Each morning during the week we publish the top analyst upgrades and downgrades that we see in the market. After looking deeper through the calls individually, there are always some critical research notes that are either very insightful or that have very peculiar observations or that have extreme price target objectives. This week we identified six such research calls from analysts. Those calls were in shares of Alkermes, Inc. (NASDAQ: ALKS), Apollo Global Management, LLC (NYSE: APO), Dean Foods Co. (NYSE: DF), E*TRADE Financial Corporation (NASDAQ: ETFC), Penson Worldwide Inc (NASDAQ: PNSN), and in SunPower Corporation (NASDAQ: SPWRA).
Alkermes, Inc. (NASDAQ: ALKS) had a game-changing week after it is now going to be profit-oriented after its ELAN Corp. plc (NYSE: ELN) deal was announced this week. We have seen analysts chime in about what this means. Cowen raised it to Outperform and Leerink Swann raised it to Outperform. We expect more positive calls next week as it reports earnings. The close the prior Friday was $14.47 and the close this Friday was $17.76 after closing up each day of the week. Our more detailed analysis is available at BioHealthInvestor.com.
Apollo Global Management, LLC (NYSE: APO) has been public for just over a month and its quiet period ended for research analysts. This was trading under its IPO price yet all but only one analyst at Wells Fargo was cautious with a “Market Perform” rating. All of the other calls were “Buy/Outperform/Overweight.” The initial move went from $17.97 the prior Friday and then the shares (units) rose to $18.50 on Monday and then to $18.71 by Tuesday. Unfortunately, shares closed at $18.27 on Friday so this remains a pressured IPO.
Dean Foods Co. (NYSE: DF) was raised to “Buy” at Goldman Sachs on Friday after earnings this week. More importantly, Goldman Sachs said that Dean Foods could actually double over the next two years. What makes this call stand out even more is Dean Foods has already almost doubled from its lows of the last year. In 2007, this milk and dairy company’s stock traded north of $40.00. The stock closed at $13.41 this week after earnings, up more than 20% from the close of $10.97 the prior Friday.
E*TRADE Financial Corporation (NASDAQ: ETFC) was given two calls in its favor this week. The turnaround online broker raised to Buy at Goldman Sachs with a $19 price target early this week. Then came another upgrade to “Strong Buy” from “Outperform” at Raymond James. These calls fit in a bit with our take that goes back to last year and even in 2009… E*TRADE will be acquired. Now its turnaround is finally producing positive earnings and the company’s writedowns and charge-offs are getting to the point where there is a light at the end of the tunnel. That light does not even look like it is a freight train. These calls had limited price impact as the close a week earlier was $15.92 and the close on this Friday was $16.06.
Penson Worldwide Inc (NASDAQ: PNSN) got what will feel like a very bad call this week. One analyst downgrade came from Sandler O’Neill maintaining a “Hold” rating but cutting the target to $4.50 from $5.50. It could be inferred that the research call started the move when shares were getting clobbered this last week, but our take is that the call exacerbated the move on issues tied to charges on a municipal bond issue. Whether the call was the catalyst or just an accelerating factor is arguable as the issue has been there before, but the move was extreme. Shares were at $5.35 the Friday before, and the stock hit a low of $2.73 before the company issued clarification news. The good news is that shares had recovered to $3.34 by Friday’s close, making a recovery bounce of some 22%. We’ll have to see if other firms can support the company this coming week.
SunPower Corporation (NASDAQ: SPWRA) was supposed to be a game-changing stake as a near-merger with Total when that stake was recently taken. That created a move up from about $16 to $21 when it came about. At the end of the week we saw two very negative calls … SunPower was maintained as “Sell” at Auriga and it was downgraded to “Hold” at ThinkEquity. Instead of rising, SunPower had a stagnant week. It closed at $21.41 a week earlier and closed at $21.23 for roughly a 1% loss this last week.
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JON C. OGG