The Top 5 Analyst Calls of the Week (GE, JASO, MRO, NANO, AMAT, KLAC, NVLS)

This week’s “Top 5 Analyst Calls of the Week” feature is back to normal as analysts tweak their price targets and estimates for the next quarter and out to two years in many selected names.  We track upgrades and downgrades every morning, but at the end of the week there is a realization that some analyst research calls really stand out from the pack or they had a huge impact on the stock.  This week we tracked the “Top 5 Analyst Calls of the Week” in issues around General Electric Co. (NYSE: GE), JA Solar Holdings Co., Ltd. (NASDAQ: JASO), Marathon Oil Corporation (NYSE: MRO), and Nanometrics Incorporated (NASDAQ: NANO) as four individual issues; and then we broke out several calls in semiconductor cap-ex as the fifth call that all drove Applied Materials, Inc. (NASDAQ: AMAT), KLA-Tencor Corporation (NASDAQ: KLAC), and Novellus Systems, Inc. (NASDAQ: NVLS) higher.

General Electric Co. (NYSE: GE) has been a Wall Street favorite of late. This week brought a different call with a Bernstein downgrade to ‘Market Perform’ from ‘Outperform’ and its target is $20.00.  The downgrade actually had no impact on the stock as shares rose from $18.43 a week ago to $18.82 to close out this week.  GE remains our top conglomerate pick for 2011.

JA Solar Holdings Co., Ltd. (NASDAQ: JASO) is seeing its prospects dim and the stock had an awful Friday.  Stifel Nicolaus downgraded an already-cautious Hold rating down to a “sell” rating.  Earlier in the week came an upgrade by Auriga to Buy from Hold.  The week would have been a good one for JA Solar had that downgrade on Friday not taken it down by 6.5% to $7.17 after having eclipsed $8.00 on one day of the week.  A sell rating in solar is just not very reassuring when you add it in with our own observations when we tried to pick the solar winner for 2011.

Marathon Oil Corporation (NYSE: MRO) was having a good week because its plan to split itself into two units to unlock shareholder value was viewed as a win. Its E&P will be broken away from refining.  Shares rose from $40.53 to as high as $44.90 for a new 52-week high before closing on Thursday at $42.98 on more than 40 million shares.  Shares had only been at $38.63 the Friday before and its new 52-week range is $27.64 to $44.90.  If this is such good news, we could not help but observe how J.P.Morgan cut its rating to Neutral from Overweight in the call on valuation.  Fitch then chimed in as well saying that BBB+ rating was now under “Rating Watch Negative” due to many uncertainties about the new structure despite that its current liquidity was called robust by Fitch.

Nanometrics Incorporated (NASDAQ: NANO) rose a massive 28.7% to $17.32 on Friday alone after a research note from Piper Jaffray called for a super-cycle spending boost coming to the sector and with Nanometrics being a key winner.  Stifel Nicolaus also spoke positively on the sector.  The move was on more than ten-times normal trading volume of more than 5.7 million shares and its new trading range is $6.60 to $17.96.  The developer of high-performance process control meteorology systems had one great run from the research call’s implications.  This is a small cap name and still trades at close to 10-times expected earnings.

Elsewhere in chip equipment and cap-ex players came a great week and there were a few standout calls that culminated with each other.  The Intel earnings report offered much support for further cap-ex expansion, and we saw key drivers in a tie between Stifel Nicolaus and Bank of America Merrill Lynch.  Even Stifel Nicolaus was out with positive chip equipment and cap-ex calls after Intel’s earnings report.  We saw key sector upgrades and three of the standouts were as follows:

• Applied Materials, Inc. (NASDAQ: AMAT) was up 7.55% at $15.32 on Friday versus a $13.96 close the week before for nearly a 10% gain.
• KLA-Tencor Corporation (NASDAQ: KLAC) rose 5.95% to $42.11 versus a $37.69 close the week before for a weekly gain of more than 10%.
• Novellus Systems, Inc. (NASDAQ: NVLS) really saw gains from the calls as shares rose 12.3% to $36.85 Friday versus a $30.87 a week earlier for a weekly gain that was approaching 20%.

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JON C. OGG