Investors and traders alike have been positioning their portfolios and assets going into year-end, at the same time that stocks keep challenging all-time higher highs almost each week. 24/7 Wall St. reviews dozens of Wall Street analyst reports each morning to find ideas for stocks to buy and stocks to sell for our readers. These are this Thursday’s top analyst upgrades, downgrades and initiations seen from Wall Street research firms.
Citigroup Inc. (NYSE: C) is being defended with six reasons to stay long into 2014 by Bank of America Merrill Lynch. Its $61 price target implies a 20% total return for 2014. The firm said that Citigroup remains one of the most compelling ideas among large-cap financials at this mid-stage of the recovery, trading below tangible book value and with plenty of capital. The firm even called it a “self-help” story.
General Electric Co. (NYSE: GE) was reiterated as Buy with a $29 price target at Merrill Lynch on Thursday. Where this call gets interesting is not the rating itself, but in the specific mention and outlook for its U.S. retail finance business due to be spun out. The firm believes the new structure of the plan is more tax efficient and that GECC can release up to $30 billion of incremental capital by 2016. Merrill Lynch also believes that the move will lead to earnings multiple expansion afterward.
Melco Crown Entertainment Ltd. (NASDAQ: MPEL) was called a Top Pick for 2014 by Sterne Agee. The rating is reiterated as Buy with a $46 price target (versus $37.41 close) after management meetings this week. The Macau casino group apparently reiterated that it is reviewing its shareholder capital return policy, including dividends and share repurchases. The company also anticipates gross gaming revenue growth of 15% to 20%, above the consensus estimate of about 12%.
Oracle Corp. (NYSE: ORCL) was downgraded to Equal Weight from Overweight at Morgan Stanley. The enterprise software giant was also downgraded to Sector Perform from Outperform with a $35 price target at RBC Capital Markets. Oracle shares were trading down 2.6% around $33.90 on the dual downgrades, and we would point out that Oracle shares have fallen more than $1 in the past two trading sessions.
Other calls worth noting on Thursday were as follows:
Apache Corp. (NYSE: APA) was downgraded to Neutral from Buy at Citigroup.
ARM Holdings PLC (NASDAQ: ARMH) was started with an Outperform rating at FBR Capital Markets.
Costco Wholesale Corp. (NASDAQ: COST) was reiterated as Buy and the price target was raised to $130 from $125 at Argus.
Ericsson (NASDAQ: ERIC) was raised to Buy from Hold at Societe Generale.
Marathon Oil Corp. (NYSE: MRO) was downgraded to Neutral from Buy at Citigroup.
Micron Technology Inc. (NASDAQ: MU) was raised to Buy from Neutral and the price target was raised to $30 from $16 at Nomura.
Nokia Corp. (NYSE: NOK) was downgraded to Hold from Buy at Societe Generale.
Southwest Airlines Co. (NYSE: LUV) was raised to Buy from Neutral and the price target was raised to $23 from $18 at Merrill Lynch.
Tetra Technologies Inc. (NYSE: TTI) was started as Neutral with a $15 price target. What is interesting for a Neutral rating is that the closing price of $11.75 implies upside of almost 30%.
Weyerhaeuser Co. (NYSE: WY) initiated with an Overweight rating at J.P. Morgan.
Yelp Inc. (NYSE: YELP) initiated at Neutral at B. Riley
Xilinx Inx. (NASDAQ: XLNX) was raised to Buy from Neutral and the price target was raised to $50 from $40 at Nomura.