Annaly Capital Management, Inc. (NYSE: NLY) Raised to Outperform at Wells Fargo.
Boston Scientific Corp. (NYSE: BSX) Started as Outperform at Credit Suisse.
Career Education Corp. (NASDAQ: CECO) Cut to Underperform at BofA/ML.
Clorox Corp. (NYSE: CLX) Cut to Underperform at BofA/ML.
CNH Global N.V. (NYSE: CNH) named as Value stock of the day at Zacks.
Dendreon Corporation (NASDAQ: DNDN) Cut to Neutral at Goldman Sachs.
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) Started as Overweight at Barclays.
Hexcel Corporation (NYSE: HXL) Cut to Neutral at BofA/ML.
Hospira Inc. (NYSE: HSP) cut to Underperform ar Bear of the Day at Zacks.
Medtronic Inc. (NYSE: MDT) Started as Outperform at Credit Suisse.
Rockwell Collins Inc. (NYSE: COL) Cut to Underperform at BofA/ML.
Sierra Wireless Inc. (NASDAQ: SWIR) downgraded at Raymond James and Morgan Keegan.
St. Jude Medical (NYSE: STJ) Started as Neutral at Credit Suisse.
Sun Life Financial Inc. (NYSE: SLF) Cut to Underperform at Credit Suisse.
Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) Raised to Overweight at Morgan Stanley.
Tidewater Inc. (NYSE: TDW) Cut to Hold at Argus.
Wyndam Worldwide (NYSE: WYN) named Bull of the Day at Zacks.

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Looking ahead, Caterpillar raised its revenue guidance from $56-$58 billion to $58 billion, including about $2 billion from Bucyrus. EPS guidance was changed from $6.25-$6.75 to $6.75, including a negative impact of about $0.50 from the Bucyrus deal. The company hailed the recent passage of three free-trade agreements and “the growing understanding that we need to do something positive about infrastructure in the United States.” Needless to say, Caterpillar hopes to profit from both.

For 2012, Caterpillar continues to be optimistic. The company expects sales and revenues to increase by 10%-20%, much of which will come from Bucyrus. Caterpillar expects Bucyrus to boost total sales by about $5 billion next year. The company did not provide EPS guidance for 2012.

Of the company’s $1.14 billion in profit, more than 30% was attributed to a favorable exchange rate. The weaker US dollar clearly helped the company in the third quarter, but as the dollar gains strength profits could slow down. The company also reported weaker sales in China, and noted that sales rose in developed countries although total sales of new machines in developed countries “remain significantly below previous peak levels.”

Order backlog has climbed to an all-time high, and the company expects commodity prices to remain high enough to maintain current investment levels from Caterpillar’s customers. In developed countries, Caterpillar believes that deferred replacement of equipment will pick up modestly, while in developing countries the company expects more construction activity to drive additional sales. If sales in China continue to weaken, that may be a tough goal to reach.

Shares of Caterpillar are up about 5% a half hour before the market opens this morning, at $91.65 in a 52-week range of $67.54-$116.55. Deere is up more than 2.5%, at $74.10 in a 52-week range of $59.92-$99.80. Joy Global is up about 2.8%, at $84.10, in a 52-week range of $57.48-$103.44. The Market Vectors Agribusiness ETF (AMEX: MOO) is up about 1.5%, at $49.37, in a 52-week range of $39.86-$57.93.

Paul Ausick

In a ratings action on sovereign debt, Standard & Poor’s lowered its long-term counterparty credit rating on seven Italian banks from ‘A+’ to ‘A’ and affirmed the agency’s ratings on short-term debt at ‘A-1′. The seven banks are Mediobanca SpA, Findomestic Banca SpA, and Intesa Sanpaolo SpA and its core subsidiaries Banca IMI SpA, and Banca Infrastrutture Innovazione e Sviluppo SpA (BIIS) (BIIS), and Cassa di Risparmio in Bologna SpA. Outlooks on all seven banks is negative. S&P also lowered Banca Nazionale del Lavoro SpA (BNL) from ‘AA-/A-1+’ to ‘A+/A-1′ with a negative outlook.

