24/7 Wall St. » DRI

Top Analyst Upgrades & Downgrades (APA, BBT, CVC, CHK, DRI, EMN, EW, MRO, NBL, PEET, RIMM, RBS, SLM, URBN)

Administrator — Fri, 03 Feb 2012 13:07:02 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street brokerage and research firms this Friday morning.

Apache Corporation (NYSE: APA) Started as Outperform at Credit Suisse.
BB&T Corp. (NYSE: BBT) Raised to Equal-Weight at Barclays.
Cablevision Systems Corporation (NYSE: CVC) Cut to Underweight at JPMorgan.
Chesapeake Energy Corporation (NYSE: CHK) Started as Neutral at Credit Suisse.
Darden Restaurants, Inc. (NYSE: DRI) named Bear of the Day at Zacks.
Eastman Chemical Company (NYSE: EMN) named as Value stock of the day at Zacks.
Edwards Lifesciences Corporation (NYSE: EW) Cut to Market Perform at Wells Fargo.
Marathon Oil Corporation (NYSE: MRO) Cut to Hold at Argus.
Noble Energy Inc. (NYSE: NBL) Started as Outperform at Credit Suisse.
Peet’s Coffee & Tea, Inc. (NASDAQ: PEET) Raised to Outperform at Baird.
Research in Motion Ltd. (NASDAQ: RIMM) Cut to Underperform at Jefferies.
Royal Bank of Scotland (NYSE: RBS) Cut to Hold at Deutsche Bank.
SLM Corp. (NYSE: SLM) named as Bull of the Day at Zacks.
Urban Outfitters, Inc. (NASDAQ: URBN) Raised to Buy from Neutral at Janney Capital.

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

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: APA, BBT, CHK, CVC, DRI, EMN, EW, MRO, NBL, PEET, RBS, RIMM, SLM, URBN

Top Analyst Upgrades & Downgrades (AKS, ALU, AWK, APA, AF, AZK, DRI, HBAN, PHG, LTD, PIR, Rl, RL, UL, URBN, VIP, WBMD, WCC)

Administrator — Wed, 11 Jan 2012 13:07:18 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street brokerage and research firms this Wednesday morning.

AK Steel Holding Corp. (NYSE: AKS) Raised to Outperform with $12 target at Credit Suisse.
Alcatel-Lucent, S.A. (NYSE: ALU) Raised to Buy at Deutsche Bank.
American Water Works Company, Inc. (NYSE: AWK) Raised to Buy at Ladenburg Thalmann.
Apache Corporation (NYSE: APA) Started as Buy at Stifel Nicolaus.
Astoria Financial Corporation (NYSE: AF) Cut to UNderweight at JPMorgan.
Aurizon Mines Ltd. (NYSE: AZK) named as Value Stock of the Day at Zacks.
Darden Restaurants, Inc. (NYSE: DRI) Maintained Underperform as Bear of the Day at Zacks.
Huntington Bancshares Inc. (NASDAQ: HBAN) Cut to Hold at Stifel Nicolaus.
Koninklijke Philips Electronics NV (NYSE: PHG) Cut to Sell at Citigroup.
Lazard Ltd. (NYSE: LTD) Cut to Neutral at Citigroup.
Pier 1 Imports Inc. (NYSE: PIR) Started as Hold at Argus.
Ralph Lauren Corporation (NYSE: RL) Cut to Market Perform at Wells Fargo.
Unilever PLC (NYSE: UL) Cut to Underperform at BofA/ML.
Urban Outfitters Inc. (NASDAQ: URBN) Cut to Sell at Citigroup.
VimpelCom Ltd. (NYSE: VIP) Raised to Neutral at Goldman Sachs.
WebMD Health Corporation (NASDAQ: WBMD) Cut to Market Perform at Wells Fargo.
WESCO International (NYSE: WCC) Raised to Outperform as Bull of the Day at Zacks.

