Caterpillar, Inc. (NYSE: CAT) Raised to Outperform as Bull of the Day at Zacks.
Halliburton Co. (NYSE: HAL) Reiterated Buy but lowered target to $54 at Argus.
Harmony Gold Mining Co. Ltd. (NYSE: HMY) Raised to Buy at UBS.
Home Depot Inc. (NYSE: HD) Reiterated Buy and raised price target to $51 at Argus.
Interline Brands, Inc. (NYSE: IBI) named as Value stock of the day at Zacks.
KLA-Tencor Corporation (NASDAQ: KLAC) Raised to Buy at Citigroup.
Michael Kors Holdings Limited (NYSE: KORS) Started as Overweight at Morgan Stanley; Started as Outperform at Baird; Started as Buy at Goldman Sachs.
Netflix, Inc. (NASDAQ: NFLX) Maintained Outperform with $100 target at Credit Suisse.
NII Holdings, Inc. (NASDAQ: NIHD) Cut to Underperform as Bear of the Day at Zacks.
Novellus Systems, Inc. (NASDAQ: NVLS) Raised to Buy at Citigroup.
Pan American Silver Corp. (NASDAQ: PAAS) maintained Outperform but lowered estimates at Credit Suisse.
Texas Instruments Inc. (NYSE: TXN) Reiterated Outperform and raised target to $40 at Credit Suisse; Cut to Hold at Kaufman Bros.
Union Pacific Corp. (NYSE: UNP) Reiterated Buy and raised target to $130 at Argus.
Zumiez Inc. (NASDAQ: ZUMZ) Cut to Neutral at Credit Suisse.

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JON C. OGG

Finance Ministers Say No

The other major development in Europe was that EU finance ministers rejected a settlement between Greece and private investors in its sovereign paper. That makes a default slightly more likely. Private investors are represented by the Institute of International Finance. The body had set a deal that would drop the value of the Greek bonds they hold by a nominal 50%. Actually, the number is closer to 70% when changes in yield and term are taken into account. In exchange for their sacrifice, these investors want a coupon of 4% or slightly better on new paper. Finance ministers for the region claim Greece cannot sustain that level of payout, and they will only accept one closer to 3%.

Texas Instruments Earnings

One of the world’s most important tech companies, Texas Instruments (NYSE: TXN), announced earnings. The results showed that the industry may have begun a broad rebound. The firm makes an extremely broad array of chips for smartphones and consumer electronics devices. The report caused shares in the company to rise. CEO Rich Templeton said, “Revenue in the fourth quarter was higher than expected across all our major product lines, reinforcing our belief that we’re at the bottom of this downturn. I’m pleased to say that despite the downturn and the lower factory utilization that came with it, cash flow from operations was strong and well above levels as compared with similar points in prior downturn.” TI’s chips are not only broadly used, based on devices that run them. The firm also has huge operations overseas. The company issued an optimistic forecast as well.

YouTube Views

It may not count for much financially, but users of Google’s (NASDAQ: GOOG) video site YouTube now generate four billion views a day. The number is higher by 25% in just eight months. Google has not shown that YouTube is a major contributor to revenue or profit. That disappoints investors who hope to see the company diversify its revenue well beyond search advertising. YouTube has set up “premium channels” for visitors who want to watch content like music videos. It also has set a new video rental service with some of the largest media companies. The site remains, however, largely a collection of poor quality, user-created, amateur video clips.

Douglas A. McIntyre

Macy’s (NYSE: M) sues Martha Stewart Omnimedia (NYSE: MSO) over a deal the media company did with JCPenney (NYSE: JCP) that may have broken an exclusivity agreement. (Reuters)

India’s central bank shifts it emphasis from inflation to growth. (Reuters)

Texas Instruments (NYSE: TXN) reports its chip demand has risen, but it will shutter two factories. (Reuters)

International Monetary Fund leader Largarde warns that the eurozone must promote growth in addition to austerity. (WSJ)

The European Union agrees to begin to embargo Iran oil. (WSJ)

The Organisation for Economic Co-operation and Development says in its “Going for Growth” report that nations should cut tax benefits for mortgages. (WSJ)

Dice Holdings (NYSE: DHX) reports that Silicon Valley engineer pay moved beyond an average of $100,000. (WSJ)

AT&T (NYSE: T) sets plans to give T-Mobile $1 billion in spectrum as part of a deal breakup pact. (WSJ)

A second bailout of Portugal is likely. (WSJ)

AMR, parent of American Airlines, tells employees that vested benefits will not be undermined if pension programs are ended. (WSJ)

Falling demand for coal will undermine industry profits. (WSJ)

Lee Enterprises will leave Chapter 11 with much of its long-term debt deferred. (WSJ)

Federal and state authorities are close to a deal with banks over mortgage violations that could total $25 billion. (WSJ)

