The 24/7 Wall St. Top Analyst Calls of the Week were in shares of the following: AT&T Inc. (NYSE: T); Automatic Data Processing, Inc. (NYSE: ADP); Best Buy Co., Inc. (NYSE: BBY); Chesapeake Energy Corporation (NYSE: CHK); Dendreon Corporation (NASDAQ: DNDN); E*TRADE Financial Corporation (NASDAQ: ETFC); J.C. Penney Company, Inc. (NYSE: JCP); J.P. Morgan Chase & Co. (NYSE: JPM); Goldman Sachs Group Inc. (NYSE: GS); Morgan Stanley (NYSE: MS); Jefferies Group, Inc. (NYSE: JEF); KLA-Tencor Corporation (NASDAQ: KLAC); Life Technologies Corporation (NASDAQ: LIFE); McDonald’s Corporation (NYSE: MCD); Michael Kors Holdings Limited (NYSE: KORS); Netflix, Inc. (NASDAQ: NFLX); Vistaprint NV (NASDAQ: VPRT); and Zynga Inc. (NASDAQ: ZNGA).

We have covered these in more detailed summaries below and some of these will have links to broader coverage calls.  

AT&T Inc. (NYSE: T) has been a bit under pressure and frankly its earnings did not help the situation for the bulls despite some positive metrics.  Now there is a bit more caution as the stock was reinstated in coverage on Friday at Credit Suisse: with a NEUTRAL and a mere $30.00 price target. This was one of Jim Cramer’s 4 FAVORITE DJIA PICKS FOR 2012 and it is the highest yield of the DJIA. 

Automatic Data Processing, Inc. (NYSE: ADP) met its second quarter earnings estimates this last week but apparently there are some valuation concerns despite the CFO seeing some continued positive trends in the economy.  On Thursday there were two downgrades: Cut to NEUTRAL at Citigroup and Cut to MARKET PERFORM at Wells Fargo.  Shares were around $57.oo pre-earnings and ended the week down at $55.34 and that may be another failed break-out attempt on the chart as the year high is $57.10.

Best Buy Co., Inc. (NYSE: BBY) is supposed to be down and out with absolutely nothing going for it.  In fact, its real risk is that no one under 30 or so may ever go there again.  Not so fast, according to Credit Suisse as the firm reinstated coverage with an OUTPERFORM rating and with a call of almost 30% upside to its $32.00 price target (versus $28.21 target from Thomson Reuters. This drove shares up 1.7% on Friday when the broad market was down.

Chesapeake Energy Corporation (NYSE: CHK) is the pure-play when it comes to investing in natural gas.  It is no secret that nat-gas is in the tank.  Apparently J.P.Morgan just couldn’t take the pressure any longer.  The analyst team there cut Chesapeake to UNDERWEIGHT on Thursday… That is just a “Sell” masqueraded by vocabulary.

Dendreon Corporation (NASDAQ: DNDN) was given two calls of caution or at least calls with no enthusiasm despite its shares having more than doubled from the lows.  Zacks maintained a NEUTRAL rating with a $14.00 target, while the team at Cantor Fitzgerald started it with only a HOLD rating.  Both calls came on Wednesday and Wednesday’s was Dendreon’s highest price of the week.

E*TRADE Financial Corporation (NASDAQ: ETFC) is still supposed to be a buyout target according to the great analyst predictions of 2012, even though the company’s review ended with nothing.  Earnings stank up the joint and the promise (or forecast) of exceptionally low rates through 2014 offers no comfort for earnings at online brokers.  The stock was cut to NEUTRAL at Goldman Sachs this week.  Keep in mind that Goldman Sachs was the firm hired to go find a buyer for E*TRADE.  Not promising at all.

Automatic Data Processing, Inc. (NYSE: ADP) Cut to Neutral at Citigroup; Cut to Market Perform at Wells Fargo.
Chesapeake Energy Corporation (NYSE: CHK) Cut to Underweight at JPMorgan.
The Charles Schwab Corporation (NYSE: SCHW) Cut to Neutral at JPMorgan.
Corning Inc. (NYSE: GLW) Cut to Underweight at Morgan Stanley.
E*TRADE Financial Corporation (NASDAQ: ETFC) Cut to Neutral at Goldman Sachs.
General Dynamics Corporation (NYSE: GD) Cut to Perform at Oppenheimer.
General Electric Co. (NYSE: GE) Reiterated Buy with $22 Target at Argus.
Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) Started as Perform at Williams Capital.
Inergy Midstream, L.P. (NYSE: NRGM) Started as Outperform with $26 target at Credit Suisse.
Illinois Tool Works Inc. (NYSE: ITW) Raised to Buy at BofA/ML.
Lam Research Corporation (NASDAQ: LRCX) Maintained Outperform with $56 target price at Credit Suisse.
Life Technologies Corporation (NASDAQ: LIFE) Raised To Outperform From Market Perform By Leerink Swann
Netflix, Inc. (NASDAQ: NFLX) Raised to Buy at Citigroup; Maintained Outperform and raised target to $125 at Credit Suisse.
NVIDIA Corporation (NASDAQ: NVDA) Raised to Positive at Susquehanna.
Ryanair Holdings plc (NASDAQ: RYAAY) Cut to Neutral at Nomura.
Vale S.A. (NYSE: VALE) Cut to Hold at Deutsche Bank.