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, IPOs, M&A, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

JON C. OGG

Filed under: Analyst Calls Tagged: AF, AKS, ALU, APA, AWK, AZK, DRI, HBAN, LTD, PHG, PIR, RL, UL, URBN, VIP, WBMD, WCC

24/7 Wall St. Closing Bell (ZNGA, AAPL, SCCO, AMGN, DFS, RIMM, DRI, STEI, HOV, ZQK, ISTA, RRR, MRT, INHX, CRYP, CIE)

Paul Ausick — Fri, 16 Dec 2011 21:08:47 +0000

US equity markets opened solidly higher this morning, but began to lose momentum by mid-morning. From there it’s been a mostly downhill day with the DJIA creeping back to nearly flat with about an hour of trading left this week. The release of November’s CPI — flat and up just 0.1% excluding food and energy — made no impact on trading. The IPO of social game maker Zynga Inc. (NASDAQ: ZNGA) went out at $10/share, but appears to be headed for a lower finish by about -5%. The US dollar showed some muscle today, and Treasury yields were lower, keeping the appetite for risk under wraps. WTI crude rose about 0.3% to $94.16/barrel and Brent crude was up by the same percentage at $103.91. Gold closed at $1,598.60, up about 1.4%.

The unofficial closing bells put the DJIA down about 6 points to 11,862.68 (-0.05%), the NASDAQ rose more than 14 points (0.56%) to 2,555.33, and the S&P 500 rose 0.3% or more than 3.5 points to 1,219.40.

There were several analyst upgrades and downgrades today, including an “outrageous” prediction from the UK’s Saxo Bank that Apple Inc. (NASDAQ: AAPL) would lose half its value in 2012. Other ratings actions today include Southern Copper Corp. (NYSE: SCCO) restarted as ‘equal weight’ with a $35 target price at Morgan Stanley; Amgen Inc. (NASDAQ: AMGN) raised to ‘neutral’ with a target price of $57 at Goldman Sachs; and Discover Financial Services (NYSE: DFS) raised to ‘buy’ at Stifel Nicolaus. Research in Motion Ltd. (NASDAQ: RIMM) received a number of ratings changes this morning following an uninspired earnings report and delayed release of its new operating system software: shares cut to ‘market perform’ at BMO Capital Markets; maintained as ‘hold’ at Needham; maintained as ‘neutral’ at Credit Suisse; maintained ‘hold’ with lowered price target of $15 at Canaccord Genuity.

Here are today’s post-earnings news reactions with prices during the last half-hour of trading: Research in Motion Ltd. is down more than -11.5% at $13.38, after posting a new 52-week low of $13.12; Darden Restaurants Inc. (NYSE: DRI) is down -0.5% at $43.52; Steward Enterprises, Inc. (NASDAQ: STEI) is down more than -1.5% at $5.41; Hovananian Enterprises Inc. (NYSE: HOV) is down more than -4% at $1.29; and Quiksilver Inc. (NYSE: ZQK) is up more than 11% at $3.42.

Other standouts from today include the following stocks:

ISTA Pharmaceuticals Inc. (NASDAQ: ISTA) is up nearly 71% at $6.65. The eye-care drug company is the target of a hostile takeover bid from Valeant Pharmaceuticals International Inc. (NYSE: VRX) at a 68% premium to last night’s closing share price, or $6.50/share. More coverage here.

RSC Holdings Inc. (NYSE: RRR) is up more than 57% at $17.88, a new 52-week high. The construction and industrial equipment rental company is being acquired by competitor United Rentals Inc. (NYSE: URI) for $18/share, or about $1.9 billion in cash and stock.

Morton’s Restaurant Group Inc. (NYSE: MRT) is up nearly 33% at $$6.85. The steakhouse chain has agreed to an all-cash acquisition by privately held Landry’s Inc. at $6.90/share, for a total price of about $116.6 million.

Inhibitex Inc. (NASDAQ: INHX) is down more than -20.5% at $10.32. The biopharmaceutical firm is being hit with concerns over a new hepatitis C drug following the withdrawal of a rival drug discovered to impair liver function.

CryptoLogic Ltd. (NASDAQ: CRYP) is up more than 42% at $2.25, after posting a new 52-week high of $2.30 earlier today. The online gambling software maker is expected to get a takeover offer from Amaya Gaming Group (OTC: AMYGF) worth about $34.5 million.

Cobalt International Energy Inc. (NYSE: CIE) is up more than 21% at $10.90. The oil & gas E&P company was able to extend its lease on a deepwater rig from Transocean Ltd. (NYSE: RIG) that enables the company to continue exploring for two prospects offshore of Angola that the company believes may hold up to 2 billion barrels of crude.

Stay tuned for Monday. Richmond Federal Reserve Bank President Jeffrey Lacker is speaking in Charlotte, NC. Here are other noteworthy events on the schedule (all times Eastern):

10:00 a.m. – National Association of Builders housing market index
11:30 a.m. – 3- and 6- month Treasury bill auction
1:00 p.m. – Two-year Treasury note auction

Have a great weekend.

