24/7 Wall St. » BUD

UBS Likes Global Beer and Liquor Companies

Lee Jackson — Thu, 02 May 2013 13:10:56 +0000

If there is one sector on Wall Street that seems to never go out of favor, its companies that make, sell and distribute liquor, beer and wine. For global companies involved in this industry, the United States is the number one country in the world for profits. Our love affair with alcohol, and our growing consumption as our population ages to the legal drinking limit, makes us the number one target for companies marketing alcoholic beverages.

In a recent survey of U.S. spirits wholesalers, analysts at UBS A.G. (NYSE: UBS) found out that the wholesalers are positive on the U.S. market and volume growth for their products, but not nearly as optimistic as the spirits companies themselves. Wholesalers may be slightly more cautious on the market outlook as (1) consumer confidence indicators have been very volatile, and (2) wholesalers’ confidence outlook may be more focused on volume than value growth, and volume growth has moderated due to higher industry focus on pricing.

Despite any increase in pricing moderating volume growth, U.S and international sales continue to be strong. Against a solid backdrop of growth, the team at UBS has a list of stocks to buy that just may add some sizzle to a portfolio.

Beam Inc. (NYSE: BEAM) reported earnings today, and the news was good. The bourbon maker beat earnings estimates by $0.10 per share and reaffirmed guidance for the rest of the year. The Thomson/First Call estimate for the stock is $64.

Anheuser-Busch InBev S.A./N.V. (NYSE: BUD) recently added Mexican brewer Grupo Modelo to its portfolio of products and has commenced a cash tender for the balance of the shares its does not already own. The consensus price target for the stock is $110. With shares at about $95, does this make Budweiser the King of Beers for analysts?

Constellation Brands Inc. (NYSE: STZ) produces and markets beverages around the world. The company recently announced a $1.55 billion dollar debt offering to help finance its purchase of Crown Imports, which will make it the sole importer of the popular Mexican beer Corona. The consensus price target for the stock is $54.

Brown-Forman Corp. (NYSE: BF-B) is another UBS stock to buy. The company provides wines, ready-to-drink products, vodka, whiskey, tequila, liqueur and other distilled spirits. The consensus for the stock is $74.

Diageo PLC (NYSE: DEO) has one of the largest portfolios of well-known spirit brands in the world. Its shares are trading near a 52-week high, and the company has posted solid earnings growth. The consensus estimate for the stock is $134.17.

Boston Beer Co. Inc. (NYSE: SAM) sells almost 50 different beers under the popular Sam Adams brand. The consensus price target for the stock is $138. This number is almost $30 below where the stock is currently trading.

Molson Coors Brewing Co. (NYSE: TAP) has been a prime benefactor in the growth of beer consumption in the past year. The consensus for the stock is $47.

Though consumers can be a fickle bunch and tastes often change on a whim, brand preference for the spirit companies is usually their biggest ally. While volumes on certain products rise and fall as demographics change, one thing is for sure. The worldwide market for alcoholic beverages is not going away anytime soon.

Filed under: Analyst Calls, Food, Retail Tagged: BEAM, BF-B, BUD, DEO, featured, SAM, STZ, TAP, UBS

24/7 Wall St. Closing Bell — Tuesday: Markets Mixed at Open, Closes Slightly Higher

Paul Ausick — Tue, 30 Apr 2013 20:06:01 +0000

U.S. equity markets opened mixed this morning as investors weighed conflicting data from the U.S., Europe, and Asia. In Europe, retail sales declined more than expected in Germany, Italy’s unemployment rate remained unchanged at 11.5%, and eurozone inflation moderated to 1.2%, below a forecast for inflation of 1.6%. In Asia, Japanese industrial production rose less than expected, retail unexpectedly fell, and unemployment came in below expectations. In the U.S., the S&P Case-Shiller housing price index rose more than expected (more coverage here), while the Chicago PMI came in well below expectations and chilled investors for a spell this morning (more coverage here). The latest U.S. consumer confidence index came in higher than expected, which put some heat back into the morning trading session (more coverage here).

The U.S. dollar index is trading down 0.47% today, now at 81.762. The GSCI commodity index is up 1.2% at 629.99. WTI crude oil closed down 1.1%, at $93.46 a barrel, down 3.9% for the month of April. Brent crude trades down 1.6% at $102.19 a barrel. Natural gas is down 0.4% today at about $4.15 per million BTUs. Gold settled up 0.3% today at $1,472.10 an ounce, but lost 7.8% for the month, the largest drop in 16 months.

The unofficial closing bells put the DJIA up more than 20 points to 14,839.18 (0.14%), the NASDAQ rose nearly 22 points (0.66%) to 3,328.79, and the S&P 500 rose 0.24% or nearly 4 points to 1,597.45.