If you enjoyed the top analyst calls, you can sign up in the box below to join our morning email list to receive news directly in your inbox each morning. We include major analyst upgrades and downgrades, IPO and M&A news, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

Your email address

subscribe

terms and conditions

JON C. OGG

ADTRAN, Inc. (NASDAQ: ADTN) Cut to Hold at Needham Research.
Advance Auto Parts (NYSE: AAP) Raised to Outperform at Credit Suisse.
Air Products and Chemical, Inc. (NYSE: APD) Cut to Neutral at JPMorgan.
Arcelor Mittal (NYSE: MT) Cut to Neutral at HSBC.
Automatic Data Processing. Inc. (NYSE: ADP) Started as Outperform at Credit Suisse.
BankUnited, Inc. (NYSE: BKU) Cut to Neutral at BofA/ML.
Boeing Co. (NYSE: BA) Cut to Sell at Societe Generale.
Cardtronics, Inc. (NASDAQ: CATM) Started as Outperform at Credit Suisse.
Cash America International (NYSE: CSH) Raised to Buy at Sterne Agee.
Chevron Corporation (NYSE: CVX) maintained Buy with $130 target but cut estimates at Argus.
Citigroup, Inc. (NYSE: C) Maintained Sell at Argus.
Human Genome Sciences Inc. (NASDAQ: HGSI) Started as Buy with $14 price target at Maxim.
Lamar Advertising Co. (NASDAQ: LAMR) maintained as Outperform and named as the Bull of the Day at Zacks.
MasterCard Inc. (NYSE: MA) Started as Outperform at Credit Suisse.
RadioShack Corporation (NYSE: RSH) Cut to Underperform at Credit Suisse.
Scotts Miracle-Gro (NYSE: SMG) Cut to Underperform at BMO Capital.
UBS AG (NYSE: UBS) Raised to Overweight at Morgan Stanley.
Veolia Environnement (NYSE: VE) Cut to Neutral at HSBC.
Visa, Inc. (NYSE: V) Started as Outperform at Credit Suisse.
Weatherford International Inc. (NYSE: WFT) named as value stock of the day at Zacks.

Read Also: Jim Cramer touts Broadcom Corporation (NASDAQ: BRCM) as a cheap catch-up semiconductor stock. This creates a chart versus fundamental event in price.

If you enjoyed the top analyst calls, you can sign up in the box below to join our morning email list to receive news directly in your inbox each morning. We include major analyst upgrades and downgrades, IPO and M&A news, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

JON C. OGG

Adtran Inc. (NASDAQ: ADTN) Reiterated Buy and $49 target at Argus.
Allergan Inc. (NYSE: AGN) Started as Buy at Deutsche Bank.
Apple Inc. (NASDAQ: AAPL) Maintained Buy with $490 target at BofA/ML.
Automatic Data Processing Inc. (NYSE: ADP) Reiterated Buy and $60 Target at Argus.
Barrick Gold Corporation (NYSE: ABX) named value stock of the day at Zacks.
Citigroup Inc. (NYSE: C) Started as Market Perform at Wells Fargo.
Expedia, Inc. (NASDAQ: EXPE) named Bull of the Day at Zacks.
Gilead Sciences Inc. (NASDAQ: GILD) Raised to Buy at Goldman Sachs.
LinkedIn Corporation (NYSE: LNKD) Started as Overweight at Barclays.
Mastercard Incorporated (NYSE: MA) Cut to Neutral at Baird.
Nokia Corporation (NYSE: NOK) Raised to Buy at Societe Generale.
OpenTable, Inc. (NASDAQ: OPEN) Started as Underweight at Barclays.
Perfect World Co., Ltd. (NASDAQ: PWRD) Cut to Neutral at Credit Suisse.
Research in Motion Ltd. (NASDAQ: RIMM) Cut to Market Perform at Raymond James; Maintained Neutral but cut target to $30 at BofA/ML.
Royal Gold, Inc. (NASDAQ: RGLD) Cut to Neutral at HSBC.
Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) Raised to Buy at BofA/ML.
TD AMERITRADE Holding Corporation (NASDAQ: AMTD) Raised to Buy at Citigroup.
Veeco Instruments Inc. (NASDAQ: VECO) Cut to Neutral at BofA/ML.

