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Top Analyst Upgrades and Downgrades (AIXG, BK, COCO, EMC, GILD, MIR, MUR, NBG, NTAP, PNC, RRI, LCC, WERN)

Administrator — Tue, 25 May 2010 12:20:26 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen early this Tuesday morning in Wall Street research calls:

Aixtron Aktiengesellschaft (NASDAQ: AIXG) Cut to Neutral at JPMorgan Cazenove.
The Bank of New York Mellon Corporation (NYSE: BK) Started as Buy at Jefferies.
Corinthian Colleges Inc. (NASDAQ: COCO) Cut to Hold at Argus.
EMC Corp. (NYSE: EMC) Cut to Neutral at JPMorgan.
Gilead Sciences Inc. (NASDAQ: GILD) Raised to Hold from Sell at Morgan Joseph.
Mirant Corporation (NYSE: MIR) Raised to Neutral from Sell at UBS.
Murphy Oil Corporation (NYSE: MUR) Raised to Hold from Sell at Benchmark.
National Bank of Greece SA (NYSE: NBG) Cut to Underweight at JPMorgan Cazenove; Citigroup cut price target but kept at Buy rating.
NetApp, Inc. (NASDAQ: NTAP) Raised to Overweight at JPMorgan.
PNC Financial Services Group (NYSE: PNC) Raised to Outperform at KBW.
RRI Energy (NYSE: RRI) Raised to Neutral from Sell at UBS.
US Airways Group (NYSE: LCC) Raised to Overweight at JPMorgan.
Werner Enterprises (NASDAQ: WERN) Raised to Buy at KeyBanc.

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JON C. OGG

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Filed under: Analyst Calls Tagged: AIXG, BK, COCO, EMC, GILD, LCC, MIR, MUR, NBG, NTAP, PNC, RRI, WERN

Top Analyst Upgrades and Downgrades (BIDU, CPN, ID, M, MIR, OMCL, PLD, RFMD, RRI, SLXP, TWX, VRTX)

247wallst — Mon, 01 Feb 2010 13:23:19 +0000

These are Monday’s top analyst upgrades, downgrades, and initiations seen in Wall Street research calls:

Baidu, Inc. (NASDAQ: BIDU) Raised to Neutral at Credit Suisse.
Calpine Corp. (NYSE: CPN) Raised to Equal Weight at Barclays.
L-1 Identity Solutions (NYSE: ID) Cut to Underweight at JPMorgan.
Macy’s Inc. (NYSE: M) Cut to Hold at Deutsche Bank.
Mirant Corporation (NYSE: MIR) Cut to Underweight at Barclays.
Omnicall Inc. (NASDAQ: OMCL) Raised to Buy at ThinkEquity.
ProLogis (NYSE: PLD) Raised to Neutral at UBS.
RF Micro Devices (NASDAQ: RFMD) Started as Buy at Merriman Curhan Ford.
RRI Energy, Inc. (NYSE: RRI) Cut to Equal Weight at Barclays.
Salix Pharmaceuticals (NASDAQ: SLXP) Started as Buy at Jefferies.
Time Warner Inc. (NYSE: TWX) Raised to Buy at Benchmark.
Vertex Pharmaceuticals (NASDAQ: VRTX) Raised to Outperform at Oppenheimer.

You are invited to join our free daily email distribution list to hear about top analyst upgrades and downgrades, IPOs and secondary offerings, ongoing day trader and options trader alerts, stock and market rumors, Buffett and guru investor news, M&A and more.

JON C. OGG
FEBRUARY 1, 2010

Filed under: Analyst Calls Tagged: BIDU, CPN, ID, M, MIR, OMCL, PLD, RFMD, RRI, SLXP, TWX, VRTX

New Name Doesn’t Help (RRI, NRG)

247wallst — Mon, 11 May 2009 13:06:38 +0000

What’s left of Reliant Energy is now called RRI Energy, Inc. (NYSE:RRI) following the sale of Reliant’s Texas retail segment to NRG Energy, Inc. (NYSE:NRG) that was completed on May 1st. The company reported a net EPS loss of -$0.43, compared with an EPS profit of $1.07 in the same period a year ago. Reported revenue reached $466.2 million, compared with $879.8 million a year ago.

