure settlement. We expect the debate to continue over the real impact, but this high dividend yield mortgage REIT was downgraded to ‘Market Perform’ and the price target was cut to $16.00 from $17.50 by Friedman, Billings & Ramsey this last week.
Apple Inc. (NASDAQ: AAPL) keeps hitting new all-time highs each day. Apparently it is going to keep doing that for quite some time if Canaccord Genuity gets its way. That firm listed many reasons to raise it price target to $665 this last week.
Cisco Systems, Inc. (NASDAQ: CSCO) was better than what we feel the street gave it credit for on earnings. Credit Suisse only reiterated an ‘Outperform’ rating ahead of earnings, but what stood out was the $26.00 price target because that is about $4.50 higher than the consensus price target and that is also close to where the stock petered out in 2010.
Coach, Inc. (NYSE: COH) may be gutsy and may be an afterthought. It was recently given a strong tout by CNBC’s Jim Cramer as his luxury stock of choice, but on Friday it was raised started as ‘Buy’ with a target of $85 at Citigroup. This came on a day when the stock hit an all time high and closed at $74.54.
Coinstar, Inc. (NASDAQ: CSTR) is already up big over the last week, but we have never really considered it just as a value stock. Don’t tell that Zacks… On Friday it was named as Zacks’ Value Stock of the Day.
ConocoPhillips (NYSE: COP) was a very interesting call on Friday. The stock is in a restructuring and it was Raised to Buy at Deutsche Bank and the target was raised to $90 from $82 but here is why: the firm alleges that the price today basically gives investors the refining assets for free.
Digital Realty Trust, Inc. (NYSE: DLR) had kept running up and up, well beyond what we considered to be fair value. Cantor Fitzgerald saw the same thing and they initiated coverage with a Sell rating with the same assumptions.
International Business Machines Corporation (NYSE: IBM) has a lot of upside left to it if Stern Agee is correct. The firm went out with a street-high price target of $230 with its Buy rating this last week.
Leapfrog Enterprises Inc. (NYSE: LF) was very strange and was given the Strange Analyst Call of the Day on Tuesday. A firm we have never heard of called Ascendiant Capital Markets issued a Strong Buy rating and the stock closed up more than 7% at $6.83 on the day, and managed to climb back almost to $6.70 after going as low as $6.04 on Friday after its earnings report.
3M Co. (NYSE: MMM) was one of those downgrades that was a bit of a dud. The conglomerate was downgraded to Hold at Deutsche Bank after a new CEO was named and after it raised its dividend. George Buckley’s retirement has been a known event for probably close to a year.
Macy’s Inc. (NYSE: M) is very close to a multi-year high and recently put in new post-recession highs. Shares are up close to five-fold from the recession lows now. Is there still value there? Zacks named it the Value Stock of the Day on Monday. It is hard to call value by our take, but it takes two teams to have a ball game.
OpenTable Inc. (NASDAQ: OPEN) did not exactly hold up well after earnings and it remains an expensive stock on valuations. Here were the analyst calls we saw: Cut to Perform at Oppenheimer; Cut to Neutral at Credit Suisse; Raised to Overweight at Piper Jaffray.
Post Holdings Inc. (NYSE: POST) just started trading after its Ralcorp spin-off this last week. It still seems very under-followed. The food company was started as Overweight at Barclays and started as Hold at Stifel Nicolaus.
Sirius XM Radio Inc. (NASDAQ: SIRI) was initiated with new coverage at Barclays ahead of its earnings report. The problem is that it was as ‘Underweight’ with a $2.00 price target.
Sohu.com Inc. (NASDAQ: SOHU) had a week about as ugly as a hat filled with fingers after closing at $50.93 on Friday versus $63.05 the prior Friday. We saw target prices lowered by Credit Suisse and Nomura, but Deutsche Bank cut it to Buy on Thursday after Susquehanna cut the rating to Neutral early in the week.
True Religion Apparel, Inc. (NASDAQ: TRLG) got crushed on Friday after its earnings and outlook failed to entice buyers after a monster run-up in this maker of nigh-priced blue jeans. These analysts all wish they would have made the downgrade ahead of earnings rather than after earnings. Too bad. Downgrades were issued by Caris, Benchmark, and Brean Murray.
Zoltek Companies, Inc. (NASDAQ: ZOLT) had been running up after positive earnings, but that came to a sudden halt. The stock was cut to ‘Underperform’ by Needham and shares closed down over 15% from the high of the week.
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JON C. OGG