Other companies getting a nod today include CNH Global NV (NYSE: CNH), Ralcorp Holdings Inc. (NYSE: RAH), Stillwater Mining Corp. (NYSE: SWC), and Fiat SpA (OTC: FIATY), owners of US automaker Chrysler.

CNH Global NV (NYSE: CNH) received ratings today from both S&P and Moody’s on the issuance of $859 million in asset-backed securities collateralized by equipment retail installment sales. CNH is a maker of tractors and other farming and construction equipment. The securities are being issued in a series of five notes, of which three senior notes received ‘AAA’ ratings from both agencies. The other senior note received an ‘A-1+’ rating from S&P and an ‘A’ rating from Fitch Ratings. The $26 million offering of Class B subordinated notes received a rating of ‘A+’ from S&P and ‘A’ from Fitch.

Ralcorp Holdings Inc. (NYSE: RAH) remained on CreditWatch with negative implications at S&P following the company’s rejection of the latest merger offer from ConAgra Foods, Inc. (NYSE: CAG). The agency remains “uncertain” concerning Ralcorp’s plan to spin-off its Post Foods group in a tax-free transaction to the company’s shareholders. S&P is dubious about Ralcorp’s ability to maintain cash flow and about Ralcorp’s plans for using the estimated $1 billion in net cash that it will receive from the spin-off.

Stillwater Mining Corp. (NYSE: SWC) received a ‘B2′ rating from Moody’s on a proposed $300 million in senior unsecured notes due 2016. The company’s outlook is rated stable. In a related action, the agency upgraded $30 million in unsecured Montana Board of Investments revenue bonds from ‘Caa1′ to ‘B2′. Stillwater plans to use some of the proceeds from the $300 million issuance to pay part of the cash portion of its $487 million acquisition of Peregrine Metals announced in July.

Fiat SpA (OTC: FIATY) received a downgrade to its corporate family rating and its probability of default rating from Moody’s. Both ratings went down one notch, from ‘Ba2′ to ‘Ba1′. At the same time the agency lowered debt ratings with a negative outlook on three of Fiat’s finance subsidiaries in North America. Moody’s noted that this is the final change related to Fiat’s increase in its stake of Chrysler. Interestingly, what many analysts have seen as a plus in Fiat’s acquisition of Chrysler is the promise of using common technology and parts in all the combined companies’ cars. Moody’s views that as a negative, stating that it “could result in the two companies having to support each other in the event of financial difficulty,” even though Fiat does not guarantee Chrysler’s debt.

Paul Ausick

CNH Global N.V. (NYSE: CNH) reported quarterly earnings a couple of weeks ago and easily topped expectations. AGCO Corp. (NYSE: AGCO) also posted sterling results for its second quarter. Caterpillar Corp. (NYSE: CAT) reported very solid numbers in July — and the stock fell. That’s happening to Deere today as well. All four are down year-to-date.

Because earnings and revenues have been robust on the strength of demand for agricultural and other heavy equipment, it could be that investors have set expectations too high. Nothing less than spectacular will do.

Or it could be that the stocks are fairly valued now and were overbought before. Caterpillar’s forward multiple is 9.63, CNH’s is 8.11, AGCO’s is 8.66, and, based on today’s earnings report, Deere’s is slightly more than 11. Those numbers seem a little low.

What could be going on is that despite the these companies’ own forecasts for continue sales and profits, investors are more concerned with the cost side of things. Deere’s operating margin in its agricultural machinery division fell from nearly 39% in the same period last year to 33% this quarter. Rising raw materials costs are a legitimate concern, especially if other factors could begin to influence sales.