There were a several analyst upgrades and downgrades today, including Pandora Media Inc. (NYSE: P) initiated as ‘sector perform’ at RBC Capital Markets; Buffalo Wild Wings Inc. (NASDAQ: BWLD) cut to ‘hold’ at KeyBanc; Best Buy Co. Inc. (NYSE: BBY) raised to ‘buy’ at Deutsche Bank (more coverage here); PulteGroup Inc. (NYSE: PHM) cut to ‘neutral’ at J.P. Morgan; and SINA Corp. (NASDAQ: SINA) raised to ‘buy’ at Jefferies.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading: Embraer SA (NYSE: ERJ) is up 6.7% at $34.94; Express Scripts Holding Co. (NASDAQ: ESRX) is up 1.6% at $59.38; General Growth Properties Inc. (NYSE: GGP) is up 2.2% at $22.50 after posting a new 52-week high of $22.80 earlier today; Herbalife Ltd. (NYSE: HLF) is up 2.7% at $39.78 (more coverage here); Hertz Global Holdings Inc. (NYSE: HTZ) is up 0.2% at $24.03 after posting a new 52-week high of $24.79 earlier today; Newmont Mining Corp. (NYSE: NEM) is down 5% at $32.27 after posting a new 52-week low of $31.33 earlier today; Riverbed Technology Inc. (NASDAQ: RVBD) is up fractionally at $14.86; 3D Systems Corp. (NYSE: DDD) is up 7.3% at $38.39; Aetna Inc. (NYSE: AET) is up 2.5% at $57.55 after posting a new 52-week high of $58.63 earlier today; Anheuser-Busch InBev SA (NYSE: BUD) is up 0.3% at $95.72; Avon Products Inc. (NYSE: AVP) is up 4.5% at $23.23 after posting a new 52-week high of $24.30 earlier today; BP plc (NYSE: BP) is up 2.3% at $43.61 (more coverage here); Harvest Natural Resources Inc. (NYSE: HNR) is down 5.5% at $3.25; Marathon Petroleum Corp. (NYSE: MPC) is down 4.9% at $78.39; Office Depot Inc. (NYSE: ODP) is up 4.9% at $3.88; United States Steel Corp. (NYSE: X) is up 0.3% at $17.59; and Valero Energy Corp. (NYSE: VLO) is down 2.5% at $40.17 (more coverage here).

Before markets open tomorrow morning we are scheduled to hear earnings reports from Affymetrix Inc. (NASDAQ: AFFX), Bankrate Inc. (NYSE: RATE), Leap Wireless International Inc. (NASDAQ: LEAP), Spectrum Brands Holdings Inc. (NYSE: SPB), Trulia Inc. (NASDAQ: TRLA), Vanguard Health Systems Inc. (NYSE: VHS), ADT Corp. (NYSE: ADT), Chesapeake Energy Corp. (NYSE: CHK), Comcast Corp. (NASDAQ: CMCSA), Humana Inc. (NYSE: HUM), James River Coal Co. (NASDAQ: JRCC), Mastercard Inc. (NYSE: MA), and Viacom Corp. (NASDAQ: VIAB).

Some standouts among heavily traded stocks today include:

Sirius XM Radio Inc. (NASDAQ: SIRI) is up 5.5% at $3.24 after posting a new 52-week high of $3.25 earlier today. The satellite radio company posted good numbers and made permanent the hire of interim CEO James Meyer.

Delcath Systems Inc. (NASDAQ: DCTH) is down 39.8% at $0.84. The pharmaceutical and medical device maker will have to repeat a clinical trial.

Pitney Bowes Inc. (NYSE: PBI) is down 16.6% at $13.52. The business equipment company had a 57% drop in profits and cut its dividend.

Stay tuned for Wednesday. The Federal Open Market Committee (FOMC) concludes a two-day meeting. We have also noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
8:15 a.m. – ADP employment report
8:58 a.m. – PMI manufacturing index
10:00 a.m. – ISM manufacturing index
10:00 a.m. – Construction spending
10:30 a.m. – EIA weekly petroleum status report
2:00 p.m. – FOMC meeting announcement

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: ADT, AET, AFFX, AVP, BBY, BP, BUD, BWLD, CHK, CMCSA, DCTH, DDD, ESRX, GGP, HLF, HNR, HTZ, HUM, JRCC, LEAP, MA, MPC, NEM, ODP, P, PBI, PHM, RATE, RVBD, SINA, SIRI, SPB, TRLA, VHS, VIA-B, VLO, X

24/7 Wall St. Closing Bell — Monday: Markets Open Higher, S&P Closes on New High

Paul Ausick — Mon, 29 Apr 2013 20:07:42 +0000

U.S. equity markets opened higher this morning after the U.S. Department of Commerce reported that personal income and spending both rose by 0.2%, which was slightly higher than expected for spending and slightly lower than expectations for income (more coverage here). We also noted the sharp drop in spending on energy and the impact that could have on oil and gasoline prices for the rest of this year (more coverage here). In Europe, new data was limited to Italian business confidence (down), Spanish retail sales (also down, but not as much as expected), and eurozone business and consumer survey (more coverage here). Italian government borrowing costs posted a two-year low (more coverage here). In Asia, both Japanese and Chinese markets were closed for a holiday. U.S. pending home sales rose in March, reversing a drop in February sales (more coverage here).