RRI’s report for the first quarter of 2009 excludes the Texas retail segment, which the company included in discontinued operations. Still, the discontinued operations accounted for -$0.13 of the net EPS loss.

Now that RRI has shed its retail operations, it plans to operate as a merchant power generator, but it still has to contend with what the company’s president and CEO called “managing the risks associated with the current market economy and addressing long term industry challenges.” Wholesaling power does reduce risk somewhat, but long-term challenges, including likely CO2 emissions costs, could hit wholesale generators hard.

RRI is off 2.75% in pre-market trading this morning, at $5.30. The company’s 52-week range is $2.03-$26.27.

Paul Ausick
May 11, 2009

Posted in Utilities Tagged: NRG, RRI

NRG Wins In Reliant Deal (NRG, RRI, EXC)

247wallst — Fri, 01 May 2009 12:37:28 +0000

NRG Energy Inc. (NYSE:NRG) has completed its $287.5 million cash acquisition of Texas retail business of Reliant Energy Inc. (NYSE:RRI). This could have an impact on the ongoing battle over a proposed deal involving Exelon Corp. (NYSE:EXC).

NRG expects the deal to be “immediately accretive to EBITDA and free cash flow, and fully accretive in 2010.” In addition to the cash purchase price, NRG “will remit net working capital” to Reliant for the next six months.

It remains to be seen how this acquisition will affect the hostile offer by Exelon Corp. (NYSE:EXC) for NRG. NRG has been holding out for a better offer, and the addition of Reliant’s Texas business could make a change in the valuation. NRG has said that it expects the acquisition to contribute $150-$200 million to annual EBITDA. If Exelon still wants to play, the stakes have probably gone up.

Paul Ausick
May 1, 2009

Posted in Mergers and Buy Outs, Utilities Tagged: EXC, NRG, RRI

Power Generation Results Mixed (D, XEL, NRG, EXC, RRI)

247wallst — Thu, 30 Apr 2009 12:48:35 +0000

Three large electric utilities reported earnings this morning, and the results are could be better, but they could also be worse. Dominion Resources, Inc. (NYSE:D) and NRG Energy, Inc. (NYSE:NRG) were up following their reports.

The largest of the three, Dominion reported GAAP EPS of $0.42 on revenue of $4.778 billion. Operating earnings, which excludes a $272 million impairment charge on Dominion’s oil and gas properties, came in at $0.97/share. Analysts were expecting EPS of $0.88 on revenue of $4.12 billion.

NRG Energy, Inc. (NYSE:NRG) reported EPS of $0.70, beating estimates of $0.45 handily. Revenue of $1.658 billion also beat estimates of $1.16 billion. The company noted that it had spent $5 million fighting off the takeover bid from Exelon Corp. (NYSE:EXC), and $12 million on its pending acquisition of the Texas retail business of Reliant Energy Inc. (NYSE:RRI). Excluding mark-to-market gains of $271 million, NRG’s EBITDA was $477 million for the first quarter of 2009, compared with EBITDA of $525 in the same quarter last year.

Xcel Energy Inc. (NYSE:XEL) reported GAAP EPS of $0.38 on revenues of $2.7 billion. Analysts had been expecting EPS of $0.37 on revenues of $3.09 billion. The company’s electric margins improved from $885 million in the first quarter of 2008 to $962 million for the first quarter of 2009, primarily on the basis of lower purchased fuel and power costs. Retail rate increases contributed $45 million of the $77 million difference.

Dominion provided guidance of EPS of $0.61-$0.66 for the 2009 second quarter. Analysts had been estimating EPS of $0.59 for the second quarter.