For example, Deere has projected lower sales in South America this year, an area where the company has been very strong. The company forecasts North American sales up 5%-10% on the year, but a report from an agricultural trade group notes that sales of tractors in the US are down slightly year-to-date, and were down -7.4% in the month of July.

Predictions for lower corn yields and a lower-than-expected harvest could also be adding pressure to farm equipment purchases. Even the increased availability of wheat on international markets due to Russia’s decision to resume exports could be stifling sales somewhat.

Fertilizer stocks are performing somewhat better overall due primarily to the fact that adding more fertilizer to increase yields is cheaper and more effective than buying new equipment. Shares of CF Industries Holdings Inc. (NYSE: CF) have gained about 25% year-to-date, and shares in Potash Corp. of Saskatchewan are up about 8% in the same period.

Deere’s shares are down about -1% just after noon today, at $74.44, in a 52-week range of $60.45-$99.80. Volume has already surpassed the daily average. Caterpillar stock is down about -1.35%, at $88.14, in a 52-week range of $63.34-$116.55. Shares of CNH are down more than -2%, at $30.58, in a 52-week range of $27.01-$54.45, and AGCO shares are down more than -3%, at $39.23, in a 52-week range of $32.36-$59.81.

Shares of PowerShares Agriculture Fund are up about 0.7%, at $33.09, in a 52-week range of $25.63-$35.58. The Market Vectors Agribusiness ETF (NYSE: MOO) is up about 0.25%, at $50.15, in a 52-week range of $42.35-$57.93.

Paul Ausick

Rising corn prices, now above $7.66/bushel, is almost certain to drive cattle prices higher because ranchers are not increasing their herd sizes as they normally would with rising cattle prices because corn prices are rising faster. The PowerShares DB Agriculture ETF (NYSE: DBA) and the Market Vectors Agribusiness ETF (NYSE: MOO) are both trading essentially flat so far today.

Other ag-related stocks are also showing little movement today. Tyson Foods Inc. (NYSE: TSN), Smithfield Foods Inc. (NYSE: SFD), and Hormel Foods Corp. (NYSE: HRL) are trading essentially flat. Farm equipment makers Deere & Co. (NYSE: DE), CNH Global N.V. (NYSE: CNH), and AGCO Corp. (NYSE: AGCO) are all trading down about -1%. Fertilizer maker Mosaic Co. (NYSE: MOS) reported earnings today, and missed revenue expectations. However, the company sold 2.4 million tons of its phosphate fertilizers at $543/ton, way above last year’s sales price of $336/ton. The company also guided phosphate sales between 2.5 and 2.9 million tons for its fourth fiscal quarter ending in May.

Cocoa prices continue their slide as United Nations and French troops supporting the elected president of Ivory Coast, Alassane Ouattara, are negotiating with forces of the outgoing president, Laurent Gbagbo, who refused to relinquish power. Cocoa futures have fallen from a high of $3,775/ton early this month to $2,982, and the drop is expected to continue as hundreds of thousands of tons of cocoa in Ivory Cost warehouses are released into the market.

Chocolate makers Hershey Co. (NYSE: HSY) shares are up more than 1% today. The world’s largest maker of bulk chocolate, Swiss-based Barry Callebaut AG, said earlier that it would be able to meet its contractual obligations to Hershey, Nestle SA, and Kraft Foods Inc. (NYSE: KFT) without relying on Ivory Coast supplies.

Gold and silver are also continuing to set record highs. Gold is trading above $1,450/ounce, and silver has risen to more than $39/ounce. The SPDR Gold Shares ETF (NYSE: GLD) is up more than 1% today, and the iShares Silver Trust (NYSE: SLV) is up more than 1.5%. Gold miners are faring better, with the Market Vectors Gold Miners ETF (NYSE: GDX) up about 3.5% and the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) up about 3.75%. The Global X Silver Miners ETF (NYSE: SIL) is up about 3% as well.

