AutoZone Inc. (NYSE: AZO) Raised to Buy at Citigroup.
Cisco Systems, Inc. (NASDAQ: CSCO) Raised to Buy at Gleacher & Co.
Cooper Tire & Rubber Co. (NYSE: CTB) Maintained Underperform as Bear of the Day at Zacks.
Cree Inc. (NASDAQ: CREE) Raised to Buy at Canaccord Genuity.
Ecolab Inc. (NYSE: ECL) Raised to Buy at Deutsche Bank.
Ener1, Inc. (NASDAQ: HEV) Cut to Underperform at BofA/ML.
Expedia, Inc. (NASDAQ: EXPE) Reiterated Strong Buy as Value at Zacks.
First Solar Inc. (NASDAQ: FSLR) Raised to Buy at Jefferies.
Kindred Healthcare (NYSE: KND) Raised to Outperform at Wells Fargo.
Monsanto Co. (NYSE: MON) Raised to Buy at BofA/ML.
Monster Worldwide, Inc. (NYSE: MWW) Cut to Hold at Citigroup.
Mosaic Co. (NYSE: MOS) Raised to Buy at Ticonderoga.
Newmont Mining Corporation (NYSE: NEM) Raised to Buy at Stifel Nicolaus.
OpenTable, Inc. (NASDAQ: OPEN) Raised to Buy at Citigroup.
ProLogis (NYSE: PLD) Raised to Outperform at FBR.
VMware Inc. (NYSE: VMW) Raised to Outperform at FBR.
Western Refining, Inc. (NYSE: WNR) Raised to Outperform as Bull of the Day at Zacks.

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JON C. OGG

A larger oversupply problem faces makers of lithium-ion batteries for electric vehicles. The cars have not exactly been flying out of dealer showrooms, and battery makers need to develop partnerships with at least one EV maker in order to have a chance of succeeding. According to a report from Lux Research, A123 Systems, Inc. (NASDAQ: AONE) and Ener1, Inc. (NASDAQ: HEV) have generated “more headlines than momentum,” and have developed only minor partnerships that are not likely to produce significant revenue.  Another battery maker, Valence Technology Inc. (NASDAQ: VLNC) has not made profit in any of the last four quarters and is not expected to report one for its first fiscal quarter of 2012 which ended on June 30th.

While lack of partnerships may be a problem, the larger problem is the positively booming supply. Global lithium-ion manufacturing capacity is expected to reach 21,000 megawatt-hours by year-end 2012, and nearly 30,000 megawatt-hours by the end of 2015.

By 2012, demand for Nissan Leaf-class EVs is expected to reach 6,000 megawatt-hours (about 250,000 vehicles) in 2015 if the price of oil is $200/barrel. If oil reaches just $140/barrel, similar demand could be delayed until 2020.

Now it’s possible, of course, that lithium-ion battery makers will be able to expand into grid storage applications, but it remains unlikely that grid storage will take all the excess capacity. There are other, cheaper solutions for grid storage.

Chemical & Mining Co. of Chile Inc. (NYSE: SQM) is the world’s leading supplier of lithium and its shares have jumped more than 80% in the past 12 months. Top gold miner Newmont Mining Corp. (NYSE: NEM) has seen its share price fall in the same period and even the SPDR Gold Trust (NYSE: GLD) has risen a mere 30% or so. SQM’s trailing P/E is 41.26 and its forward P/E is 25.04. Price/book ratio is 9.83. If demand for lithium-ion batteries dries up, SQM shares will not trail far behind.

One company that Lux Research likes is Maxwell Technologies Inc. (NASDAQ: MXWL), a leading maker of supercapacitors that can be used in some key energy storage applications, like the start-stop fuel saving technology that most automakers are adopting for their internal combustion engines. But Maxwell too has had profit problems and its forward P/E is higher even than SQM’s. Maxwell’s price/book ratio is also a very high 4.28.