NRG guided EBITDA for fiscal year 2009 to $2.175 billion, lower than analysts’ average estimates of $2.39 billion. The company noted “the very weak market” in the last portion of the first quarter.

Xcel reaffirmed previous EPS guidance of $1.45-$1.55 for the full fiscal year. Analysts are expecting EPS of $1.51.

Dominion shares are trading up about 2% in pre-market trading this morning. NRG shares are up nearly 5%, and Xcel is unchanged.

Paul Ausick
April 30, 2009

Posted in Earnings, Utilities Tagged: EXC, NRG, RRI, XEL

NRG is the Company of ‘No’ (NRG, EXC, RRI)

247wallst — Fri, 03 Apr 2009 13:17:13 +0000

NRG Energy Inc. (NYSE:NRG) has sent a long letter to shareholders counseling them not to vote for the new slate of directors being proposed by Exelon Corporation (NYSE:EXC). NRG notes that the price of Exelon’s fixed exchange ratio offer has dropped 17% since Exelon first announced its proposal to acquire NRG. The company is still pounding the point that Exelon’s offer is “inadequate and unacceptable.” NRG also points out that its proposed acquisition of Reliant Energy Inc.’s (NYSE:RRI) retail business will result in the addition of $150-$200 million in annual EBITDA for NRG shareholders beginning immediately.
There may be some who believe that Exelon’s acquisition could kill NRG’s acquisition of the Reliant business unit. But where this ‘belief’ comes into play versus reality is that the business unit transaction is expected to close before any time that Exelon and NRG are expected to come to any formal vote or formal meeting.

NRG’s overall point is that it is the stronger company, with better free cash flow, solid liquidity, and better prospects going forward in both solar and nuclear power generation. That may all be true, but Exelon’s market cap is nearly seven times bigger than NRG’s, and big utilities usually enjoy cost and credit advantages.

Exelon has obtained an indication of a majority of shares in a tender offer that has been extended to June 26th, although what those formal numbers are may end up being very different depending upon a variety of factors and terms. NRG still has not announced a date for its 2009 annual meeting, but logic would dictate that should come shortly now that it has mailed its own proxy card.

Both companies are trading above their 50-day moving averages and up more than 20% from 52-week lows. However, Exelon shares trade about 49% lower than 52-week highs and NRG shares are off nearly 60% from 52-week highs.

Paul Ausick
April 3, 2009

Posted in Mergers and Buy Outs, Utilities Tagged: EXC, NRG, RRI

NRG-Reliant, When A Deal Looks Done (NRG, RRI, EXC)

247wallst — Wed, 01 Apr 2009 14:47:00 +0000

The US Department of Justice and the Federal Trade Commission have granted NRG Energy, Inc. (NYSE:NRG) early termination of the Hart-Scott-Rodino Act waiting period related to NRG’s proposed acquisition of the Texas retail business of Reliant Energy Inc. (NYSE:RRI). NRG expects to close the $287.5 million deal during the second quarter of 2009. That is, NRG expects to close the deal unless Exelon Corp. (NYSE:EXC) trumps it by acquiring NRG. Shares in all three companies are down marginally this morning.

Paul Ausick
April 1, 2009

Posted in Mergers and Buy Outs, Utilities Tagged: EXC, NRG, RRI

NRG Throws Debt Scare at Exelon (NRG, EXC, RRI)

247wallst — Fri, 27 Mar 2009 14:26:44 +0000

NRG Energy, Inc. (NYSE:NRG) has sent a letter to Exelon Corporation (NYSE:EXC) calling on Exelon to withdraw is proposal to expand NRG’s board and to “pack” the board with Exelon picks at the next NRG annual meeting.

According to NRG, approving Exelon’s proposed changes “could trigger an acceleration of NRG’s approximately $8 billion of outstanding corporate-level debt which could have serious negative consequences for NRG and all of its stockholders.” NRG goes on to say that refinancing that much debt would be “prohibitively expensive” or “impossible.”

