24/7 Wall St. Top 10 Analyst Calls of the Week (ALU, AWK, AAPL, ARBA, CTL, GOOG, GOV, HFC, LRCX, WSM)

Google Inc. (NASDAQ: GOOG) is getting a special mention here this week on a call, but not because of the analysts catching back up to it.  This is a recognition of good research from prior weeks standing out.  When Google was in its doldrums, Canaccord Genuity reiterated its “Buy” at a time when the stock was very weak.  What stood out the most was that its price target was $800 and it did not lower its target when it reiterated that rating.  It matters because that was the highest price target out there.

Government Properties Income Trust (NYSE: GOV) is a REIT that many investors overlook.  We have even featured this as a way to “make the government pay you a 6% dividend” after it raised its dividend.  This last Monday it was downgraded to Underperform at Wells Fargo.  It seems that there is going to be rental payment risk from the federal government, probably under ‘force majeure,’ if the government defaults on its debt and cannot pay its bills. Shares were at $27.34 before the call and closed out the week at $26.40 versus a 52-week range of $24.27 to $28.53.

HollyFrontier Corporation (NYSE: HFC) is the newly combined Frontier Oil and Holly Corp. and the merger has only closed recently.  This week we saw several analyst calls on the combined company:

  • Started as Outperform w/ $90 target at Oppenheimer;
  • Cut to Neutral at BofA/ML;
  • Started as Outperform w/ $95 target at Credit Suisse.

Lam Research Corporation (NASDAQ: LRCX) got off to a rough start for earnings season after Novellus came out on Monday with its earnings warnings after the close (as did Microchip Tech).  Unfortunately for Citigroup, the firm raised its rating to Buy on Monday morning taking the stock up from $44.17 to $44.86.  Then came Novellus’ warning and the stock closed out the week at $42.06.  Tough timing for Citi even if this trades well under 10-times forward earnings.  As noted, some research calls just don’t work out too well.  We highlighted the value stocks and value traps in chip stocks this last week after those stocks all took a hit.

Williams-Sonoma Inc. (NYSE: WSM) is not a cheap stock and it is one of the premium retail culinary equipment and gadget stores out there.  So when Goldman Sachs raised its rating to Buy from Neutral it stood out when you consider that it trades at more than 17-times forward earnings. Apparently a part of the call is a high cash to market cap ratio compared to peers, as well as West Elm, international expansion, and now more than one-third of its sales being generated online.

These are certainly not the only big impact calls of the week, but they are the ones we have highlighted as the key standout calls that matter just beyond a week or a trading day.

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