The U.S. dollar index is trading down 0.42% today, now at 82.159. The GSCI commodity index is down 0.5% at 622.29. WTI crude oil closed up 1.6%, at $94.50 a barrel. Brent crude trades up 0.5% at $103.72 a barrel. Natural gas is up 4% today at about $4.39 per million BTUs. Gold settled up 1% today at $1,467.40 an ounce.

The unofficial closing bells put the DJIA up more than 106 points to 14,818.83 (0.72%), the NASDAQ rose nearly 28 points (0.85%) to 3,307.02, and the S&P 500 rose 0.72% or more than 11 points to 1,593.59, a new high.

There were a several analyst upgrades and downgrades today, including Walt Disney Co. (NYSE: DIS) raised to ‘buy’ at UBS; Petroleo Brasileiro SA (NYSE: PBR), aka Petrobras, raised to ‘buy’ at BofA/Merrill Lynch; Union Pacific Co. (NYSE: UNP) cut to ‘hold’ at TD Securities; Gold Fields Inc. (NYSE: GFI) cut to ‘neutral’ at HSBC; and Abercrombie & Fitch Co. (NYSE: ANF) raised to ‘outperform’ at Macquarie.

Earnings reports since markets closed last Friday resulted in some price moves today, including these as of the last half hour of trading: Eaton Corp. (NYSE: ETN) is up 3.6% at $60.76; Loews Corp. (NYSE: L) is up 0.4% at $44.63 (more coverage here); Senior Housing Properties Trust (NYSE: SNH) is down 1.4% at $28.18; and Sohu.com Inc. (NASDAQ: SOHU) is down 0.2% at $50.66.

Before markets open tomorrow morning we are scheduled to hear earnings reports from Embraer SA (NYSE: ERJ), Express Scripts Holding Co. (NASDAQ: ESRX), General Growth Properties Inc. (NYSE: GGP), Herbalife Ltd. (NYSE: HLF), Hertz Global Holdings Inc. (NYSE: HTZ), Newmont Mining Corp. (NYSE: NEM), Riverbed Technology Inc. (NASDAQ: RVBD), 3D Systems Corp. (NYSE: DDD), Aetna Inc. (NYSE: AET), Anheuser-Busch InBev SA (NYSE: BUD), Avon Products Inc. (NYSE: AVP), BP plc (NYSE: BP), Harvest Natural Resources Inc. (NYSE: HNR), Marathon Petroleum Corp. (NYSE: MPC), Office Depot Inc. (NYSE: ODP), Sirius XM Radio Inc. (NASDAQ: SIRI), United States Steel Corp. (NYSE: X), and Valero Energy Corp. (NYSE: VLO).

Some standouts among heavily traded stocks today include:

Petroleo Brasileiro SA (NYSE: PBR) is up 6.6% at $19.23. Petrobras, as it’s known, reported lousy earnings, but it forecast growth going forward, added to a possible restart of drilling by Chevron Corp. (NYSE: CVX) in the Frade field following a year of inactivity due to a spill.

Conceptus Inc. (NASDAQ: CPTS) is up 19.5% at $30.95. The medical device maker is being acquired by Germany’s Bayer AG $1.1 billion.

Zynga Inc. (NASDAQ: ZNGA) is down 3.6% at $3.23. The social games maker had no news today, but is giving back some of Friday’s gains, which followed losses earlier last week on a weak earnings report.

Stay tuned for Tuesday. The Federal Open Market Committee (FOMC) begins a two-day meeting. We have also noted the following events on the schedule (all times Eastern):

8:30 a.m. – Employment cost index
9:00 a.m. – S&P Case-Shiller house price index
9:45 a.m. – Chicago purchasing manager’s index
10:00 a.m. – Conference Board consumer confidence index
11:30 a.m. – 4- and 52-week bill auctions
3:00 p.m. – Farm prices

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: AET, ANF, AVP, BP, BUD, CPTS, CVX, DDD, DIS, ERJ, ESRX, ETN, GFI, GGP, HLF, HNR, HTZ, L, MPC, NEM, ODP, PBR, RVBD, SIRI, SNH, SOHU, UNP, VLO, X, ZNGA

24/7 Wall St. Closing Bell — Friday: Markets Open Low, Close Mixed

Paul Ausick — Fri, 26 Apr 2013 20:06:13 +0000

U.S. equity markets opened lower this morning after hearing that U.S. GDP growth in the first quarter came in at 2.5%, well below the expected 3.1% (more coverage here). U.S. consumer sentiment also fell, but not by as much as expected (more coverage here). In Europe, French consumer confidence was unchanged and a few other data points came in pretty much as expected. In Asia, the Bank of Japan maintained both its interest rate and asset purchase program at previous levels and its core CPI fell 0.5%. Industrial production fell in Singapore by 4.1% following a 16.3% decline last month.