In a response to NRG, Exelon calls the NRG letter a “misstatement” of NRG’s debt instruments, then proceeds to school NRG on what NRG’s own debt requires. Ouch. Basically, Exelon denies that its takeover is a change of control in NRG, and would thus not trigger all the negative effects NRG outlined. NRG still hasn’t set a date for its 2009 annual meeting.

Both NRG and Exelon shares were down slightly in early trading today along with the broad market. Reliant Energy Inc. (NYSE: RRI) is down 6% this morning at $3.30, although that tie to this may not be the direct reasoning.

Paul Ausick
March 27, 2009

Posted in Mergers and Buy Outs, Utilities Tagged: EXC, NRG, RRI

Exelon Fires Another Round (EXC, NRG, RRI)

247wallst — Wed, 18 Mar 2009 14:12:48 +0000

Exelon Corporation (NYSE: EXC) has filed its preliminary proxy statement for the 2009 annual meeting of NRG Energy, Inc. (NYSE: NRG). NRG still hasn’t scheduled the meeting, but Delaware law requires that the meeting be scheduled within 13 months of NRG’s last annual meeting, which was held on June 14, 2008.

Just to review: Exelon made an offer of $6.2 billion for NRG in October 2008. NRG twice rejected the offer as too low. Exelon went straight to shareholders, and received tenders for 51% of NRG shares in February. NRG offered to buy the retail business of Reliant Energy Inc. (NYSE:RRI) for $287.5 million earlier this month.

In the proxy filing, Exelon proposed a slate of candidates for the four open director seats on NRG’s board, an expansion of NRG’s board from 12 to 19 members, nominees for five of the seven new board seats, and repeal of bylaws adopted by NRG after February 26, 2009, without shareholder approval. So far, NRG has not issued any response.

Exelon is offering NRG shareholders a financially sound new owner and solid, stable cash flow. For its part, NRG management is offering shareholders a retail business in Texas that posted a negative cash flow in the fourth quarter of 2008. Which looks like a better deal?

Paul Ausick
March 18, 2009

Posted in Mergers and Buy Outs, Utilities Tagged: EXC, NRG, RRI

NRG-Exelon-Reliant: Merger Soap Opera Continues (NRG, EXC, RRI)

247wallst — Fri, 13 Mar 2009 13:43:01 +0000

The CEO and Chairman of NRG Energy, Inc. (NYSE:NRG) have sent a letter to stockholders pointing out the weaknesses in the buyout offer from Exelon Corporation (NYSE:EXC). Earlier this month, Exelon announced that it received tenders for 51% of NRG shares. NRG countered with an offer to buy the retail business of Reliant Energy Inc. (NYSE:RRI).

NRG challenges Exelon’s arithmetic. When the buyout was first offered, on October 17th, Exelon shares traded at $54.50 and NRG shares traded at $19.33. Exelon offered to exchange 0.485 shares of its stock for each share of NRG. The total deal was worth about $6.2 billion. Exelon’s fixed 0.485 exchange rate means that at today’s share price the deal is worth only $20.07/share to NRG shareholders, or about $4.74 billion total.

NRG’s letter goes on to point out Exelon’s recent revelations about its “dramatically lower” hedging levels and expected “decline” in 2011 cash flow, both of which have led to downgrades from analysts.

But it could be too late. NRG has still not scheduled its annual shareholder meeting, probably because it doesn’t want to find out for sure just what cards Exelon is holding. For its part, Exelon has said that it is proceeding with obtaining regulatory approvals and seeking proxies to elect NRG directors at the next annual meeting. Whenever that happens.

Both NRG and Exelon have opened higher this morning.

Paul Ausick
March 13, 2009

Posted in Mergers and Buy Outs, Utilities Tagged: EXC, NRG, RRI