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: AAPL, AMGN, CIE, CRYP, DFS, DRI, HOV, INHX, ISTA, MRT, RIMM, RRR, SCCO, STEI, ZNGA, ZQK

24/7 Wall St. Closing Bell (GOOG, JDSU, DRI, CB, LNKD, SAI, VRA, MTN, VLGEA, MW, TLB, MNI, MSO, FSLR, JAG, GBG)

Paul Ausick — Wed, 07 Dec 2011 21:06:59 +0000

Equities fell sharply after this morning’s opening. Futures were soft prior to the opening bell due largely to continue to worry about Europe and a forecast cut to the European Central Bank’s lending rate from 1.25% to 1%. The mid-morning report on US crude oil stocks put a halt to any thought of a crude price rise, with US inventories growing by 1.3 million barrels following a 3.9 million barrel increase the week before. WTI is trading down almost $1, at $100.30/barrel late in the day, and Brent is trading at $109.45/barrel, down more than $1.35. Gold is up nearly 0.75%, at $1,744.60.

The unofficial closing bells put the DJIA up more than 45 points to 12,195.61 (0.37%), the NASDAQ fell less than 1 point (-0.01%) to 2,649.21, and the S&P 500 rose 0.20% or more than 2 points to 1,261.02.

There were several analyst upgrades and downgrades today, including Google Inc. (NASDAQ: GOOG) started as ‘buy’ with a $725 target price at Canaccord Genuity. Other ratings actions today include JDS Uniphase Corp. (NASDAQ: JDSU) started as ‘buy’ with a $14.75 target price at Jefferies; Darden Restaurants Inc. (NYSE: DRI) cut to ‘hold’ from ‘buy’ at Argus; Chubb Corp. (NYSE: CB) started as ‘outperform’ at Credit Suisse; and LinkedIn Corp. (NASDAQ: LNKD) started as ‘buy’ with an $85 target price at Canaccord Genuity.

Here are today’s post-earnings news reactions with prices during the last half-hour of trading: SAIC Inc. (NYSE: SAI) is up 6.5% at $12.95; Vera Bradley Inc. (NASDAQ: VRA) is down about -1.5% at $36.62; Vail Resorts Inc. (NYSE: MTN) is up slightly less than -1% at $45.48; Village Super Market Inc. (NASDAQ: VLGEA) is down more than -3.8% at $30.49; and The Men’s Wearhouse, Inc. (NYSE: MW) is up more than 20% at $32.68.

Several other standouts from today are as follows…

The Talbots Inc. (NYSE: TLB) is up about 65% at $2.58. The women’s clothing store has received a takeover offer from private equity firm Sycamore Partners for $3.00/share, a 92% premium to the stock’s closing price yesterday.

The McClatchy Co. (NYSE: MNI) is up more than 52%, at $1.80. The newspaper company said that advertising rates have not fallen as badly in the first two months of the current quarter. For the first nine months of this year ad revenue declined -10%, compared with a decline of -5.6% in October and November.

Martha Stewart Living Omnimedia Inc. (NYSE: MSO) is up more than 32%, to $4.12. Retailer J.C. Penney Co. (NYSE: JCP) acquired a 16.6% stake in the lifestyle and media company today for $3.50/share, or $38.5 million. More coverage here.

First Solar Inc. (NASDAQ: FSLR) is up more than 4.6%, at 48.26. The company sold its 550-megawatt Topaz solar PV plant to a subsidiary of Berkshire Hathaway Inc. (NYSE: BRK-A) for an undisclosed sum. The plant had previously been valued at more than $2 billion. More coverage here.

Jaguar Mining Inc. (NYSE: JAG) is down -9.6%, at $6.55. The junior gold miner said yesterday that its founding CEO had resigned.

Great Basin Gold Ltd. (AMEX: GBG) is up about 17.8%, at $1.19. Another junior gold miner, Great Basin has finalized a $150 million term credit facility for 5 years at a rate 4% above LIBOR.