Your email address

subscribe

terms and conditions

JON C. OGG

• Automatic Data Processing Inc. (NYSE: ADP) at AAA/Stable/A-1+
• ExxonMobil Corporation (NYSE: XOM) at AAA/Stable/A-1+
• Johnson & Johnson (NYSE: JNJ) at AAA/Stable/A-1+
• Microsoft Corporation (NASDAQ: MSFT) at AAA/Stable/A-1+
• General Electric Co. (NYSE: GE) at AA+/Stable/A-1+
• W.W. Grainger Inc. (NYSE: GWW) at AA+/Stable/A-1+

S&P noted that these companies would be able to meet their ability to fulfill their financial obligations even if a sovereign default scenario arises.  S&P called these out as having excellent business risk profiles.

Even before the downgrade from S&P, it was our assumption that a downgrade was coming.  We even gave a list of the other “AAA” nations and outlined four more nations we think may lose their “AAA” ratings based on collateral damage.  If we are not “AAA” there are other “AAA” ratings that aren’t deserved as well.

JON C. OGG

Years of slow growth and aging populations in the West could hasten the rise of BRIC economies (Reuters)

Google+ (NASDAQ: GOOG) and the Apple (NASDAQ: AAPL) iCloud product have kept app developers business (Reuters)

Google faces nine antitrust claims in the EU investigation (Reuters)

U.S. broadband speeds are close to those providers promote according to the The Federal Communications Commission (Reuters)

The fight between Amazon (NASDAQ: AMZN) and states over sales taxes has worsened (WSJ)

Research-In-Motion (NASDAQ: RIMM) hopes to improve sales with a line of new devices (WSJ)

Banks in Europe try to improve balance sheets as EU financials worsen (WSJ)

The head of the People’s Bank of China said that U.S. financial problems threaten the global financial markets (WSJ)

Home listings have fallen but that has not quickened sales (WSJ)

Capital markets investors has become concerned about the financial viability of Italy and Spain (WSJ)

ComScore has begun to market a product to show the effectiveness of ads on Facebook (WSJ)

Republicans have to deal with negative fall-out from decisions to cut defense (WSJ)

The Organization for Economic Cooperation and Development released data that show global inflation had slowed (WSJ)

Shares in MetroPCS (NYSE: PCS) dropped as much as 30% after weak earnings (WSJ)

Apple and Samsung have begun aggressive competition for the tablet PC market in Australia (WSJ)

South Korea’s central bank bought gold for the first time in 13 years (WSJ)

Bank of America (NYSE: BAC) may settle mortgage fraud cases with loan forgiveness for some of its home debt holders (WSJ)

Saudi Arabia will erect the world’s tallest building (WSJ)

Only four U.S. companies have Aaa ratings: Microsoft (NASDAQ: MSFT), Johnson & Johnson (NYSE: JNJ), ADP (NYSE: ADP), and Exxon Mobile (NYSE: XOM) (NYT)

CBS (NYSE: CBS) profits doubled (NYT)

Lobbyists will press client needs as the U.S. cuts expenses (FT)

Apple may be vulnerable to cyber-attacks (FT)

T-Mobile hemorrhages subscribers ahead of the AT&T (NYSE: T) takeover (Bloomberg)

Protests over austerity grew in Greece  (Bloomberg)

Douglas A. McIntyre

Worst still, if a deal is reached and the debt ceiling is raised only for the short term, the agencies may still downgrade. They may view the legislation as simply an act of “kicking the can down the road.”

U.S. bonds have always been considered a safe haven. Debt problems in Europe have caused international capital market investors to buy U.S. paper. This has kept the interest rates the federal government has to pay very low, despite unprecedented levels of American borrowing. The safe haven status could be ruined by a rating agency action.

24/7 Wall St. examined investments that would be safe in the event of a default. This does not mean they will have high yields or that they are inexpensive. It means that they are assets that are unlikely to lose their value. Additionally, they are holdings individual investors can buy. Of course, asset managers could provide a fairly long list of low-volatility and low-return assets.

The debt ceiling has been reached before and not raised immediately. The trouble did not cause stock markets to collapse at all. In the fall of 1995, it was reached, but not raised until the following spring. Until March of 1996, the issuance of new debt was suspended. During that period, the Treasury took steps to raise funds to meet federal obligations that did not exceed the debt ceiling. In the event the ceiling is not raised by August 2, investors would be happy to see a reprise like the 1995 to 1996 period. If that period is a precedent, no one would have to sell the stocks they own, or buy gold or silver to maintain the value of their portfolios. The predictions are so dire now, however, that fewer and fewer investors are willing to sit and hold their current portfolios.

