Each morning we cover about 15 to 20 analyst upgrades and downgrades which we think will have an impact on the underlying stocks. After each week we review those research calls and other research calls to see which ones really stood out or which ones had the most impact on each issue. Suddenly, we end up with the top analyst calls of the week.
This week there were far more and we actually have ten top analyst calls of the week because the calls were so varied. The Top Ten Analyst Calls of the Week were in shares of American International Group, Inc. (NYSE: AIG), Cabot Oil & Gas (NYSE: COG), Capstone Turbine Corporation (NASDAQ: CPST), CBOE Holdings, Inc. (NASDAQ: CBOE), Citrix Systems, Inc. (NASDAQ: CTXS), JDS Uniphase Corporation (NASDAQ: JDSU), MakeMyTrip Limited (NASDAQ: MMYT), RadioShack Corp. (NYSE: RSH), Sprint Nextel Corp. (NYSE: S), and in Wynn Resorts Ltd. (NASDAQ: WYNN).
On each call we have given the basics, but we have also added in some detail and then added color if applicable. This week also has a real mix between the equivalent of “Buy” or “Sell” when it comes to a bias. It was amazing how many important research calls came out this week considering that there were hardly any earnings reports that would send analysts into a frenzy.
American International Group, Inc. (NYSE: AIG) was very important this week. Now that the secondary offering has been completed, many analysts in that huge underwriting group have initiated coverage. If you just look at the share price performance, AIG is now higher than the day it closed on its secondary offering went out. That was $28.28 on the close that day and shares are at $28.96 now at a time that the broad DJIA market and financials were lower. The summary ratings seen this week were as follows:
- Bank of America Merrill Lynch started it with Buy rating;
- Barclays started it with a Equal-Weight rating and a $31 target;
- Deutsche Bank started it with a Buy rating and $34 target;
- Goldman Sachs started it as Neutral with a $31 target;
- UBS maintained Neutral, lowered target to $30.
Cabot Oil & Gas (NYSE: COG) saw a huge pop when its shares were raised to Raised to Buy from Hold at Canaccord Genuity this week. Analyst John Gerdes raised his target price from $58 to $85, or 47%, and noted that it clarified the coming Marcellus infrastructure buildout and believes Cabot should add another 200 million cubic feet per day of take away capacity by late this year with a another 450 million cubic feet per day by late next year. Shares went from $55.91 to a high of $60.64 that day and a close of $58.31 on that call. The gain at one point had shares up almost 8.5% and generated a close of up 4.3% on this. That is a very large move for an established energy company worth about $6 billion in market cap.
Capstone Turbine Corporation (NASDAQ: CPST) is coming up with earnings this week and it makes turbine generator sets for use in stationary distributed power generation systems. It is one cult stock that we used to call “less dirty” energy in the green energy boom and it does have a cult following. What we could not get over was how FBR Capital Markets initiated a rating of “Outperform” and gave a $2.75 price target objective this last week. This company loses money and can be volatile after earnings. We wonder if the team at FBR stumbled upon something other than the Russian order that was announced. Their target price is $2.75 and shares rose more than 2% to $1.65 on the call (closed there Friday too). What FBR is saying is that it sees some 66% of upside remaining in the stock and that is assuming the event risk of the earnings.
CBOE Holdings, Inc. (NASDAQ: CBOE) was an interesting call from Goldman Sachs this last week. Exchanges are supposed to be consolidating and this one leads its field by far. So why did the team at Goldman Sachs cut the rating from an already-cautious “Neutral” down to “SELL” this week? Maybe it was the lock-up period expiration. Shares lost more than 2% on the call but quickly recovered to end the week at $24.26 versus a post-IPO range of $19.60 to $34.18.