Stay tuned for Thursday. Here are some noteworthy events on the schedule (all times Eastern):

8:30 a.m. – New US unemployment claims report
10:00 a.m. – Wholesale trade report
10:30 a.m. – EIA weekly natural gas status report
4:30 p.m. – Federal Reserve balance sheet
4:30 p.m. – Money supply report

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: CB, DRI, FSLR, GBG, GOOG, JAG, JDSU, LNKD, MNI, MSO, MTN, MW, SAI, TLB, VLGEA, VRA

Top Analyst Upgrades & Downgrades (ALL, AMZN, BX, CTL, CB, DRI, FSL, GEOI, GOOG, JDSU, LNKD, BTU, PEG, DGX, TLB, TRV, UIS, UNH, URBN, WSH)

Administrator — Wed, 07 Dec 2011 13:25:40 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street research calls this Wednesday morning.

Allstate Corporation (NYSE: ALL) Started as Outperform at Credit Suisse.
Amazon.com Inc. (NASDAQ: AMZN) Started as Hold with $225.00 price target “due to low margins through 2012″ at Canaccord Genuity.
The Blackstone Group LP (NYSE: BX) Raised to Buy with $20.00 price target at Argus.
CenturyLink, Inc. (NYSE: CTL) named as value stock of the day at Zacks.
Chubb Corporation (NYSE: CB) Started as Outperform at Credit Suisse.
Darden Restaurants Inc. (NYSE: DRI) Cut to Hold from Buy at Argus.
Freescale Semiconductor Inc. (NYSE: FSL) Reinstated as Outperform at Credit Suisse.
GeoResources, Inc. (NASDAQ: GEOI) Started as Buy with $43 price target “on a concentrated Eagle Ford/Bakken exposure” by Canaccord Genuity.
Google Inc. (NASDAQ: GOOG) was initiated with a ‘Buy’ rating and $725.00 price target “on robust growth and great value” by Canaccord Genuity.
JDS Uniphase Corporation (NASDAQ: JDSU) Started in new coverage as Buy with a $14.75 price target at Jefferies.
LinkedIn Corporation (NYSE: LNKD) Started as Buy with $85 price target as “growth trumps valuation” by Canaccord Genuity.
Peabody Energy Corporation (NYSE: BTU) Downgraded to Neutral from Buy with $43 price target by Goldman Sachs.
Public Service Enterprise Group Inc. (NYSE: PEG) Downgraded to Neutral from Buy with $33 price target at Goldman Sachs.
Quest Diagnostics Inc. (NYSE: DGX) Started as Hold with $51 target at Auriga.
The Talbots, Inc. (NYSE: TLB) maintained Neutral with $3.00 fair value by Janney Capital Markets.
Travelers Cos. Inc. (NYSE: TRV) Started as Outperform at Credit Suisse.
Unisys Corporation (NYSE: UIS) Raised to Outperform as Bull of the Day at Zacks.
UnitedHealth Group Inc. (NYSE: UNH) added to the US Focus List at Credit Suisse.
Urban Outfitters, Inc. (NASDAQ: URBN) Maintained Neutral with $23.00 price target at Janney Capital Markets.
Willis Group Holdings, PLC (NYSE: WSH) named Bear of the Day at Zacks.

JON C. OGG

Filed under: Analyst Calls Tagged: ALL, AMZN, BTU, BX, CB, CTL, DGX, DRI, FSL, GEOI, GOOG, JDSU, LNKD, PEG, TLB, TRV, UIS, UNH, URBN, WSH

24/7 Wall St. Closing Bell (MO, VZ, TSO, LNKD, GE, CHKR, BTH, PBY, UEC, AZO, DRI, TOL, LQDT, DMND, SAI, VRA, FRO, CTIC, CRK, VG, HL)

Paul Ausick — Tue, 06 Dec 2011 21:11:36 +0000

Equities opened a little weaker this morning, but by 10:00 a.m. markets had turned slightly positive and have remained in positive territory for the rest of the day. The gain has not been huge, but it is a gain. The lack of enthusiasm from either buyers or sellers reflected the mood from European bourses as well. WTI crude oil rose 0.11%, to near $101.10 just before today’s close. Gold was off -0.02%, at $1,730.30/ounce.

The unofficial closing bells put the DJIA up more than 52 points to 12,150.13 (0.43%), the NASDAQ fell more than 6 points (-0.23%) to 2,649.56, and the S&P 500 rose 0.11% or nearly 5 points to 1,258.47.