The U.S. dollar index is trading down 0.30% today, now at 82.492. The GSCI commodity index is up 1.7% at 625.15. WTI crude oil closed down 0.7%, at $93.00 a barrel, but closed the week up 5.4%. Brent crude trades down 0.5% at $102.88 a barrel. Natural gas is down 0.4% today at about $4.17 per million BTUs. Gold settled down 0.6% today at $1,453.60 an ounce, but held a gain of 4.2% for the week.

The unofficial closing bells put the DJIA up about 13 points to 14,713.85 (0.09%), the NASDAQ fell nearly 11 points (-0.33%) to 3,279.26, and the S&P 500 fell -0.18% or about 3 points to 1,582.25.

There were a several analyst upgrades and downgrades today, including Boeing Co. (NYSE: BA) raised to ‘buy’ at BB&T; SunPower Corp. (NASDAQ: SPWR) raised to ‘outperform’ at Baird (more coverage here); Anheuser-Busch InBev NV (NYSE: BUD) cut to ‘conviction sell’ at Goldman Sachs; Facebook Inc. (NASDAQ: FB) raised to ‘strong buy’ at Raymond James; and eBay Inc. (NASDAQ: EBAY) reiterated as ‘buy’ with a price target of $65 at Argus.

Earnings reports since markets closed last night resulted in some price moves today, including these as of the last half hour of trading: Amazon.com Inc. (NASDAQ: AMZN) is down 6.7% at $256.32 (more coverage here); Baidu Inc. (NASDAQ: BIDU) is down 7.8% at $85.12; Clearwire Corp. (NASDAQ: CLWR) is up 3.8% at $3.44; Coinstar Inc. (NASDAQ: CSTR) is down fractionally at $55.00; HealthSouth Corp. (NYSE: HLS) is up 2.2% at $27.13 after posting a new 52-week high of $27.99 earlier today; Olin Corp. (NYSE: OLN) is down 5.6% at $24.53; Range Resources Corp. (NYSE: RRC) is down 4.3% at $74.16; Starbucks Corp. (NASDAQ: SBUX) is down 0.8% at $60.03; Wynn Resorts, Ltd. (NASDAQ: WYNN) is up 0.8% at $136.02; Alcatel-Lucent (NYSE: ALU) is down 4.3% at $1.34; Burger King Worldwide Inc. (NYSE: BKW) is up 1.1% at $18.26; Chevron Corp. (NYSE: CVX) is up 1.5% at $120.23 (more coverage here); National Oilwell Varco Inc. (NYSE: NOV) is down 1.3% at $66.34 (more coverage here); and VF Corp. (NYSE: VFC) is down 2.2% at $174.83.

Before markets open Monday morning we are scheduled to hear earnings reports from Eaton Corp. (NYSE: ETN), Loews Corp. (NYSE: L), Senior Housing Properties Trust (NYSE: SNH), and Sohu.com Inc. (NASDAQ: SOHU).

Some standouts among heavily traded stocks today include:

J.C. Penney Co. Inc. (NYSE: JCP) is up 13.8% at $17.34. The retailing giant got a major investment yesterday from George Soros. More coverage here.

Zynga Inc. (NASDAQ: ZNGA) is up 7% at $3.35. The social games company is gaining back its loss following a poor earnings report on Wednesday night that weighed on the stock yesterday.

Barrick Gold Corp. (NYSE: ABX) is down 2.7% at $18.55. The gold miner is getting hit by today’s drop in gold prices.

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

8:30 a.m. – Personal income and outlays
10:00 a.m. – Pending home sales index
10:30 a.m. – Dallas Fed manufacturing survey
11:30 a.m. – 3- and 6-month bill auctions

Have a great weekend!

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: ABX, ALU, AMZN, BA, BIDU, BKW, BUD, CLWR, CSTR, CVX, EBAY, ETN, FB, JCP, L, NOV, OLN, RRC, SBUX, SNH, SOHU, SPWR, VFC, WYNN, ZNGA

Top Analyst Upgrades and Downgrades: Amazon, Boeing, eBay, SunPower and More

Jon C. Ogg — Fri, 26 Apr 2013 12:35:08 +0000

Investors and traders are usually on the lookout for new research ideas that will generate higher income or more profits. 24/7 Wall St. reviews many analyst research calls from Wall St. and from boutique firms to find great ideas in value stocks, growth stocks and dividend stocks. Some are stocks to buy, while some ideas are even stocks to sell.