An ETF that is supposed to track the future of batteries via lithium is the Global X Lithium ETF (NYSE: LIT).  So far it is ignoring these concerns as its is up 1% at $19.62 today.

Electric vehicle sales may grow in the next few years, but a lot depends on the pump price of gasoline. But even if those prices rise above $5-$6/gallon, there will still be more than enough lithium-ion battery- making capacity.

Paul Ausick

One certain loser here is Ener1, Inc. (NASDAQ: HEV), which supplied the lithium-ion batteries for Think. But what about the other EV makers: General Motors Co. (NYSE: GM) and its all-electric Chevy Volt; Toyota Motor Corp. (NYSE: TM) and Honda Motor Corp. (NYSE: HMC) with their hybrids; and Tesla Motors, Inc. (NASDAQ: TSLA), maker of an all-electric sports car?

The market for hybrids and all-electric cars in the US in 2011 has always been projected to be quite small. Through May, about 118,000 hybrids have been sold in the US and just over 4,400 plug-in EVs. Toyota’s Prius gets about half the hybrid total. For plug-ins, the Chevy Volt has sold 2,184 cars this year, and the Nissan Leaf has sold 2,167.

There are at least a couple of ways to look at the number of plug-ins sold. One is that disruptions caused the earthquake and tsunami in Japan have weighed on production. The car makers are trying to meet demand for demos and showrooms, and still haven’t ramped production to meet demand.

If one subscribes to that view, the problem is supply, not demand. Chevy has upped its manufacturing total for 2011 to 16,000 Volts, a third more than its original plan. Nissan had planned to deliver 20,000 of its Leafs this year. Once production glitches are solved and dealers have received demo and showroom models, the makers will begin to fulfill customer demand.

Another way of looking at the same numbers is to say that while all this may be true, the current backlog of buyers’ orders is coming from early adopters who are not sensitive to price and that they represent a very small fraction of new car buyers. Until the EVs attract a larger audience with lower prices and better marketing, massive buying of EVs is in the distant future. Estimates of sales top out at about 500,000 units annually in 2020.

There are also too many players in the game, though the departure of Think helps simplify the market. European maker Smart, Fisker, and others even smaller have made noise but few sales. Their future is problematic, certainly, with Toyota, Ford, Honda, and Nissan and their deep pockets taking the top positions in sales. Even Tesla, which expects to introduce its $58,000 sedan next year, could have a tough time holding on.

And in related story, Swedish icon Saab may be in its death throes. The company, now privately held, is reportedly unable to meet its payroll, and efforts to get new investors have come to nothing so far. Saab workers could seal the company’s fate by going to court and demanding that the company be declared bankrupt, which would begin providing the workers with a government-guaranteed salary.

Shares in battery maker Ener1 are off more than -9% this morning, at $1.17, near the bottom of their 52-week range of $1.06-$5.90. Tesla’s shares are down about -2%, to $26.74, in a 52-week range of $14.98-$36.42.

Paul Ausick

Aixtron SE (NASDAQ: AIXG) Cut to Sell at Canaccord Genuity.
Bristol-Myers Squibb Company (NYSE: BMY) Cut to Neutral at Goldman Sachs.
Dick’s Sporting Goods Inc. (NYSE: DKS) Raised to Buy at Goldman Sachs.
Ener1, Inc. (NASDAQ: HEV) Cut to Sell at Wunderlich.
GNC Holdings Inc. (NYSE: GNC) Started as Market Perform at BMO; Started as Neutral at Goldman Sachs; Started as Overweight at Morgan Stanley; Started as Outperform at Credit Suisse; Started as Overweight at JPMorgan.
Harmony Gold Mining Co. Ltd. (NYSE: HMY) Raised to Neutral at HSBC.
Huntington Bancshares Inc. (NASDAQ: HBAN) Started as Outperform at Credit Suisse.
Huntsman Chemicals Corp (NYSE: HUN) Maintained Strong Buy and Value at Zacks.
JA Solar Holdings Co., Ltd. (NASDAQ: JASO) Raised to Neutral at Credit Suisse.
Johnson & Johnson (NYSE: JNJ) Raised to Buy at Goldman Sachs.
NetApp Inc. (NASDAQ: NTAP) Raised to Outperform at RBC.
New York Community Bancorp (NYSE: NYB) Started as Outperform at Credit Suisse.
Qihoo 360 Technology Co. Ltd. A (NYSE: QIHU) Started as Buy at Citigroup (late-Tuesday).
Starbucks Corporation (NASDAQ: SBUX) Reiterated Buy and $42 target at Argus.
Universal Technical Institute (NYSE: UTI) maintained Underperform as Bear of the Day at Zacks.
The Williams Companies (NYSE: WMB) Raised to Outperform as Bull of the Day at Zacks. 