West Texas Intermediate crude is off slightly, to below $108/barrel, while Brent crude is up to more than $122/barrel. The WTI price could fall further as the United States Oil ETF (NYSE: USO) begins to rollover its contracts tomorrow. WTI is priced at delivery at the storage facility in Cushing, Oklahoma, which is absolutely full to the top. Because the USO rolls its contracts forward every month, more oil that could presumably flow into the tanks at Cushing have to go somewhere else. Either refiners have to take the barrels or the barrels have to be exported. In either event, WTI prices are almost certain to fall. The question, of course, is by how much.

Paul Ausick

But the difference is outlook. Where CNH and AGCO saw the glass as half-empty, Deere sees a glass that is half-full. AGCO, in particular, was cautious about sales in Brazil, and came in with a full-year EPS estimate of $2.50-$2.75, where analysts had been predicting EPS of $2.94.

Deere, however, raised its profit forecast to $2.5 billion, up from its previous forecast of $2.1 billion. The company also expects sales growth of 18%-20%, up from a previous forecast of up 10%-12%. The expected profit calculates out to EPS of about $5.90, nicely higher than analysts’ estimates of $5.49.

Both AGCO and Deere expect sales of its farm machinery to remain strong in North America, but growth is unlikely to be as high as in either Europe or South America. Deere also expects sales in its construction and forestry equipment division to grow by 35% in 2011, primarily on sales to equipment rental firms and an improvement in forestry markets where wood and pulp prices are currently high and expected to stay that way.

Deere & Co. shares set a new 52-week high this morning of $97.36, putting its 52-week range at $52.73-$97.36.

Paul Ausick

Potash Corp. reported fourth-quarter EPS of $1.61, including a charge of $0.16/share that the company spent to fend off a $38.6 billion takeover by BHP Billiton Ltd. (NYSE: BHP). The company posted revenue of $1.81 billion. Analysts were expecting EPS of $1.65 on revenue of $1.63 billion. In the same period a year ago, Potash Corp. posted EPS of $0.79 on revenue of $1.1 billion.

Caterpillar might be thought of as more of a mining play than just agriculture, but history has shown that the two are often intermingled.  The equipment giant reported EPS for its fourth-quarter of $1.47 on sales of $12.8 billion. Analysts were expecting EPS of $1.27 on sales of $11.63 billion. CNH also reported earnings this morning. In the fourth quarter, the company posted EPS of $0.90, excluding restructuring and one-time charges, on sales of $3.76 billion. Analysts were expecting EPS of $0.45 on sales of $3.7 billion.

Both the fertilizer-maker and the two equipment makers benefited from rising food and commodity prices. And all three of the companies expect to increase their profitable ways in 2011.

Potash Corp. announced a three-for-one stock split yesterday and also raised its quarterly per share cash dividend from $0.10 to $0.21, on a split-adjusted basis. In the announcement, the company’s CEO noted that doubling the company’s dividend “reflects the confidence we have in the long-term drivers of our business.”

For 2011, Potash Corp. guided first-quarter EPS to $2.10-$2.70 and full-year EPS to $8.40-$9.60 on a pre-split basis. Analysts were expecting first-quarter EPS of $2.24 and full-year EPS of $8.89, pre-split.

Caterpillar expects 2011 sales to top $50 billion and EPS to be around $6.00. For 2010 the company had sales of $42.6 billion and EPS of $4.15. CNH expects 2011 revenue to rise by up to 10% and operating margins to be in the range of 7.1%-7.9%. In 2010, CNH posted total sales of $14.5 billion. For 2010, ag equipment operating margins were 7.1%, while construction equipment operating margins were -4.5%. CNH’s sales of ag equipment is roughly four times sales in construction equipment.

The continued growth in fertilizer and equipment sales stems from strong demand for potash fertilizer and strong demand for mining equipment. Caterpillar’s outlook is particularly strong because the company does not include sales from Caterpillar’s acquisition of Bucyrus International Inc. (NASDAQ: BUCY), which has not closed yet.