These are the top analyst upgrades, downgrades and initiations we have seen from select Wall St. research calls this Friday.

Aflac Inc. (NYSE: AFL) raised to Buy from Neutral at Stern Agee.

Amazon.com Inc. (NASDAQ: AMZN) was maintained as Outperform but its target cut to $320 from $334 at Credit Suisse.

Anheuser-Busch InBev N.V. (NYSE: BUD) was cut to a Conviction Sell from a normal Sell rating at Goldman Sachs.

Boeing Co. (NYSE: BA) was raised to Buy from Hold at BB&T.

Boston Scientific Corp. (NYSE: BSX) raised to Outperform from Neutral and target price raised to $8.75 from $8.50 at Credit Suisse.

Corning Inc. (NYSE: GLW) reiterated Buy with $20 price target at Argus.

eBay Inc. (NASDAQ: EBAY) reiterated Buy with $65 target as pullback brings favorable entry point according to Argus.

Facebook Inc. (NASDAQ: FB) was raised to Strong Buy from Outperform at Raymond James.

National Instruments Corp. (NASDAQ: NATI) was downgraded to Neutral from Overweight at J.P. Morgan.

PennyMac Mortgage Investment Trust (NYSE: PMT) was raised to Outperform at KBW.

Qualcomm Inc. (NASDAQ: QCOM) reiterated Buy with $80 target, and the sell-off viewed as an opportunity to initiate or add to positions according to Argus.

Raymond James Financial Inc. (NYSE: RJF) was downgraded to Neutral from Buy at Citigroup.

Regions Financial Corp. (NYSE: RF) was raised to Buy from Hold at Jefferies.

SunPower Corp. (NASDAQ: SPWR) was raised to Outperform from Neutral at Baird.

Unisys Corp. (NYSE: UIS) raised to Positive from Neutral at Susquehanna.

USG Corp. (NYSE: USG) was removed from the Top Pick List at RBC Capital Markets and was given a new Outperform rating.

Windstream Corp. (NASDAQ: WIN) was downgraded to Neutral from Buy at Bank of America/Merrill Lynch.

Credit Suisse on MLPs: DCP Midstream Partners L.P. (NYSE: DPM) and Exterran Partners L.P. (NASDAQ: EXLP) were both downgraded to Neutral from Outperform as growth is priced in. EQT Midstream Partners L.P. (NYSE: EQM) was raised to Outperform from Neutral and target raised to $47 from $41 after strong results.

Filed under: Active Trader, Analyst Calls, Value Investing Tagged: AFL, AMZN, BA, BSX, BUD, DPM, EBAY, EQM, EXLP, FB, GLW, NATI, PMT, QCOM, RF, RJF, SPWR, UIS, USG, WIN

The 10 States Making the Most on Beer

Douglas A. McIntyre and Samuel Weigley — Mon, 01 Apr 2013 08:37:05 +0000

Most states rely on a relatively small number of industries for much their employment and economic activity. The industries that come to mind are auto manufacturing, defense, government, financial services and agriculture.

As it turns out, the brewing and wholesaling of beer can be added to the list for several states, including Colorado and Missouri. This beer economy can thrive in the United States because there are so many beer drinkers — 6.38 billion gallons of beer were consumed in America in 2011, which is roughly equivalent to the amount of milk consumed that year.

Click here to see the states making the most on beer

In addition to the industry itself, sectors that claim to have large GDP footprints also use numbers from other parts of the economy stimulated by its economic activity. The auto industry regularly has said its manufacturing and sales revenue ripple out to car dealers, parts makers and the railroads and trucks that carry cars from factories to showrooms. At the start of the recession, the governor of Michigan claimed that, nationwide, this included one in every 10 jobs.

Researchers who track the beer industry, led by the association of the industry’s brewers, the Beer Institute, recently reported results of a national study. They found that the manufacturing, retail and distribution sectors of American industry get an extraordinary boost from beer production. Among the 50 states, according to the report, Colorado and Missouri rely on beer for more than 6% of their gross domestic products (GDPs). The entire manufacturing industry is responsible for only 10% of the national GDP.

The top three states, as measured by the beer industry’s economic effect on GDP, are Colorado, Missouri and Wisconsin. It probably is no accident that the country’s three largest brewers were founded in those states — Anheuser-Busch InBev S.A./N.V. (NYSE: BUD) in St. Louis, SABMiller in Milwaukee and Molson Coors Brewing Co. (NYSE: TAP) in Golden, Colo. Each state still has a large number of brewery locations compared to other states, and the same is true for the employee count of brewers and related industries.

While much of the beer produced in these states is shipped around the country, states with larger brewing industries also tend to be associated with more beer consumption. Of the 10 states where beer production represents the highest proportion of GDP, seven consume more beer per capita than the U.S. average. In 2011, Americans consumed about 28.3 gallons per person. This includes New Hampshire, which drinks more beer than any other state in the country — 43 gallons per capita.

