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.

The unofficial closing bells put the DJIA down about 74 points to 12,660.61 (-0.58%), the NASDAQ rose more than 11 points (0.40%) to 2,816.55, and the S&P 500 fell -0.16% or about 2 points to 1,316.33.

There were several analyst upgrades and downgrades today, including Best Buy Co. Inc. (NYSE: BBY) started as ‘outperform’ with a $32 target price at Credit Suisse; Sandridge Energy Inc. (NYSE: SD) started as ‘buy’ at Canaccord Genuity; The Allstate Corp. (NYSE: ALL) started as ‘outperform’ at William Blair; J.C. Penney Co. Inc. (NYSE: JCP) raised to ‘overweight’ at Piper Jaffray and maintained as ‘buy’ with target price raised to $49 at Argus; and Kimco Realty Crop. (NYSE: KIM) cut to ‘neutral’ at Citigroup.

Earnings reports since markets closed on last night have led to some price changes as of the last half hour of trading today: American Electric Power Co. Inc. (NYSE: AEP) is down -2.62% at $40.20; Chevron Corp. (NYSE: CVX) is down -2.10% at $104.35; Dominion Resources Inc. (NYSE: D) is down -1.91% at $49.88; Ford Motor Co. (NYSE: F) is down -3.69% at $12.27; Honeywell International Inc. (NYSE: HON) is up 1.31% at $58.59; and Proctor & Gamble Co. (NYSE: PG) is down -0.51% at $64.47.

Other standouts from today include the following stocks:

Solutia Inc. (NYSE: SOA) is up more than 40% at $27.35, after posting a new 52-week high of $27.85 earlier today. The specialty chemicals company has agreed to be acquired by Eastman Chemical Co. (NYSE: EMN) for $3.4 billion in cash and stock.

Cepheid (NASDAQ: CPHD) is up more than 25% at $42.98 after posting new 52-week high of $43.03 earlier today. The medical diagnostics equipment maker has boosted its sales outlook and is enjoying a halo effect from the hostile takeover bid for Illumina Inc. (NASDAQ: ILMN).

Infinity Pharmaceuticals Inc. (NASDAQ: INFI) is down -40% at $5.97. The drug maker has cancelled further trials of a pancreatic cancer drug that does not perform better than placebo.

Inergy L.P. (NYSE: NRGY) is down nearly -24% at $17.31 after posting a new 52-week low of $17.23 earlier today. The natural gas distribution company is cutting payouts to its unitholders.

Riverbed Technology Inc. (NASDAQ: RVBD) is down nearly -19% at $24.38. The networking technology company warned this morning that first-quarter sales growth would not meet previous expectations.

Stay tuned for Monday. We have noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – Personal income and outlays
• 11:30 a.m. – 3- and 6-month Treasury bill auctions

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Have a great weekend.

Paul Ausick

The Allstate Corporation (NYSE: ALL) Started as Outperform at William Blair.
AT&T Inc. (NYSE: T) Reinstated as Neutral with $30 price target at Credit Suisse.
Best Buy Co., Inc. (NYSE: BBY) Started as Outperform with $32 target at Credit Suisse.
Celgene Corporation (NASDAQ: CELG) Cut to Hold on Valuation at Argus.
Cliffs Natural Resources (NYSE: CLF) Cut to Neutral at Credit Suisse.
Equity One Inc. (NYSE: EQY) Cut to Sell at Citigroup.
Hartford Financial Services Group (NYSE: HIG) Cut to Neutral at JPMorgan.
J.C. Penney Company, Inc. (NYSE: JCP) Raised to Overweight at Piper Jaffray; Maintained as Buy but raised price target to $49 at Argus.
Juniper Networks Inc. (NYSE: JNPR) Cut to Market Perform at Morgan Keegan.
Kimco Realty Corporation (NYSE: KIM) Cut to Neutral at Citigroup.
The Progressive Corporation (NYSE: PGR) Started as Underperform at William Blair.
Sandridge Energy Inc. (NYSE: SD) Started as Buy at Citigroup.
Synaptics Inc. (NASDAQ: SYNA) Raised to Buy at Needham; Cut to Neutral at Stern Agee.
Under Armour, Inc. (NYSE: UA) Reiterated as Buy with $102 price target at Canaccord Genuity.
Vistaprint NV (NASDAQ: VPRT) Cut to Underperform as Bear of the Day at Zacks.
ZOLL Medical Corporation (NASDAQ: ZOLL) maintained Outperform as Bull of the Day at Zacks.

