It is the first full trading week of 2014, and analysts are out with many ratings changes this Tuesday. Stocks have slid marginally since the end of 2013 after a stellar year, and investors are continuing to position themselves for 2014. 24/7 Wall St. reviews many Wall Street analyst research reports each morning in order to find new investment ideas for our readers. Some of these analyst calls are stocks to buy and some are stocks to sell. These are this Tuesday’s top analyst upgrades, downgrades and initiations seen from Wall Street research firms.
Capital One Financial Corp. (NYSE: COF) was kept as an official Buy rating, but the credit card issuer and banking company was added to the prized Conviction Buy list at Goldman Sachs. The firm’s price target was raised to $90 from $80 in the call. After it closed at $76.59, its consensus price target was $79.19, and note that the prior street high price target from analysts was $88 before this new $90 price target.
Chesapeake Energy Corp. (NYSE: CHK) was downgraded to Neutral from Buy and the price target was cut to $31 at Bank of America Merrill Lynch. The firm said that its recovery limits upside as most of that recovery is priced into the stock. Now the investment case transitions into an execution story, and targets at this point were called imprecise with only modest upside.
LinkedIn Corp. (NYSE: LNKD) was downgraded to Neutral from Buy and the price target was cut to $240 from $270 (versus a $203.92 close) at Merrill Lynch. The team called the company a best of breed franchise, but it believes that the stock may take a pause on tougher comparable growth numbers. Merrill Lynch is below the street on 2014 and 2015 earnings estimates. It also said that LinkedIn could be range bound until 2015 estimates allow for more upside.
Lululemon Athletica Inc. (NASDAQ: LULU) is trading higher by 2% after the troubled yoga-themed and exercise apparel maker was raised to Buy from Neutral at D.A. Davidson. Its price target was raised to $73 from $67 in the call, implying about 26% upside from the $57.78 closing price. The consensus price target is right at about $70 now.
Netflix Inc. (NASDAQ: NFLX) was downgraded to Underweight from Equal Weight and the price target was lowered to $310 from $330 at Morgan Stanley. Keep in mind that the target was already under the closing price of $359.57. Maybe 200 times current earnings and 90 times expected 2014 earnings is just too high of a valuation.
Other key analyst calls were as follows:
Aegon N.V. (NYSE: AEG) was downgraded to Neutral from Overweight at J.P. Morgan.
Charles Schwab Corp. (NYSE: SCHW) and TD Ameritrade Holding Corp. (NYSE: AMTD) were both downgraded to Neutral from Buy at Citigroup.
Check Point Software Technologies Ltd. (NASDAQ: CHKP) was downgraded to Neutral from Buy at UBS, although this was also just featured as a top cyber security stock to buy for 2014 in another analyst montage for the sector.
Chubb Corp. (NYSE: CB) was downgraded to Equal Weight from Overweight by Barclays.
Humana Inc. (NYSE: HUM) was downgraded to Sell from an already cautious Hold rating and the price target is now $87 (versus a $100.76 close) at Deutsche Bank. The firm did raise the rating on DJIA component UnitedHealth Group Inc. (NYSE: UNH) to Buy from Hold with an $85 price target (versus a $74.24 close).
International Game Technology (NYSE: IGT) was downgraded to Hold from Buy at Argus, based on on decelerating growth prospects and near-term headwinds.
Logitech International S.A. (NASDAQ: LOGI) was raised up to Equal Weight from Underweight by Barclays.
Mattel Inc. (NASDAQ: MAT) was downgraded to Sell from an already cautious Neutral rating, and with a $40 price target (versus a $46.62 closing price), at Goldman Sachs.
MGM Resorts International (NYSE: MGM) was raised to Overweight from Equal Weight at Morgan Stanley.
Mylan Inc. (NASDAQ: MYL) was started as Outperform at RBC Capital Markets.
Senior Housing Properties Trust (NYSE: SNH) was downgraded to Underperform from Market Perform at Wells Fargo.
STMicroelectronics N.V. (NYSE: STM) was downgraded to Underweight from Equal Weight by Barclays.
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) was started with a Sector Perform rating at RBC Capital Markets.
Yum! Brands Inc. (NYSE: YUM) was upgraded to the Top Pick list from an Outperform rating and the price target was raised to $87 from $85 at RBC Capital Markets.