The 10 making the most from beer also appear to be much more open to drinking as well. While many states have so-called blue laws, which restrict the purchase of alcohol and tobacco at certain times, on certain days or in certain stores, the states with the highest beer production generally lack such laws. Of the 10 states, only one — Georgia — prohibits Sunday sales of beer. All 10 of the states allow beer to be sold in gas stations or convenience stores, while eight other states around the nation prohibit it.

Based on total economic impact by state provided by the Beer Institute and GDP by state from the Bureau of Economic Analysis, 24/7 Wall St. calculated the 10 states where the beer industry accounted for the largest portion of the state economy. Among the data we included were the number of brewers and beer wholesalers in each state, as well as the jobs created by each industry and total tax contribution by the industry, all from the Beer Institute for 2012. Based on data published last year, the Beer Institute calculated the total amount of beer sold in the state each year, and, dividing it by the total population over the age of 21, estimated the average consumption per person.

These are the 10 states making the most from beer.

Filed under: Research, Special Report Tagged: BUD, featured, TAP

Top Key Call Stocks from UBS Global Ideas of the Week (LOW, TWX, BUD, APC, KEY, AZN, RIO, UBS)

Lee Jackson — Thu, 28 Mar 2013 13:45:19 +0000

When the holidays wound down and we started off 2013, all the Wall St. firms started to put out their top stock picks for the year. We covered those various lists so our readers could get an idea which way research analysts were leaning. One such list we covered was the UBS A.G. (NYSE: UBS) “Key Call” list of stocks to buy. Those stocks represented the high conviction names at the Swiss bank. In a fresh research report, we found a group of Key Call stocks that are featured in the UBS Global Ideas of the Week list.

Being a Key Call name and on the Global Ideas list is a good way for an investor to judge how strongly the analysts and equity strategists at UBS feel about any given stock. This double stamp of approval is rare at many Wall St. firms and should give everyone from portfolio managers to the retail investor confidence in the stocks to buy.

The Key Call names on the UBS Global Ideas of the Week list are:

Home improvement retailer Lowe’s Companies Inc. (NYSE: LOW) tops the UBS list. Benefiting from the huge increase in domestic construction and home building, the company has seen revenues jump dramatically this year. The UBS price target for Lowe’s is $42. The Thomson/First Call consensus price target is $41.

Broadcasting and entertainment giant Time Warner Inc. (NYSE: TWX) makes the cut. With networks, film and TV entertainment, and publishing all driving revenues, this one is a solid core holding. The UBS target price for the stock is $60. That is also the Wall St. consensus target.

Anheuser-Busch InBev S.A./N.V. (NYSE: BUD), maker of the famous Budweiser brand of beer, is a top idea. The iconic St. Louis brewer was acquired by Europe’s InBev in 2008. The combined company offers almost 200 different brands of beer. Now that is diversity. The UBS price target for the stock is $110. The consensus target is in line at $110.

Based in the Houston suburb of The Woodlands, independent exploration and production leader Anadarko Petroleum (NYSE: APC) is a top stock to buy. With three strong segments providing revenue growth, Anadarko is a top pick at many Wall St. firms. The UBS price target is $105. Thec onsensus price target is slightly lower at $101.

Regional U.S. bank KeyCorp (NYSE: KEY) may be the best value play on the UBS list. Based in Cleveland and with almost 1100 branches spread through Ohio and the surrounding states, this regional money center bank has solid growth prospects. The UBS price target for the stock is $11. The consensus price target is $10.

UK-based drug giant AstraZeneca PLC (NYSE: AZN) may offer investors the best total return. With its solid pharmaceutical and over-the-counter product line, investors also receive a solid 5.68% dividend. The UBS price target is $51, and the consensus estimate is in line at $51.50.

The last Key Call name on the Global Weekly list is London-based mining giant Rio Tinto PLC (NYSE: RIO). Mining everything from gold and silver to aluminum, Rio Tinto has a truly worldwide presence. The UBS target for the stock is $72. The consensus price target is $73.60. The mining names are extremely out of favor on Wall St. Any pick up in global and domestic growth could be a huge tailwind for this diversified name.

Investors looking for solid stocks to add to their portfolio need to consider not only U.S. names, but other large cap companies from around the world with diversified business models. Even though growth in Europe and other parts of the globe may be lagging our own, the U.S. economy is the tail that wags the dog. Once solid growth is established here, it should translate to growth around the world.

Filed under: Active Trader, Analyst Calls Tagged: APC, AZN, BUD, featured, KEY, LOW, RIO, TWX, UBS

Pricing/Demand Trends Get Favorable For Beer, Wine and Spirits Makers

Jon C. Ogg — Mon, 11 Mar 2013 17:04:28 +0000

Good news is headed the way of beer, wine, and spirits makers. Those past cost pressures are abating and trends are starting to look up as a report from Moody’s Investors Service on Monday is signaling good news for the growth of the sector. Moody’s even went as far as to raise its outlook for the global beverage industry to “Positive” from its prior “Stable” outlook. Before you get too excited about winners, keep in mind that much of this is due to emerging market growth as well as “easing of commodity pressures” which are expected to be seen over the next 12 to 18 months.