There were several analyst upgrades and downgrades today, including Altria Group Inc. (NYSE: MO) started as ‘buy’ at Deutsche Bank. Other ratings action include Verizon Communications Inc. (NYSE: VZ) reiterated as ‘buy’ with a $44 price target at Argus; Tesoro Corp. (NYSE: TSO) cut from ‘outperform’ to ‘neutral’ with a $34 price target at Credit Suisse; LinkedIn Corp. (NASDAQ: LNKD) raised to ‘overweight’ at JPMorgan; and General Electric Co. (NYSE: GE) raised to ‘outperform’ by Berstein.

Here are today’s post-earnings news reactions with prices during the last half-hour of trading: Chesapeake Granite Wash Trust (NYSE: CHKR) is up 0.7% at $19.94; Blyth, Inc. (NYSE: BTH) is down -0.05% at $66.33; Pep Boys-Manny, Joe, and Jack (NYSE: PBY) is down -5.5% at $11.21; Uranium Energy Corp. (AMEX: UEC) is up 0.66% at $3.06; AutoZone Inc. (NYSE: AZO) is down -0.12% at $338.56; Darden Restaurants Inc. (NYSE: DRI) is down -12% at $41.95; Toll Brothers Inc. (NYSE: TOL) is up nearly 3% at $21.37; and Liquidity Services Inc. (NASDAQ: LQDT) is up nearly 5.5% at $36.74, after posting a new 52-week high of $37.05 earlier in the day. Earnings releases coming after markets close today include Diamond Foods Inc. (NASDAQ: DMND); SAIC Inc. (NYSE: SAI); and Vera Bradley Inc. (NYSE: VRA).

Several other standouts from today are as follows…

Frontline Ltd. (NYSE: FRO) is up more than 19%, to $4.23. The oil tanker company has been suffering from low day rates and lack of cargoes, but today’s injection of $500 million from a Norwegian bank controlled by the company’s major shareholder, John Fredriksen, has pumped up interest in the stock.

Cell Therapeutics, Inc. (NASDAQ: CTIC) is up 14%, at $1.31. The drug-maker received notice from the FDA that its new drug application for a treatment for non-Hodgkins lymphoma is complete.

Comstock Resources Inc. (NYSE: CRK) is up nearly 15%, at $19.39. The oil & gas E&P company has acquired new acreage in the Delaware Basin of west Texas and reported that it had drilled five new producing wells in its Eagle Ford shale acreage.

Vonage Holdings Corp. (NYSE: VG) is down nearly -5%, at $2.52. The VoIP provider did not report any significant news, but the stock has been quite volatile over the past month.

Hecla Mining Co. (NYSE: HL) is up more than 9%, at $6.57. The miner benefited from today’s investors’ interest in gold mining stocks.

Stay tuned for Wednesday. We have noted Federal Reserve Governor Sarah Bloom Raskin moderating a panel on grass-roots participation at Baltimore branch of Richmond Fed. Here are other noteworthy events scheduled for Tuesday (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
10:30 a.m. – EIA weekly petroleum status report
3:00 p.m. – Report on outstanding consumer credit

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: AZO, BTH, CHKR, CRK, CTIC, DMND, DRI, FRO, GE, HL, LNKD, LQDT, MO, PBY, SAI, TOL, TSO, UEC, VG, VRA, VZ

Top Analyst Upgrades & Downgrades (NLY, ARUN, COG, KO, CREE, DRI, HPQ, HMC, LEN, PEP, KWR, SFD, VECO)

Administrator — Fri, 18 Nov 2011 13:15:03 +0000

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

Annaly Capital Management, Inc. (NYSE: NLY) Cut to Market Perform at KBW.
Aruba Networks, Inc. (NASDAQ: ARUN) Raised to Buy at Janney.
Cabot Oil & Gas Corporation (NYSE: COG) named Bull of the Day at Zacks.
The Coca-Cola Company (NYSE: KO) Started as Buy at Jefferies.
Cree Inc. (NASDAQ: CREE) Started as Buy at Goldman Sachs.
Darden Restaurants, Inc. (NYSE: DRI) Cut to Equal-Weight at Morgan Stanley.
Hewlett-Packard Co. (NYSE: HPQ) Raised to Buy at Stern Agee.
Honda Motor Company (NYSE: HMC) named Bear of the Day at Zacks.
Lennar Corporation (NYSE: LEN) Cut to Neutral at Citigroup.
Pepsico Inc. (NYSE: PEP) Started as Hold at Jefferies.
Quaker Chemical Corporation (NYSE: KWR) named Value stock of the day at Zacks.
Smithfield Foods Inc. (NYSE: SFD) Raised to Outperform at Credit Suisse.
Veeco Instruments Inc. (NASDAQ: VECO) Started as Neutral at Goldman Sachs.