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

LDK Solar Co., Ltd. (NYSE: LDK) reports earnings after markets close today, and analysts are estimating EPS $0.85 and $783.87 million in revenues. Estimates for next quarter are $0.70 EPS and $801.64 million in revenues.  Shares closed at $10.31 last Friday, within a 52-week range of $4.97 to $15.10.

Chinese battery maker Advanced Battery Technologies, Inc. (NASDAQ: ABAT) is also scheduled to report earnings after markets close today, but that’s not the company’s biggest issue. The company is the target of a report by Prescience Investment Group that states that ABAT is “fabricating its SEC financial statements.” Thomson Reuters has estimates for EPS of $0.10 on revenue of $32.47 million. Estimates for next quarter are for EPS of $0.11 on revenue of $35.81 million. The stock closed at $1.46 last Friday, and came with a penny of matching its 52-week low this morning. The 52-week range is $1.33-$4.35.

Real Goods Solar, Inc. (NASDAQ: RSOL) is a solar PV integrator and system installer. The company is expected to report EPS of $0.00 on revenue of $18.33 million after markets close today. Estimates for next quarter are EPS of $0.03 on revenue of $23.73 million. The stock closed at $2.45 on Friday and is currently trading at $2.50, near the bottom of its 52-week range of $2.25-$4.80.

Another battery maker, A123 Systems, Inc. (NASDAQ: AONE), is expected to report an EPS loss of -$0.46 on revenue of $18.16 million after markets close today. Estimates for next quarter are for an EPS loss of -$0.39 on revenue of $38.43 million. Shares closed on Friday at $5.74, within a 52-week range of $5.21-$11.53. The shares are up about 1% this morning, at $5.80.

Clean Energy Fuels Corp. (NASDAQ: CLNE), the T. Boone Pickens company that offers a compressed natural gas alternative to gasoline engines, reports earnings after markets close today. Analysts expect an EPS loss of -$0.09 on revenue of $66.90 million. Estimates for next quarter include an EPS loss of -$0.06 on revenue of $73.46 million. Shares closed at $15.39 on Friday, within a 52-week range of $11.75-$19.36. Shares are down slightly this morning, at $15.35.

US solar equipment makers like Applied Materials, Inc. (NASDAQ: AMAT) and GT Solar International, Inc. (NASDAQ: SOLR), have been competing primarily with German-based makers of the tools for manufacturing solar PV cells. As with just about everything else, though, new competition is springing up in China, according to Reuters.

The Chinese equipment firms are taking advantage of the growing capacity for solar PV cell manufacturing at the country’s largest suppliers. Through the end of 2012, Chinese solar PV makers are expected to build 2,000 new cell manufacturing lines, raising demand for furnaces and wafer-cutting machines. Analysts expect most of that equipment to be purchased from Chinese manufacturers able to offer prices as much as 30% below their US and German competitors.

Chinese solar PV equipment makers are also looking to expand outside China to markets in Taiwan, India, South Korea, and Japan. That will increase the pressure on Applied Materials, GT Solar, and the rest to reduce costs to get back in the game. There is also a strong possibility that we’ll see some consolidation to wring out costs more quickly.