The Energy Information Administration expects oil prices to reach an average of $146 by 2035. (WSJ)

A mortgage deal between banks and the government could cut one million mortgages by about $20,000 each. (NYT)

Eurozone finance ministers are closer to an arrangement to create a permanent bailout fund. (NYT)

Germany may back a permanent bailout fund for the eurozone in exchange from more stringent budget rules. (FT)

NYSE Euronext (NYSE: NYX) and Deutsche Boerse may be unable to block an European Commission veto of their merger. (Bloomberg)

S&P cuts Societe Generale’s ratings. (Bloomberg)

Douglas A. McIntyre

InterDigital Inc. (NASDAQ: IDCC) was down 3.3% today as is, but now the company is getting slashed and burned on news of what many had considered an obvious coming outcome.  The company ended its strategic review process and it did not find a buyer for its deep patent collection.  Now it is going to proceed on its own licensing or selling patents.  Shares are down over 16% at $37.10 in the after-hours against a 52-week range of $34.61 to $82.50.
 
NVIDIA Corporation (NASDAQ: NVDA) was down 3% after the Texas Instruments earnings but now shares are down “only” about 0.6% after closing up 2.7% on the day.

Polycom Inc. (NASDAQ: PLCM) has a history of big hits and bad misses, but tonight’s reaction has shares on the up and up.  After beating earnings handily, Polycom shares are up 9.6% at $20.29 and that is after closing up almost 4% today. 

Texas Instruments Inc. (NYSE: TXN) was down initially due to headlines showing GAAP earnings above estimates but the chip giant is now up over 3% ay $34.25 in the after-hours session against a 52-week range of $24.34 to $36.71.

VMware Inc. (NYSE: VMW) closed down 2.4% at $86.00 today but shares are up 5% at $90.50 on almost 1 million shares after just over an hour after the 4PM closing bell.  The virtualization leader said sales rose 27% to $1.06 billion and it sees revenues of $1.015 billion to $1.04 billion for the first quarter of 2012.  These are being taken as above plan.  The news has the (former) parent company of EMC Corporation (NYSE: EMC) up about 1.8% at $23.87 on over 2 million after-hours shares.

Western Digital Corporation (NYSE: WDC) may have seen earnings drop almost 36%, but the update is proving to be above plan and it claims to be making much more progress in Thai floods.  Shares closed up marginally today and the after-hours reaction has shares up 4.4% at $36.25 versus a 52-week range of $22.64 to $41.87.

Zions Bancorporation (NASDAQ: ZION) posted earnings light at $0.30 versus estimates of $0.33.  Its book value per common shares grew to $25.02 from $24.78 one quarter earlier and shares are down 3% at $17.98 in the after-hours.

JON C. OGG

The company offered preliminary quarterly guidance of $0.16 to $0.24 EPS  $3.02 to $3.28 billion, but that earnings figure includes charges as well of at least $0.10.  Thomson Reuters has estimates of $0.41 EPS and $3.22 billion in revenues.

Here is a quote calling the bottom of the downturn: “”Revenue in the fourth quarter was higher than expected across all our major product lines, reinforcing our belief that we’re at the bottom of this downturn.  I’m pleased to say that despite the downturn and the lower factory utilization that came with it, cash flow from operations was strong and well above levels as compared with similar points in prior downturns.

Shares bounced up with the rest of the sector last week.  Shares closed down 1.3% at $33.19 today on about 30% above-normal trading volume  and its 52-week trading range is $24.34 to $36.71.  The stock initially fell by more than this because the headline earnings looked light for machines which trade shares based solely on headlines.  The stock is actually down only about $0.04  at $33.15 in the after-hours session.

JON C. OGG

We’ve looked 10 semiconductor companies and evaluated their chances of reaching existing price targets during the coming year. The companies are Intel Corp. (NASDAQ: INTC), Advanced Micro Devices Inc. (NYSE: AMD), Micron Technology Inc. (NASDAQ: MU), Broadcom Corp. (NASDAQ: BRCM), Qualcomm Corp. (NASDAQ: QCOM), ARM Holdings plc (NASDAQ: ARMH), SanDisk Corp. (NASDAQ: SNDK), Altera Corp. (NASDAQ: ALTR), Applied Materials Inc. (NASDAQ: AMAT), and Texas Instruments Inc. (NYSE: TXN). Data comes from Yahoo! Finance and MarketWatch.

Intel Corp. (NASDAQ: INTC) has a consensus price target of $27 and current price around $26.83, for a potential upside of about 1%. Intel reported stellar earnings last week and the stock posted a new 52-week high earlier this morning. Sales of PCs have not been as weak as feared, and margins have remained high. The new Ultrabooks, which the company is supporting with a very strong marketing budget, could really push the company substantially higher. As of this moment though, shares are fully valued.