Hackers hit ADP servers and worry grows about safety of payroll data.

Market revolt about Target earnings.

The Flame Index started as a research tool in 2008 at the NY Innovation Design Lab (nyidlab). It was used as a general metric to evaluate companies and their risk in the media. Publicly traded Fortune 500 companies are used as a measure to calculate an overall market of negative news and the companies are ranked within that market.

Data and ranking provided by the Flame Index.

We are reviewing events or ongoing news in shares of Automatic Data Processing Inc. (NYSE: ADP), CSX Corporation (NYSE: CSX), Five Star Quality Care Inc. (NYSE: FVE), Gilead Sciences, Inc. (NASDAQ: GILD), Live Nation Entertainment, Inc. (NYSE: LYV), Lululemon Athletica Inc. (NASDAQ: LULU), Rambus Inc. (NASDAQ: RMBS), Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN), Research-in-Motion Ltd. (NASDAQ: RIMM), SIRIUS XM Radio Inc. (NASDAQ: SIRI), Pandora Media Inc. (NYSE: P), Six Flags Entertainment Corp. (NYSE: SIX), and Valeant Pharmaceuticals International, Inc. (NYSE: VRX).

Inside each preview we have shown what the news or upcoming event is, given price indications, and added color on each if applicable.  Also, we had ten top analyst calls of the week that are carry-over events from last week and we also have a full detailed earnings calendar with previews for the top ten companies reporting earnings this coming week in separate articles.

Automatic Data Processing Inc. (NYSE: ADP) announced on Friday evening that its board of directors had raised its share buyback plan with an additional 35 million shares of common stock on top of about 15 million shares remaining under the previous buyback plan.  If executed entirely, this would be about 10% of its entire stock’s float.

CSX Corporation (NYSE: CSX) is set to split 3-for-1 on Thursday after it declared that split in early May.  This is one of the many pending and current splits, a trend we are seeing more of than we have in years. Shares closed at $73.48 Friday and the 52-week range is $46.51 to $80.42.

Five Star Quality Care Inc. (NYSE: FVE) is expected to have a secondary offering of up to 10 million shares mid-week, with all of the shares expected to be sold by the company.  Shares were pounded on the announcement of the deal with a drop from $7.20 before to $6.27 on the day of the news and then to close out the week at $6.10.  Its market cap is only about $220 million share its 52-week trading range is $2.72 to $8.95.

Gilead Sciences, Inc. (NASDAQ: GILD) disclosed a subpoena from the Department of Justice on Friday after the close, which included requests for documentation on testing of nearly all its products.  The wording also noted “criminal” on top of civil in the subpoena.  If Gilead was Lucille Ball, it would have “splaining” to do.  Surprisingly, shares were only down a little more than 2% at $39.40 after the close on the news. Its 52-week range is $31.73 to $42.93.

Live Nation Entertainment, Inc. (NYSE: LYV) was up 6% Friday on word that Liberty’s John Malone and Live Nation CEO Irving Azoff were in talks to possibly take Live Nation private.  At $10.92, its 52-week trading range is $8.17 to $12.48, but this stock stalled out at $16.00 in April-2010 and has been dead since.

The wide variations in the January report from ADP and the Labor Department has been attributed to the way workers are counted. ADP counts everyone on a payroll, whether or not the worker was paid during that month or not. The Labor Department only counts workers who are paid during a vary narrow sample period. Thus, people who worked during the month but were either sick or snowed-in and couldn’t pick up their paychecks are not included in the Department of Labor counts.

Analysts are expecting the Labor Department to report non-farm payroll gains of 200,000 in February, along with an unemployment rate of 9.1%, slightly higher than the 9.0% rate for January. Again, the unemployment rate could have been affected by the snowy January weather.

The good news on new jobs and employment could be moderated by the current demands in the US Congress and in many state legislatures to cut government spending. Because governments spend a lot of money on people, for spending cuts to have any impact at all means that government workers will have to be laid off.

In most states, the largest number of public employees are teachers and other school staff. Police officers, firefighters, and corrections officers make up the bulk of the rest. These workers are represented by public employee unions in many states, and, as we’ve seen in Wisconsin, the desire to cut spending can lead to a battle over union representation.

The impact on the recovering economy by the firing of hundreds of thousands of public employees shouldn’t be to difficult to figure out. At the very least, economic growth will slow down, and estimates of 3%-4% US economic growth in 2011 will surely fall, probably by half a point, and in the worst case by a full point.

It’s a little difficult to square the supposed benefits of government spending cuts with the reality of what that will mean for the US economy. The US economy is set to experience yet another dose of be-careful-what-you-wish-for medicine.

Paul Ausick