What about Mosaic Co. (NYSE: MOS)?  It blew out earnings earlier in January, and now the Cargill majority stake divestiture may have the company in play for sale.  Shares are still lower as they are under $80.00 versus above $85.00 when this was first announced, but the stock has also recovered from lows under $74.00.  And what about Market Vectors Agribusiness ETF (NYSE: MOO)?  Its shares are up 0.5% at $55.63 versus a 52-week range of $35.56 to $57.02.  As agriculture keeps doing better and as the components keep rising, so do its shares.

Shares of Potash Corp. are up nearly 4% in pre-market trading, while Caterpillar shares are up about 1.5% and CNH has seen no action. If Caterpillar’s pre-market price holds, it would mark a new 52-week high for the company. All three have posted new 52-week highs since the beginning of the year.

Paul Ausick

Large producers like Archer Daniels Midland Co. (NYSE: ADM) and Bunge Ltd. (NYSE: BG) should benefit from higher wheat and grain prices. Fertilizer makers such as The Mosaic Co. (NYSE: MOS), Monsanto Co. (NYSE: MON), and Potash Corp. of Saskatchewan (NYSE: POT) might get the biggest boost as farmers plant fewer acres but try to increase yields. In fact, we have already been given two very positive trend indications for fertilizer and planting outlooks in the last week.  Equipment makers like Deere & Co. (NYSE: DE) and CNH Global NV (NYSE: CNH) could also benefit as farmers use their increased profits to buy new equipment.

The USDA expects global wheat consumption to be 1.2 million tons below previous expectations, mostly on lower demand for feed. Wheat prices will be stronger, rising from an average price of $5.30-$5.70/bushel in the current marketing year to $5.50-$5.80. Global wheat imports and exports are expected to rise slightly, and the US is expected to export about 1.3 billion bushels of wheat, the most since 1992-1993.

US corn supplies are expected to be lower as a reduction in the national average yield lowers production by 93 million bushels even as acreage planted in corn increases by 183,000 acres. The primary support for added corn production is ethanol, which is expected to demand an additional 100 million bushels this year. Because supplies are slightly tight, ethanol makers like ADM, Valero Energy Corp. (NYSE: VLO), and Pacific Ethanol Inc. (NASDAQ: PEIX) could face higher prices for feedstock.

US consumers can also look forward to higher prices for beef, pork, and eggs, but they’ll get a break on chicken. Cotton production is expected to be down slightly, and the amount of cotton remaining in stockpiles at the end of January is expected to be just 1.9 million bales (a bale weighs 480 pounds).

In the 2008-2009 crop year, some 6.34 million bales were in stocks, at a price of $0.478/pound. The cotton price this year is projected at $0.78-$0.86/pound. This cost jump is already showing up in costs at apparel makers like Liz Claiborne Inc. (NYSE: LIZ), which are being squeezed by high prices for cotton and demand from customers for low-priced clothes.

From a producers point of view, the USDA report augurs well for the coming year. Consumers, however, are not likely to share the joy.  Clarence Beeks lives on…

Paul Ausick

Farm equipment makers like Deere & Co. (NYSE: DE) and CNH Global NV (NYSE: CNH) have seen share prices rise substantially this year. Fertilizer and seed producers, for the most part, have also done well. Potash Corp. of Saskatchewan, Inc. (NYSE: POT), The Mosaic Co. (NYSE: MOS), Syngenta AG (NYSE: SYT), Intrepid Potash Inc. (NYSE: IPI), Agrium Inc. (NYSE: AGU), and Monsanto Corp. (NYSE: MON) have watched share prices rise between 25% and 80% since July 1st. The Market Vectors Agribusiness ETF (NYSE: MOO) is up about 40% in the same time frame.

Deere is scheduled to release earnings on November 24th, and analysts are estimating EPS of $0.93 on revenue of $6.2 billion. In the same period a year ago, Deere posted EPS of $0.23, way above then-estimates of $0.03. The company has hammered estimates every quarter since.