JON C. OGG

Filed under: Analyst Calls Tagged: ARUN, COG, CREE, DRI, HMC, HPQ, KO, KWR, LEN, NLY, PEP, SFD, VECO

Top Debt and Ratings Agency Actions (PKX, HOV, PENN, DRI)

Administrator — Wed, 05 Oct 2011 19:19:51 +0000

Today’s top debt rating story has to be the downgrade by Moody’s of Italian bonds by three notches, from ‘Aa2′ to ‘A2′, while keeping a negative outlook on the country’s debt. And the agency warned that the rating could fall further in the event long-term uncertainty over availability of liquidity from external sources — say, for example, Germany. Moody’s said in mid-September that it was reviewing Italy’s rating, and no one really expected a result much different from what the agency announced today.

Other significant ratings actions were taken on Korean steelmaker POSCO (NYSE: PKX), homebuilder Hovnanian Enterprises, Inc. (NYSE: HOV), gaming company Penn National Gaming, Inc. (NASDAQ: PENN), and dining company Darden Restaurants, Inc. (NYSE: DRI).

POSCO’s (NYSE: PCX) domestic Korean engineering and construction subsidiary Posco E&C received a downgrade on its long-term corporate credit from ‘BBB+’ to ‘BBB’ from Standard & Poor’s. The agency also put the company’s long-term corporate credit outlook at ‘negative’. S&P suggested that except for the parent company’s strength the rating could be lower. Weak demand for new housing in Korea coupled with the E&C company’s projected weakness in a soft foreign market for new building led to the downgrade.

Hovnanian Enterprises, Inc. (NYSE: HOV) received a downgrade of its corporate credit rating from ‘CCC’ to ‘CC’ from S&P. The agency also downgraded $1.6 billion in the company’s rated debt securities. The downgrades were due to an exchange offer from one of the company’s subsidiaries that S&P viewed as a ‘distressed exchange’ and “tantamount to a default.” The existing senior notes carry coupons ranging from 6.25% to 11.875% maturing in 2014-2017, and the exchange offer includes new 2% secured notes maturing in 2021. S&P said that if the company goes through with the exchange offer the agency will downgrade the corporate rating to ‘SD’ and the existing exchanged notes to ‘D’. Hovnanian shares posted a new 52-week low today of $1.05, and is trading at about $1.06, down -4.5%, in the late afternoon. The stock’s 52-week high is $5.00.

Fitch Ratings also placed Hovnanian on Rating Watch ‘Negative’ following the exchange offer.

Penn National Gaming, Inc. (NASDAQ: PENN) received an issue-level ratings upgrade on its subordinated debt from ‘BB-’ to ‘BB’ at S&P. The resort and gaming company has agreed to fund redemption of $250 million in 6.75% senior subordinated notes due 2015 with its new revolving $2.15 billion revolving credit facility. Penn’s shares are trading up more than 3%, at $35.19, in a 52-week range of $30.34-$44.29.

Darden Restaurants, Inc. (NYSE: DRI) received a ‘BBB’ rating on a proposed issuance of $350 million in senior unsecured notes due 2021 from Fitch Ratings. The rating outlook is ‘stable’. The new notes will rank equally with existing senior unsecured debt. Darden’s shares are trading up about 2.75%, at $43.17, in a 52-week range of $40.69-$53.81.

Paul Ausick

Filed under: Analyst Calls, Bonds Tagged: DRI, HOV, PENN, PKX

Can Yum! Buck the Downtrend in Casual Dining? (YUM, DRI, MCD, SBUX, CMG)

Administrator — Tue, 04 Oct 2011 15:18:00 +0000

After the markets close today, Yum! Brands (NYSE: YUM) will report its third-quarter earnings. Analysts are expecting EPS of $0.83 on revenue of $3.1 billion, compared with second-quarter EPS of $0.63 on revenue of $2.82 billion. Big things are expected from Yum!, which gets more than 40% of its revenues from its China operations. But will China be enough following last week’s disappointing report from Darden Restaurants (NYSE: DRI) brought the whole casual dining sector down?

Darden, which owns and operates Olive Garden and Red Lobster stores among others, went ex-dividend today on its $0.43 quarterly dividend payable on November 1st. The company’s dividend yield is now about 4.18%. A more direct competitor to Yum! is McDonald’s (NYSE: MCD), which has been trying to step up its presence in China, as has Starbucks (NASDAQ: SBUX). Another tack is that taken by Chipotle Mexican Grill (NYSE: CMG), which is opening a new chain of Asian food stores.