Advanced Micro Devices Inc. (NYSE: AMD) has a consensus price target of $6.00 and a current price around $6.55, leaving no upside. The company reports earnings tomorrow and is expected to post EPS of $0.16 on revenue of $1.72 billion. The company’s shares have jumped by about a dollar in the past month, and continued improvement, especially in the server market, should push the target price higher.

Micron Technology Inc. (NASDAQ: MU) has a consensus price target of $8.75 and a current price around $8.00, for a potential upside of 9%. Last month the company’s price target was $8/share and the shares were trading at around $6.25. How much more steam can be left in Micron after that?

Broadcom Corp. (NASDAQ: BRCM) has a consensus price target of $41 and a current price around $34.92, for a potential upside of 17%. Broadcom shares have risen by more than $5/share in the last month, but unlike Micron, there’s still a lot of headroom.

Qualcomm Inc. (NASDAQ: QCOM) has a median price target of $67 and a current price around $58.60, for a potential upside of 14%. Qualcomm shares have gained more than 7% in the first three weeks of the year and the share price is up more than $4. The company has a firm position in the mobile device market and the company should continue to post growth in 2012.

ARM Holdings plc (NASDAQ: ARMH) has a consensus price target of $33.75 and a current price around $27.75, for a potential upside of more than 22%. ARM’s target price has jumped by nearly $7/share in the past month, but it is trading at nearly the same price as a month ago. Shares gained nearly 35% in the past year, but royalty payments are falling. For the year-to-date, shares are slightly down. To hit its new target, ARM has to get going.

SanDisk Corp. (NASDAQ: SNDK) has a consensus price target of $59.50 and a current price around $51.87, for a potential upside of 14.7%. SanDisk’s shares are up about 5.5% so far this year after a nearly flat 2011. Apple’s recent acquisition of of a NAND maker could sharply curtail SanDisk’s sales of the chips for iPhones and iPads.

Altera Corp. (NASDAQ: ALTR) has a consensus price target of $43 and a current price around $39.90, for a potential upside of 7.8%. Altera’s price target has been raised in the past month, and the company’s share price is also higher. Shares have risen more than 7% year-to-date, and the company is expected to report EPS of $0.42 and revenue of $447.52 million tomorrow.

Applied Materials Inc. (NASDAQ: AMAT) has a median price target of $13 and a current price around $12.29, for a potential upside of 5.8%. AMAT’s shares have jumped more than 15% since the beginning of January, and the price target has not changed. There’s not a lot to like here as far as expected upside goes.

Texas Instruments Inc. (NYSE: TXN) has a consensus target price of $34 and a current price around $33.42, for a potential upside of less than 2%. TI is expected to report EPS of $0.39 and revenue of $3.25 billion after the market closes today. The company lowered estimates in December, and there’s a decent chance TI will beat those lowered expectations. If so, a new target nearer the company’s 52-week high of $36.71 would be in order. That could raise upside potential to around 12%.

In the last month, Intel has essentially hit its target price, and because the target hasn’t been raised, there could be some question among analysts about the staying power of the recent rise. Broadcom and Qualcomm offer the best bets to post share price gains, and the targets for both are well within reach.

Paul Ausick

BlackRock Inc. (NYSE: BLK) Cut to Neutral at Citigroup.
EMC Corporation (NYSE: EMC) Reiterated Outperform at Credit Suisse.
Google Inc. (NASDAQ: GOOG) Maintained Buy but cut target to $700 at Canaccord Genuity.
Humana Inc. (NYSE: HUM) Cut to Market Perform at Wells Fargo.
ICICI Bank Ltd. (NYSE: IBN) Cut to Underperform and named Bear of the Day at Zacks.
Intel Corporation (NASDAQ: INTC) Cut to Hold at Kaufman; Reiterated Outperform and raised target to $35 at Credit Suisse; Maintained Hold with $24 target at Canaccord Genuity.
JDS Uniphase Corporation (NASDAQ: JDSU) Raised to Buy at Stifel Nicolaus.
Johnson Controls Inc. (NYSE: JCI) Cut to Neutral at JPMorgan.
NCI. Inc. (NASDAQ: NCIT) Cut to Underperform at Wells Fargo.
Tsakos Energy Navigation Ltd. Co. (NYSE: TNP) Raised to Outperform at Credit Suisse.
Texas Instruments Inc. (NASDAQ: TXN) Cut to Hold at Needham.
Tractor Supply Co. (NASDAQ: TSCO) Reiterated Buy and raised target to $92 at Argus.
Valero Energy Corporation (NYSE: VLO) Reiterated Buy with $35 price target at Argus.
Western Union Co. (NYSE: WU) Reiterated Outperform as Bull of the Day at Zacks.