In its most recent earning report on October 21st, CNH posted EPS of $0.43, about 27% above estimates. Like Deere, since a year ago, CNH has pounded estimates. For the quarter ending in December, CNH is expected to post EPS of $0.42 on revenue of $3.69 billion, reflecting sales growth of about 15%.

Potash Corp.’s share price has been distorted by the $38.6 billion buyout offer from BHP Billiton plc (NYSE:BHP). The $130/share offer boosted the company’s share price from around $112 to more than $150. Now that BHP says it’s withdrawing the offer, the share price will decline again, even with the company’s plan to buy back $4.2 billion in stock. But demand for potash fertilizer will keep Potash Corp. earnings and revenues rolling in, with estimates for the current quarter at EPS of $1.60 on revenue of $1.57 billion. The EPS estimate is double the year ago’s actual EPS.

Mosaic, which is majority owned by privately held Cargill, Syngenta, Intrepid, and Agrium should continue to post solid numbers as demand for fertilizer follows demand for the agricultural commodities. Cotton, corn, wheat, and soybean prices will encourage farmers to plant more and to get the expected yields, farmers will buy more fertilizer as well.

Monsanto has been struggling with sales of its latest modified corn seed, and a drop in sales of its Roundup Ready seeds. Analysts expect that to turn around somewhat in 2011, with EPS estimates rising from $2.79 in the year ending August 2011 to $3.31 in the 2012 fiscal year. Those estimates have been declining over the last 90 days, and Monsanto still looks to have an uphill climb.

Paul Ausick

Recent earnings reports from machinery makers Caterpillar Inc. (NYSE:CAT) and Deere & Co. (NYSE:DE) have been weak, but getting better. Caterpillar reported fourth-quarter and full-year 2009 earnings in January and Deere reported first quarter 2010 earnings in February. Today, CNH Global NV (NYSE:CNH) reported first quarter earnings and the news from the machinery makers looks like it’s getting better all the time.

CNH reported EPS of $0.16, before items, up from an EPS loss of -$0.53 in the same period a year ago. Sales rose 6.1%, from $3.05 billion a year ago to $3.24 billion. Analysts were expecting EPS of $0.05 on sales of $2.94 billion, so CNH beat estimates handily.

The company’s sales of agricultural machinery grew 14% year-over-year, with particularly strong growth in Latin America and sharp declines in Western Europe. The company doesn’t break out sales in China specifically, but lumps them in with the ‘Rest of World’ category, which also had a greater than 50% sales surge in construction machinery sales “dominated by demand in China on the back of infrastructure and commodity related spending.”

For the rest of 2010, CNH expects the agriculture equipment market to be flat to an increase of 5%. Construction machinery markets are expected to grow 15%-20% for the year. Caterpillar expects sales to rise 10%-25% in 2010, while Deere is looking at sales growth of 6%-8% for the year.

Like its competitors, CNH and its dealers had to work through a number of inventory issues coming out of a very weak 2009, which Caterpillar’s chairman/CEO described as “the worst our company has experienced since the Great Depression.”

CNH and Caterpillar have committed themselves to growing share in the Chinese market. Deere does about two-thirds of its business in North America, and never specifically mentions China in its last quarterly report.

Caterpillar is scheduled to report first quarter earnings next week, and analysts are expecting EPS of $0.40 on revenues of $8.63 billion. Last quarter Cat posted EPS of $0.39 on revenues of $7.9 billion.

Deere reports its second quarter earnings in May, and analysts expect EPS of $1.07 on revenues of $6.62 billion. In its last quarterly report, Deere posted EPS of $0.57 on revenue of $4.84 billion.

CNH’s earnings beat expectations, but so far today that hasn’t boosted the share price much. In fact, both Caterpillar and Deere are getting a stronger uptick than CNH. So it goes.

Paul Ausick