An analyst at Goldman Sachs has boosted his rating on A123 Systems, Inc. (NASDAQ: AONE) from ‘neutral’ to ‘buy’ and maintained a price target of $9/share on the company’s stock.  Interestingly, the analyst sees EPS losses for 2011 thru 2013, although the projected loss in 2011 of -$1.50 is lower than a previous estimate of -$1.71. The ‘buy’ recommendation is based on a short-term opportunity related to some near-term positives.

Battery makers like A123 will continue to try to diversify from auto batteries to grid storage and other areas as they seek to grow. A123′s share price is up more than 9.5% near noon today, to $6.04, still at the lower end of the stock’s 52-week range of $5.21-$14.40. Competitor Ener1, Inc. (NASDAQ: HEV) is down nearly -5% to $2.62, after setting a new 52-week low of $2.60 earlier today.

Finally, further proof from the Pacific Northwest that all is not right with the integration of wind power into the nation’s energy grid. The regional transmission operator, Bonneville Power Administration (BPA), is likely to limit wind-generated electricity access to the grid because high water levels in the Columbia River are expected to lead to a large increase in the region’s hydropower generation. The grid can’t handle both more wind and more hydro at the same time.

Building out interconnections and increasing grid capacity sound like the right course of action, but building new capacity is very costly and only needed by wind power at relatively few periods of peak generation. There’s still a lot of work to be done to incorporate the nation’s wind capacity with the grid.

Paul Ausick

Biofuel maker Kior, Inc. has filed its Form S-1 for an Initial Public Offering. The filing does not include price or number of shares, but the company probably intends to raise up to $100 million. Khosla Ventures II, L.P. owns more than 23 million shares of Kior common stock, about 75% of the total outstanding. According to the S-1, none of these shares is included in the IPO and the shares will be locked up for 360 days after the IPO. Khosla Ventures is headed by Vinod Khosla, a long-time entrepreneur and venture capitalist who was a founder of Sun Microsystems and who has invested in many green energy companies in the past decade.

Kior is trying to join Amyris, Inc. (NASDAQ: AMRS) and Gevo, Inc. (NASDAQ: GEVO), both recent IPOs in the biofuels market. Kior’s fuel is derived from biomass to produce a “drop-in” replacement for hydrocarbon-based fuels. Corn- and cane-ethanol are not one-for-one replacements for petroleum-based fuels, and must be handled separately until blended because ethanol’s water content cannot flow through the existing petroleum pipeline systems. The largest corn-ethanol makers in the US are Archer Daniels Midland (NYSE: ADM), Valero Energy Corp. (NYSE: VLO), Pacific Ethanol, Inc. (NASDAQ: PEIX), and privately held Cargill.

In addition to the new biofuel makers, major petroleum and chemical companies are beginning to get interested in drop-in biofuels. These include E.I. du Pont de Nemours and Co. (NYSE: DD), Chevron Corp. (NYSE: CVX), and BP plc (NYSE: BP).

Kior claims that it can produce its biofuel at an unsubsidized cost of less than $1.80 gallon, which is equal to about $1.10 for a gallon of ethanol. In March 2011, corn ethanol sold for $2.49/gallon.

The company also claims that it reduces greenhouse gas emissions by more than 80% compared with petroleum-based gasoline or diesel fuel. Corn ethanol reduces GHG emissions by about 25%, while cane ethanol lowers emissions by 71% and biomass-based biodiesel reduces GHG emissions by 76%.

Kior uses primarily Southern Yellow Pine wood chips as its feedstock. The attraction here is that the feedstock is not a food crop. The company figures it will use about 500,000 tons of the stuff in four planned commercial-scale plants each capable of processing 1,500 tons of feedstock every day.

The company has never posted a profit, and its pro forma net loss per common share has grown from -$0.26 in 2008 to -$0.48 in 2009 to -$1.17 in 2010. The company had $51.4 million in cash at the end of December 2010 and working capital of about $40 million. Much of that is committed to a small commercial-scale plant in Mississippi. The proceeds of the IPO will fund a larger commercial-scale plant, also in Mississippi.