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JON C. OGG

Neil Ashe was the president of CBS (NYSE: CBS) Interactive before he moved to the job as president and CEO of Walmart’s Global eCommerce business. Walmart obviously has web operations outside America, but without a strong performance of the e-commerce business in its home country, its web division cannot succeed.

The choice of Ashe is a bit odd. He oversaw CBS Sports and News online, along with the tech site company CNET. He also ran the media firm’s overseas sites. The belief that stepping from content to e-commerce is likely to work is hard to explain.

The problem that Walmart has online is not directly related to who runs the e-commerce operations. Walmart’s U.S. store sales have not grown in the past year, and its U.S. revenue has barely increased. This is despite the fact that, after Amazon.com, Walmart’s sites are the second most visited e-commerce sites in America.

Walmart’s U.S. problems have been described as troubled in two ways. The first is that top merchandising executives at the company have done a poor job as they decide what inventory to put into their stores. The other is that Walmart’s price advantages are no longer substantial enough to keep customers from the decision to go to other retailers, like Target (NYSE: TGT). What Walmart cannot do with its bricks-and-mortar stores, it cannot accomplish online. An overall lack of demand cannot be made up by websites. Retailers like Best Buy (NYSE: BBY) and Barnes & Noble (NYSE: BKS) have already proven this.

Walmart’s new online CEO will have his hands tied no matter how skillful and experienced he is. Well over 95% of Walmart’s sales are made in its stores, and in the U.S., the traffic to those stores has slowed. An adroit e-commerce operation, hampered by the same prices and inventories, will not do better than Walmart’s primary business.

Douglas A. McIntyre

Read the ten most hated companies in America

Research about companies comes in two sets. One is public research about consumer satisfaction, customer care, pricing of products and services, and brand impressions. Wall St. research takes into account another set of factors, which include present earnings, profit forecasts, product development and quality, and brand valuations.

Some of the companies on this list are widely despised because of the businesses that they are in. In an economic environment where resources are stretched, an airline or retail operation that has millions of customers is likely to make a lot of enemies. Similarly, banks and other corporations with a large number of retail outlets are at a disadvantage compared with businesses with few customers. Some of the corporations on this list also have had to fire significant numbers of employees due to the recession. Downsizing causes poor morale, increases the workload of the remaining staff and affects customer satisfaction when service is poorer.

We examined each company based on several criteria. We considered total return to shareholders in comparison to the broader market and other companies in the same sector during the last year. We reviewed financial analyst opinions on those companies that are public. We analyzed data from a broad array of sources, including Consumer Reports, JD Power, the MSN/Zogby Poll, ForeSee and the University of Michigan American Customer Satisfaction Index. We also considered negative press based on 24/7 Wall St.’s analysis of media coverage and the Flame Index, which uses a proprietary algorithm to review more than 12,000 websites and ranks companies based on the frequency of negative words. Finally, we considered the views of taxpayers, Congress and the White House — where applicable.

Several companies that should have been on the list based on performance and public perception during the financial crisis did not make it. For example, it would be easy to argue that mortgage giants Fannie Mae and Freddie Mac should be here. The bankruptcy and maintenance of the two by the federal government will cost taxpayers between $224 billion and $360 billion, according to the Federal Housing Finance Agency (FHFA). But, Fannie Mae and Freddie Mac are no longer stand-alone companies in any normal sense. Their shares have been delisted. Each is in effect a ward of the U.S. government with no ability to control its own fate through the actions of management or public shareholders.