Carnival Corporation (NYSE: CCL) and Royal Caribbean Cruises Ltd. (NYSE: RCL) lowered targets and estimates by Credit Suisse.

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JON C. OGG

Now we have further news coming from Xilinx, Inc. (NASDAQ: XLNX) that is adding to gains.  After shares were already up almost 6% at $35.30 on Wednesday, the stock is up almost 7% in the after-hours session at $37.85 and that will mark a new 52-week high if it holds up.   The company noted that while revenues fell 10% to $511.1 million on earnings of $0.47, the consensus target was only $498.3 million and $0.37 EPS.  Xilinx is offering guidance of 2% to 6% revenue growth.

There are some other secondary plays out there on this.  When investors trade up in Xilinx, they often trade up Altera Corporation (NASDAQ: ALTR).  When investors trade up in Linear Tech, they often trade up in Maxim Integrated Products, Inc. (NASDAQ: MXIM) as well.  All are higher in the after-hours session and Altera was up almost 10% at $40.72 and Maxim rose by 6.1% today to $27.56.

Get ready for Intel to report earnings on Thursday after the close (estimates are $0.61 EPS on $13.72 billion in sales).  If it reverses or lightens up on the severity of its revenue guidance offered in December, then going from $25.39 to above $25.92 would not hard to fathom.  Anything above that would mark a 52-week high and analysts have a consensus price target objective of $26.58.

It is important to keep in mind that in many cases these “higher guidance” calls are barely higher and it is off of declining sales.  Still, in the end investors want improvements and growth and sometimes mediocrity wins the day.  If these all hit new 52-week highs, the cheer will be simple enough: “Chips Ahoy!”

JON C. OGG

We’ve looked 10 semiconductor companies and evaluated their chances of reaching existing price targets during the coming year. The companies are Intel Corp. (NASDAQ: INTC), Advanced Micro Devices Inc. (NYSE: AMD), Micron Technology Inc. (NASDAQ: MU), Broadcom Corp. (NASDAQ: BRCM), Qualcomm Corp. (NASDAQ: QCOM), ARM Holdings plc (NASDAQ: ARMH), SanDisk Corp. (NASDAQ: SNDK), Altera Corp. (NASDAQ: ALTR), Applied Materials Inc. (NASDAQ: AMAT), and Texas Instruments Inc. (NYSE: TXN). Data comes from Yahoo! Finance and MarketWatch.

Intel Corp. (NASDAQ: INTC) has a consensus price target of $27 and current price around $24.47, for a potential upside of 10.3%. Intel has put a lot of marketing muscle behind its Ultrabook design, with more models to come from more manufacturers in 2012. A new version of the Windows operating system is also due in late summer that should help with Ultrabook sales. Intel still hasn’t come up with a strategy to attack the mobile device market, and while that won’t be fatal, it could weigh on revenue and profits next year unless the Ultrabook is a blowout success.

Advanced Micro Devices Inc. (NYSE: AMD) has a consensus price target of $6.20 and a current price around $5.36, for a potential upside of 15.7%. AMD’s share price fell more than -33% in the past 12 months. The company introduced a new high-speed graphics chip recently that has been well-received. AMD’s server market share is wobbly though, although it has made progress in notebooks. But expecting a gain of more than 15% seems like wishful thinking.

Micron Technology Inc. (NASDAQ: MU) has a consensus price target of $8 and a current price around $6.24, for a potential upside of 28.2%. Micron’s shares jumped last week on a weak earnings report primarily on the basis of more expected consolidation in the DRAM market. Pricing has been weak for DRAM chips, but Micron is in a better position than most competitors to be among the survivors. Still, a lot of things need to go right for the company to hit its price target.

Broadcom Corp. (NASDAQ: BRCM) has a consensus price target of $41 and a current price around $29.53, for a potential upside of 38.8%. Broadcom has posted strong revenue and profit growth in 2011, but its share price has fallen by about -32%. Revenue and profit are both expected to continue growing in 2012, and the company is not a bad bet to hit its current price target.

The companies are complementary, each specializing in a different bit of the chip equipment making business. Some chip makers, notably Intel Corp. (NASDAQ: INTC) and Texas Instruments Inc. (NYSE: TXN) have lowered guidance for 2012, and sales estimates for the chip industry are nearly -20% lower next year. A single company offering a wider range of equipment has a better chance of surviving than do two smaller, more specialized firms.

Lam has also said that it will begin buying back up to $1.6 billion in stock following the close of the transaction, which is expected to happen in the second quarter of 2012. Lam expects the buyback program to be completed within 12 months.

The cleverly structured deal is tax-free to shareholders and the buyback program means that Lam is paying about 48% of the acquisition price in cash. When the deal closes, Lam shareholders will own about 59% of the new company and Novellus shareholders will own about 41%. The surviving company will retain the Lam name.