An analyst at Deutsche Bank has noted potential for lithium-ion battery makers in the grid power storage sector. A123 Systems, Inc. (NASDAQ: AONE) and Ener1, Inc. (NASDAQ: HEV), both makers of lithium auto batteries, could benefit from the need for frequency regulation on the power grid.

The world’s larges lithium-ion battery maker, Sanyo, estimates the current market for lithium-ion batteries is $13 billion, almost all in consumer products like cell phones. By 2015 the market will grow to $44 billion, with the consumer products share remaining the same, while vehicle batteries will account for another $13 billion and the rest, about $18 billion, will be used in power storage. Using relatively scarce lithium resources to build grid storage that doesn’t have a weight requirement seems a bit extravagant. This estimate could be wishful thinking.

Finally, SunPower Corp. (NASDAQ: SPWRA) has received a conditional guarantee for a $1.2 billion loan to proceed with construction on a 250-megawatt solar PV power plant in southern California. NRG Energy Inc. (NYSE: NRG) will finance and own the plant, known as California Valley Solar Ranch. First Solar Inc. (NASDAQ: FSLR) and privately held BrightSource Energy have already received guarantees worth more than $2.5 billion. The US Department of Energy has so far offered guarantees or conditional commitments to 21 projects ant more than $19 billion.

Paul Ausick

Westport Innovations Inc. (NASDAQ: WPRT) was first on the overbought list with 88 RSI and 39% from its 200 day moving average.

Clean Energy Fuels Corporation (NASDAQ: CLNE) was in the middle of the overbought list with a 77.5 RSI and 18% from its 200 day moving average.  Fuel Systems Solutions, Inc. (NASDAQ: FSYS) was also noted as one that won’t benefit that much from legislative gains in fuels.

What is interesting is that BofA said it was increasing its Wind sector to equal-weight but continues to avoid the turbine makers.  After what we saw with American Superconductor Corporation (NASDAQ: AMSC) this week (AMSC-Sinovel pact noted as huge concern) it is hard to wonder how wind was positive at all.

SmartGrid stocks were lowered to equal-weight with a 13% decline in the first quarter.  Companies like Cree Inc. (NASDAQ: CREE), Itron, Inc. (NASDAQ: ITRI), and even EnerNOC, Inc. (NASDAQ: ENOC) were all noted as seeing most of the damage being done but with no quick snapback for most.  LED and meter-demand is called “lumpy, but rising through time.”

Storage is actually looked at somewhat favorably.  A123 Systems, Inc. (NASDAQ: AONE) and Ener1, Inc. (NASDAQ: HEV) are both being called oversold and it was noted as surprising that  higher oil prices have not helped.

BofA is one of many firms which have mixed views on CleanTech ahead.  The moves in March from Japan have likely contributed to even more of the confusion on top of the recent gains in oil due to Middle East turmoil and supply disruptions.

JON C. OGG

Berkshire Hathaway Inc. (NYSE: BRK-B) may have been the accidental “Whoops!” on timing but the call still matters long-term.  David Sokol’s embarrassment this last week is more likely to end up being a Sokol issue rather than a true Berkshire Hathaway issue.  Zacks Investment Research named it the BULL OF THE DAY on Tuesday and it has an Outperform rating on Mr. Buffett’s flagship.

Dendreon Corporation (NASDAQ: DNDN) had a great week due to CMS reimbursement issues going in its favor.  We highlighted it as one of five biotechs with 50% upside this week but a boost from Canaccord Genuity could bring us to think there is much more upside than that.   Canaccord’s analyst talked about $4 billion in potential annual Provenge sales, a figure that was well above our models.