The U.S. Postal Service could also be a candidate for the list. It has cost taxpayers billions of dollars, and it lost $5.1 billion in its last fiscal year alone. However, the Postmaster General and his staff have little or no control over the eventual fate of the USPS. Congress decides how and to what extent it will be funded. That means Congress essentially controls how many workers and offices will exist, and even, based on funding, how often the mail will be delivered.

It is worth noting that some of the companies on the list may have done very poorly by some measures, and well by others. A few of the most hated companies have had good stock performances. Others may have satisfied customers. All of this was taken into account when the decisions for the final list were made.

The following are 24/7 Wall St.’s 10 Most Hated Companies for 2011, in no particular order.

Why would a buyer look now?  It is currently priced in its stock at only 3.6-times free cash flow and that is the cheapest valuation out of retail stocks valued at more than $1 billion.  Its current expected P/E ratio is also under 8 and if it makes the consensus target for the year ahead it trades at barely 6-times expected earnings.

There are many problems here, some of which are the same that have faced GameStop Corporation (NYSE: GME).  While GameStop is a video game play, it too has been bantered around as a potential private equity takeover name in the past with equally cheap valuations.

The real thorn in Best Buy’s side is that many buyers now go to Wal-Mart Stores Inc. (NYSE: WMT) and the young crowd goes through Amazon.com Inc. (NASDAQ: AMZN) and a myriad of other online retailers.  While Best Buy now offers online sales from it and other merchants, Amazon and others just got too big of a jump.
Bloomberg went on to note, “Best Buy can still enrich leveraged buyout firms after generating $2.44 billion in free cash in the past year, Telsey Advisory Group and Morningstar Inc. said. The $8.14 billion company could get at least $37 a share in a takeover, according to Thornburg Investment Management, 59 percent more than its price yesterday.”

Before you rush to call this one a private equity buyout target hopeful that will definitely come to fruition, Best Buy may have to face even more pain before the company would agree to a buyout.  After closing at $23.23 on Wednesday its shares are not even indicated higher.   Today’s reporting from elsewhere may be more posturing than real speculation. We would not even formally classify this as a rumor at this point.

JON C. OGG

The MF Global disaster prompts requests that the systems for grain trading to be changed. (Reuters)

Chinese investment tradition likely would prevent money from moving quickly into troubled Europe. (Reuters)

A new KPMG study shows that shoppers are unwilling, in most cases, to use mobile phones to make payments for retail goods. (Reuters)

Bank of America (NYSE: BAC) may seek to sell more assets to strengthen its balance sheet. (Reuters)

Germany’s Security Research Labs says GSM phones are targets for scams. (Reuters)

NTT Docomo (NYSE: DCM) will begin to develop smartphone chips with Samsung. (Reuters)

Google’s (NASDAQ: GOOG) new online travel initiatives begin to change that industry. (WSJ)

The SEC uses high-tech systems to look for trading abuses at hedge funds. (WSJ)

A glut of solar manufacturers continues to bring down industry prices and push companies out of the market. (WSJ)

Toyota (NYSE: TM) brings out a new small hybrid. (WSJ)

Hollywood box office sales likely will drop for the second year in a row. (WSJ)

Best Buy (NYSE: BBY) admits it was unable to deliver certain items ordered for Christmas and apologizes. (WSJ)

The success of shale gas touches off the creation of a number of new plants that use the fuel. (WSJ)

Research In Motion’s (NASDAQ: RIMM) independent directors are under pressure to replace top management or sell the company. (WSJ)

New York’s case against Intel (NASDAQ: INTC) over antitrust issues likely will be heard in state court. (WSJ)

U.S. stocks significantly outperform those in other regions. (WSJ)

U.S. corn futures rise on concerns about production from Argentina and Brazil. (WSJ)

TV prices drop enough that supplier margins become perilously small. (NYT)

China’s state power companies help push development of electric cars. (NYT)

The economic minister of Spain expects growth to return to recession levels next year. (NYT)

France’s unemployment rate hits a 12-year high. (FT)

The yen continues to gain as actions of the Japanese government have little effect in reversing it. (Bloomberg)

Profits at Chinese companies slow this year. (Bloomberg)

Douglas A. McIntyre

Best Buy (NYSE: BBY), Gap (NYSE: GPS) and Sears Holdings (NASDAQ: SHLD) shares sold down sharply in the fourth quarter. Shares of Walmart (NYSE: WMT), JCPenney (NYSE: JCP) and Macy’s (NYSE: M), though, remained steady or gained. This despite the fact that these three are threaten nearly as much as other bricks-and-mortar retailers are as e-commerce becomes a larger part of the retail market.