Among the winning beer makers are Anheuser-Busch InBev (NYSE: BUD), Molson Coors (NYSE: TAP), SABMiller, Heineken and Foster’s Group. Wine and spirits makers like Diageo PLC (NYSE: DEO), Beam Inc. (NYSE: BEAM), Brown-Forman (NYSE: BF-B), Pernod Ricard, and Bacardi are expected to benefit as well.

Moody’s went on to say that A more benign commodity environment will help offset headwinds facing the industry. Those cost pressures have been very costly for producers, no pun intended. The headwinds include the following:

slow growth or declining consumption of mainstream beers in developed markets,
declining consumption of carbonated soft drinks,
new excise taxes or consumption and advertising restrictions in some markets,
and continuing economic challenges in Europe.

Global beer consumption is still growing at the same time that demand for wine and spirits is expected to remain strong. This is in the face of declines in beer sales in the UK and in the face of recent declining trends in the United States. An expanding middle class is expected to boost demand for premium beers, high-end wine and spirits in countries like China and also in parts of Latin America.

Another commodity price abatement will come from all of the hedges rolling off that were put in place when prices were high. The price hikes put in place will also lead to higher profits now that commodity prices are abating.

If you have been a reader of 24/7 Wall St. for long, you know we have tracked these issues in depth. These may be consumer products, but as “favorites” they also end up impacting society’s personal finances. All you have to do is look at the implications of our own piece called “9 Beers Americans No Longer Drink” and you can see how important these issues are. Also, here are the states where people drink the most beers.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Commodities, Commodities & Metals, Compensation, Consumer Goods, Consumer Product, Economy, Editor's Picks, Food, International Markets, Personal Finance, Retail Tagged: BEAM, BF-B, BUD, DEO, featured, TAP

24/7 Wall St. Closing Bell — March 1, 2013: Markets Struggle to Small Gains (DB, V, DRI, BUD, ADSK, BODY, CTIC, CLNE, DECK, GPS, MCP, PANW, SD, BBY, ARNA, BYD, SSYS, RIG, GRPN, MTG, IEP)

Paul Ausick — Fri, 01 Mar 2013 21:03:42 +0000

U.S. equity markets opened lower this morning following a number of disappointing data releases in Europe and Asia. Eurozone PMI remains on the pessimistic side, with a reading of 47.9, and the unemployment rate ticked higher to 11.9% (more coverage here). Italy’s debt-to-GDP ratio is at its highest level in 20 years, and U.K. PMI came in well below expectations. In Asia, China’s PMI came in just into the optimism zone with a reading of 50.1, down from a previous reading of 50.4. In the U.S. the report on personal income and savings disappointed investors (more coverage here), while both the ISM manufacturing index and consumer sentiment index posted solid gains (more coverage here). But stocks could do little more than remain in positive territory on the day when a mandatory cut of $85 billion in the federal budget went into effect.

The U.S. dollar index rose 0.44% today, now at 82.294. The GSCI commodity index is down 0.3% at 648.21, with commodities prices mixed today. WTI crude oil closed down 1.5% today, at $90.68 a barrel, down 2.6% for the week and the lowest closing price since December 24th. Brent crude trades down 0.9% at $110.36 a barrel. Natural gas is down 0.8% today at about $3.46 per million BTUs. Gold settled down 0.4% today at $1,572.30 an ounce, the lowest close since last July, but only fractionally below last week’s close.

The unofficial closing bells put the DJIA up more than 35 points to 14,090.04 (0.25%), the NASDAQ rose nearly 10 points (0.30%) to 3,169.74, and the S&P 500 rose 0.24% or nearly 4 points to 1,518.24.

There were a several analyst upgrades and downgrades today, including Deutsche Bank AG (NYSE: DB) cut to ‘sell’ at Goldman Sachs; Visa Inc. (NYSE: V) cut to ‘hold’ at Argus; Darden Restaurants Inc. (NYSE: DRI) cut to ‘neutral’ at UBS; Anheuser-Busch InBev SA (NYSE: BUD) raised to ‘outperform’ at Credit Suisse; and Autodesk Inc. (NASDAQ: ADSK) raised to ‘buy’ with a price target of $45 at Jefferies.