Las Vegas Sands Corporation (NYSE: LVS) and Wynn Resorts Ltd. (NASDAQ: WYNN) were the beneficiaries of a call more tied to Las Vegas Sands on Friday, but this feels like a two-in-one.  Stifel Nicolaus upgraded Las Vegas Sands to Buy from Hold by Stifel Nicolaus after Macau gaming revenues were higher and after an investigation took a bite out of shares on Thursday.  This was a redemption upgrade on Las Vegas Sands.  JPMorgan was positive on both Wynn and on Las Vegas Sands as well.  Las Vegas Sands saw its shares trade up 3.4% to $43.65 and Wynn saw its shares close up 4.6% at $133.01 on Friday.

Tesla Motors, Inc. (NASDAQ: TSLA) got a research report that was either genius or absurd and it had a massive impact on the stock.  Tesla’s stock rose 17% on Thursday to $27.75 and shares were at one point above 20% on the day after Morgan Stanley gave an official $70 price target after raising it to “overweight.”  This was the single biggest impact call of the week as Morgan Stanley touted that Tesla could become “The Big Four” in U.S. automakers. Options volume was up tenfold and stock volume was through the roof.  While the upgrade did note many risks to the upside and to the model, the note even left more room above the $70.00 target.  This is one call which felt like bull-market-mania.  Time will prove it to either be genius or over-ambition clouding judgment.

Our fifth call is a tie between two clean-tech companies in alternative energy.  Bank of America Merrill Lynch offered up a large list of clean-tech picks with the most upside.  The two that stood out the most were A123 Systems, Inc. (NASDAQ: AONE) and Ener1, Inc. (NASDAQ: HEV), each with 50% to 60% implied upside per the research report.

You can join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

In the mix, there are at least some growth and opportunity catalysts ahead where the new emerging leaders are trumping the old industry giants in innovation.  Cree Inc. (NASDAQ: CREE) is inventing new LEDs over General Electric Co. (NYSE: GE).  First Solar Inc. (NASDAQ: FSLR) is leading solar rather than BP plc (NYSE: BP).  Amyris, Inc. (NASDAQ: AMRS) and Gevo, Inc. (NASDAQ: GEVO) are listed as the biofuels leaders rather than Exxon Mobil Corporation (NYSE: XOM), and Tesla Motors, Inc. (NASDAQ: TSLA) is leading General Motors Corporation (NYSE: GM) in electric vehicle innovation.

In the green space, BofA/ML sees First Solar Inc. (NASDAQ: FSLR) as the cost leader and the $175 price target compares to $153.50 today.  SunPower Corporation (NASDAQ: SPWRA) is still just a Neutral despite an opportunity for contrarians, but the $21.00 BofA target compares to a share price of $16.75 today.

EnerNOC, Inc. (NASDAQ: ENOC) was listed as one it overestimated in 2011 to 2012 but notes that there could still be substantial upside.  The $23 price target compares to $19.30 today. Cree Inc. (NASDAQ: CREE) is one where BofA has less conviction than it said it would like and its $48 price target implies less than 10% upside.

A123 Systems, Inc. (NASDAQ: AONE) and Ener1, Inc. (NASDAQ: HEV) may now have better upside in grid storage so the winner will be the one which can best sell to utilities.  A123 was given a $12 target, implying more than 50% upside to the $7.80 share price today.  Ener1, Inc. (NASDAQ: HEV) was given a $5.00 price target, implying more than 60% upside to the $2.97 share price.

Clean Energy Fuels Corp. (NASDAQ: CLNE) is the one which can best win in LNG conversion for trucks rather than diesel.  The T. Boone Pickens company was given a $15 price target, which implies little upside based on a $14.50 share price today.

The overall tone is still rather positive here on many sector leaders for the long-term.  The difference is that the old expectations for exponential investment return opportunities is just not as telegraphed here in this message.

24/7 Wall St.’s Paul Ausick recently highlighted the low valuation multiples found in many of the key solar names.  Some are far cheaper than established utilities.  That being said, is it fair to ask if we are already entering the part of the business cycle for alternative energy that these have to be evaluated as future utility operators rather than high-growth stocks?

JON C. OGG