Concerns about the three weak retailer stocks are very specific.

Best Buy has been unable to thwart Amazon.com’s (NASDAQ: AMZN) rapid expansion into consumer electronics and digital content. These businesses are now nearly as strong as the e-book and print book businesses are for the largest e-commerce company in the world. Like Barnes & Noble (NYSE: BKS), Best Buy failed to create a web presence or online price model that would allow it to defend itself against Amazon.

Sears Holding’s problems are largely different from those of Best Buy. Kmart and Sears stores have not changed much in the past five years. The parent has elected not to commit the capital to upgrade its locations. Sears might have done better if its stores were freshened like those owned by Walmart, Macy’s and Target (NYSE: TGT). Sears management has witnessed how being cheap can get expensive when customer retention is at stake.

The reasons for the failure at Gap fall into another category. The retailer had the instinct to remain on the leading edge of mid-priced fashion. It lost that edge two or three years ago for reasons that are unclear. Gap has been overwhelmed since then by the success of smaller retailers like Abercrombie & Fitch (NYSE: ANF).

The retail industry, like most others, will lose some of its largest companies over the next few years. Best Buy, Sears and Gap are likely to be among them.

Douglas A. McIntyre

The U.S. approves a Deutsche Boerse deal to merge with NYSE Euronext (NYSE: NYX). (Reuters)

The International Monetary Fund presses to sharply increase its size and give more rights to large developing nations like China. (Reuters)

AT&T (NYSE: T) gets regulatory approval to buy some spectrum from Qualcomm (NASDAQ: QCOM). (Reuters)

A German court makes a preliminary ruling that Samsung’s tablet does not resemble the Apple (NASDAQ: AAPL) iPad enough to block sales. (Reuters)

A bankruptcy judge says AMR’s (NYSE: AMR) American Air division may buy 32 Boeing (NYSE: BA) jets. (Reuters)

Philip Falcone rejects an SEC deal that would have banned him from the securities industry. (WSJ)

The Federal Reserve may plan to keep interest rates low into 2014. (WSJ)

The activity of German consumers picks up. (WSJ)

The head of AIG (NYSE: AIG) tells his board he would like to stay another year. (WSJ)

Eastman Kodak (NYSE: EK) names its general counsel as president. (WSJ)

Mercedes and BMW battle to see which will be the leader in U.S. luxury car sales this year. (WSJ)

Best Buy (NYSE: BBY) tells some customers it cannot fulfill back orders. (WSJ)

Online retailers do more to change their websites as e-commerce becomes more competitive. (WSJ)

Retailers sharply cut prices to clear inventory before the holiday weekend. (NYT)

The Italian Senate passes a new budget plan. (NYT)

Retail sales in the U.S. should rise 3.8% for the holidays as good weather helps keep shoppers in stores. (Bloomberg)

Douglas A. McIntyre

According to Gizmodo, Best Buy has reacted to the situation with the following statement,

“Due to overwhelming demand of hot product offerings on BestBuy.com during the November and December time period, we have encountered a situation that has affected redemption of some of our customers’ online orders. We are very sorry for the inconvenience this has caused and we have notified the affected customers.”

Best Buy has been one of the most poorly run large companies in America for a number of quarters. Wall St. was deeply disappointed recently when the retailer posted a 22% drop in earnings to $.42 for the quarter that ended on November 26. Best Buy said same-store sales in the next fiscal year will drop 3%.

Best Buy shares have fallen from a 52-week high of $36.33 to $22.99, near a 52-week low. Dunn has been at the retailer for 25 years, and has been CEO since 2009.

Dunn says he “loves” Best Buy. If so, he should do his investors and customers a favor and leave.

Douglas A. McIntyre