McDonald’s faltering same-store sales are particularly a surprise in Asia, where August sales fell -0.3% compared with an expected rise of 3.5%. What has been working for the Golden Arches in the U.S. — introductions of higher margin drinks and other products — apparently has not translated well into Chinese.

Yum! — which operates KFC, Taco Bell and Pizza Hut — is expected to see Chinese same-store sales growth of 12% in the third quarter. U.S. same-store sales are expected to fall -3%, and analysts are concerned that sales in China will get softer as economic growth cools. The big question for Yum! is whether or not China’s consumers are still willing to line up for fried chicken, tacos and pizza. The company is betting heavily that they will, as expansion plans call for roughly five times as many stores in China over the next several years.

Starbucks has its eye on China as well, looking to more than double its complement of about 750 stores in the country over the next several years. The issue Starbucks must overcome is different from either Yum! or McDonald’s, which appeal to a family crowd in the bigger cities. The Starbucks consumer in China needs to have a little extra cash to spend for the company’s higher-priced coffee drinks, and the number of Chinese consumers who meet that requirement is relatively small. Plus, many will be those same customers for burgers and pizza with the family.

Chipotle’s new ShopHouse Southeast Asian Kitchen stores are targeted to attract the same customers as its popular Mexican food stores. These are the value-conscious consumers and there are sure to be more of them as the U.S. economy continues in the doldrums. This approach may gain traction because Asian food has yet to blanket the U.S. in the same way that burgers, fried chicken and pizza do.

When Yum! reports earnings today, an important number to look at will be their sales in emerging nations other than China. If that number is light, and U.S. sales are soft, Yum! may have a tough time convincing investors that China is the answer to their prayers.

Yum’s shares are down about -0.5% in the first 90 minutes of trading this morning, at $48.23, in a 52-week range of $46.09 – $57.75. McDonald’s shares are off more than -2%, at $84.15, in a 52-week range of $72.14 – $91.22. Starbucks shares are down about -0.2%, at $36.14, in a 52-week range of $25.37 – $42.00. Chipotle’s shares are up about 0.1%, at $293,01, in a 52-week range of $171.24 – $346.78.

Paul Ausick

Filed under: Earnings, Food, Retail Tagged: CMG, DRI, MCD, SBUX, YUM

Top Analyst Upgrades & Downgrades (AMGN, ARIA, BIIB, CELG, LFC, CSCO, DRI, FIO, GPN, HUM, LEN, MSI, TLB, TZOO)

Administrator — Thu, 08 Sep 2011 12:23:27 +0000

These are some of this Thursday’s top analyst upgrades, downgrades, and initiations seen having an impact from Wall Street research calls.

Amgen Inc. (NASDAQ: AMGN) Started as Outperform at BMO.
Ariad Pharmaceuticals Inc. (NASDAQ: ARIA) Started as Outperform at BMO.
Biogen Idec Inc. (NASDAQ: BIIB) Started as Underperform at BMO.
Celgene Corporation (NASDAQ: CELG) Started as Outperform at BMO.
China Life Insurance (NYSE: LFC) Started as Underperform as Bear of the Day at Zacks.
Cisco Systems, Inc. (NASDAQ: CSCO) Raised to Buy at Auriga.
Darden Restaurants, Inc. (NYSE: DRI) Raised to Outperform at Wells Fargo.
Fusion-io Inc. (NYSE: FIO) Started as Sell at Merriman.
Global Payments Inc. (NYSE: GPN) Started as Buy at Citigroup.
Humana Inc. (NYSE: HUM) named value stock of the day at Zacks.
Lennar Corporation (NYSE: LEN) Started as Outperform at FBR.
Motorola Solutions, Inc. (NYSE: MSI) Raised to Outperform as Bull of the Day at Zacks.
The Talbots Inc. (NYSE: TLB) Raised to Neutral at Piper Jaffray.
Travelzoo Inc. (NASDAQ: TZOO) Cut to Market Perform at Morgan Keegan.

JON C. OGG

Filed under: Analyst Calls Tagged: AMGN, ARIA, BIIB, CELG, CSCO, DRI, FIO, GPN, HUM, LEN, LFC, MSI, TLB, TZOO