Earnings reports since markets closed last night resulted in several price moves today, including these: Body Central Corp. (NASDAQ: BODY) is up 1.6% at $7.83; Cell Therapeutics Inc. (NASDAQ: CTIC) is down 10.6% at $1.20; Clean Energy Fuels Corp. (NASDAQ: CLNE) is up 2.4% at $12.88; Deckers Outdoor Corp. (NASDAQ: DECK) is up 15.6% at $46.72; Gap Inc. (NYSE: GPS) is up 2.6% at $33.78; Molycorp Inc. (NYSE: MCP) is down 5.4% at $5.81; Palo Alto Networks Inc. (NYSE: PANW) is down 3.9% at $58.73; SandRidge Energy Co. (NYSE: SD) is down 4.4% at $5.45; and Best Buy Co. Inc. (NYSE: BBY) is up 3.4% at $16.96 (more coverage here).

Before markets open Monday morning we are scheduled to hear from Arena Pharmaceuticals Inc. (NASDAQ: ARNA), Boyd Gaming Corp. (NYSE: BYD), Stratasys Ltd. (NASDAQ: SSYS), and Transocean Ltd. (NYSE: RIG).

Some standouts from today include the following stocks:

Groupon Inc. (NASDAQ: GRPN) is up 14.8% at $5.20. The daily deals website fired its CEO last night. More coverage here.

MGIC Investment Corp. (NYSE: MTG) is up 27.5% at $3.80. The mortgage insurer posted another loss yesterday, but investors appear to think that the insurers will get well when Uncle Sam plays a smaller role in the housing market. More coverage on today’s spiky stocks here.

Icahn Enterprises LP (NASDAQ: IEP) is down 15.3% at $60.57. The Carl Icahn-controlled MLP issued more shares (actually, common interests) at a 13% discount this morning. Like MTG, another of today’s spiky stocks.

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

11:30 a.m. – 3- and 6-month bill auctions

Have a great weekend!

Filed under: 24/7 Wall St. Wire, HI/LOW, Market Close Tagged: ADSK, ARNA, BBY, BODY, BUD, BYD, CLNE, CTIC, DB, DECK, DRI, GPS, GRPN, IEP, MCP, MTG, PANW, RIG, SD, SSYS, V

Top Analyst Upgrades and Downgrades (AL, ALU, AIG, AFL, BUD, ADSK, DRI, DB, DUK, HA, ILMN, IP, ISRG, NWL, NCLH, CRM, SQNM, TEF, V)

Jon C. Ogg — Fri, 01 Mar 2013 13:20:45 +0000

These are some of this Friday’s top analyst upgrades, downgrades and initiations seen from Wall St. research calls.

Air Lease Corp. (NYSE: AL) named Bull of the Day as “earnings takeoff” at Zacks.

Alcatel-Lucent S.A. (NYSE: ALU) raised to Market Perform at Bernstein.

American international Group Inc. (NYSE: AIG) cut to Equal Weight and AFLAC Inc. (NYSE: AFL) raised to Outperform at Evercore.

Anheuser-Busch InBev S.A./N.V.(NYSE: BUD) raised to Outperform at Credit Suisse.

Autodesk Inc. (NASDAQ: ADSK) raised to Buy with $45 target at Jefferies.

Darden Restaurants Inc. (NYSE: DRI) cut to Neutral at UBS.

Deutsche Bank A.G. (NYSE: DB) cut to Sell at Goldman Sachs.

Duke Energy Corp. (NYSE: DUK) cut to Hold at Deutsche Bank.

Hawaiian Holdings Inc. (NASDAQ: HA) named Bear of the Day as “the turbulence is no joke” by Zacks.

Illumina Inc. (NASDAQ: ILMN) raised to Buy at UBS.

International Paper Co. (NYSE: IP) raised to Outperform at RBC, and BofA/Merrill Lynch reiterated Buy and raised target to $50 from $47.

Intuitive Surgical Inc. (NASDAQ: ISRG) raised to Buy at Cantor Fitzgerald and reiterated Buy with $620 price target at BofA/Merrill Lynch.

Newell Rubbermaid Inc. (NYSE: NWL) reiterated Buy and raised price target to $28 from $27 at BofA/Merrill Lynch.

Norwegian Cruise Line (NASDAQ: NCLH) started as Hold at Deutsche Bank.

Salesforce.com Inc. (NYSE: CRM) reiterated Buy and raised price target to $228 from $200 at BofA/Merrill Lynch.

Sequenom Inc. (NASDAQ: SQNM) raised to Overweight at Piper Jaffray.

Telefonica S.A. (NYSE: TEF) raised to Neutral at Goldman Sachs.

Visa Inc. (NYSE: V) cut to Hold at Argus.

Biotech investors often have one hell of a time picking biotech stocks due to single-company risks that are far greater than in other sectors. Most would just turn to ETFs, but there is a problem with the four top biotech ETFs. The composition of these are all very different and virtually none of them are really what an investor might expect from true sector diversification.

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: ADSK, AFL, AIG, AL, ALU, BUD, CRM, DB, DRI, DUK, HA, ILMN, IP, ISRG, NCLH, NWL, SQNM, TEF, V