Top Analyst Upgrades and Downgrades: ArcelorMittal, Boeing, Intel, Schlumberger, Yahoo, Vivint Solar, Johnson & Johnson and More

April 20, 2016 by Jon C. Ogg

Stocks were indicated higher yet again on Wednesday, with the Dow over 18,000 and the S&P 500 back at 2,100. The memories of all the selling pressure during the first six weeks of 2016 are fading into earnings season, and investors have clearly reverted back to the trend of buying pullbacks that prevailed from 2011 to 2015.

24/7 Wall St. reviews dozens of analyst research reports each morning of the week to find new investing and trading ideas for our readers. Some analyst reports cover stocks to buy, while others cover stocks to sell or avoid.

These are top analyst upgrades, downgrades and initiations seen on Wednesday morning:

ArcelorMittal (NYSE: MT) was raised to Buy from Hold and the price target was raised to $7.00 from $4.50 (versus a $5.87 prior close) at Jefferies. It was downgraded at JPMorgan on Monday (to Underweight from Neutral), after two upgrades last week: Goldman Sachs up to Buy and Credit Suisse up to Outperform. ArcelorMittal has a 52-week trading range of $2.93 to $11.95.

Boeing Co. (NYSE: BA) has been downgraded from an unenthusiastic Neutral rating to Underperform, the equivalent of Sell rating, at Merrill Lynch. Its price objective is only $125. This downgrade is based on a serious issue with the 787 Dreamliner forecasts. Boeing’s own view is that the 787 Dreamliner will generate $29 billion in cash by 2022, but Merrill Lynch now expects only $14 billion to be generated, and it sees Boeing taking a charge on the 787 program or extending the block size as the $30 million profit per plane on average was called unachievable. The consensus price target is $137.95, and the 52-week range is $102.10 to $153.00.


Intel Corp.

 (NASDAQ: INTC) may have posted earnings and announced layoffs, but there is a mixed review from analysts. Intel was reiterated as Buy at Jefferies, but the firm raised its price target to $42 from $39, based on better margins and its reorganization. S&P Capital IQ reiterated its Buy rating and said that Intel is executing well with its plans to migrate away from a PC-oriented company. Merrill Lynch reiterated its Buy rating and $36 price objective, noting that Intel could have an upside case of $40 to $45, based on $3.00 in EPS potential. Intel has traded in a $24.87 to $35.59 range over the past 52 weeks.

Johnson & Johnson (NYSE: JNJ) was reiterated as Buy and the price target was raised to $130 from $116 (versus a $112.68 close) at Argus. The call is based on further upside expectations after strong first-quarter results and an upbeat outlook for 2016. Note that the highest official analyst price target in the Thomson First Call universe was only $123.

Schlumberger Ltd. (NYSE: SLB) was raised to Overweight from Equal Weight and the price target was raised to $93 from $83 (versus a $79.64 close) at Barclays. The stock closed up 2.8% the prior day, and the consensus price target of $84.28 compares to a 52-week range of $59.60 to $95.13.

Yahoo! Inc. (NASDAQ: YHOO) was reiterated as Buy at Jefferies after earnings, with the firm raising its price target to $43 from $40. Merrill Lynch reiterated its Buy rating and raised its price objective to $48 from $46 on recent Yahoo! Japan appreciation, and the firm only sees downside to $36 based on the current Alibaba stock price. Oppenheimer reiterated its Outperform rating and raised its target to $49 from $40. The 52-week range is $26.15 to $45.10.

Vivint Solar Inc. (NYSE: VSLR) was resumed in coverage at Merrill Lynch with a $2 price objective (versus a $3.01 close). This is based on its cost, growth and financing concerns and also on 10-times EBITDA and 12% cash flow yield. Vivint Solar has a 52-week trading range of $2.32 to $16.00.

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Other key analyst upgrades and downgrades were seen in the following:

Advanced Energy Industries Inc. (NASDAQ: AEIS) was downgraded to Neutral from Buy at Merrill Lynch, but the firm maintained its $35 price objective (versus a $34.52 close) as its “Buy” thesis has largely played out. Its fundamentals were called strong, but Merrill Lynch said it would rather own Applied Materials or Lam Research at this point in the cycle.

Badger Meter Inc. (NYSE: BMI) was downgraded to Neutral from Buy at R.W. Baird.

Copa Holdings S.A. (NYSE: CPA) was downgraded to Sell from Hold and the price target was cut to $49 from $55 (versus a $68.88 close) at Deutsche Bank.

Hershey Co. (NYSE: HSY) was downgraded to Underperform from Buy at Merrill Lynch, with the firm saying that there is a lack of near-term catalysts for upward estimate revision or multiple expansion.

International Business Machines Corp. (NYSE: IBM) was maintained as Buy with a $160 price target at Argus, after the troubled tech giant reported a 5% annual decline in revenue.

Kansas City Southern (NYSE: KSU) was raised to Buy from Neutral at Merrill Lynch, and the price objective was raised to $106 from $77. The firm admitted that rails may pull back in the near term after a big run-up, but its operations were called impressive, and the rail giant is rebuilding its case for a premium valuation versus peers.

Manitowoc Co. Inc. (NYSE: MTW) was raised to Buy from Hold with a $6 price target (versus a $4.95 close) at Stifel.

Marriott International (NYSE: MAR) was downgraded to Market Perform from Outperform at Raymond James.


McCormick & Co. (NYSE: MKC) was started with a Neutral rating with a $95 price target (versus a $94.99 close) at Credit Suisse.

Northern Trust Corp. (NASDAQ: NTRS) was downgraded to Sell from Neutral at Citigroup.

Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) was downgraded to Market Perform from Outperform at Wells Fargo.

Sally Beauty Holdings Inc. (NYSE: SBH) was started with a Hold rating at BB&T Capital Markets.

Sarepta Therapeutics Inc. (NASDAQ: SRPT) was initiated as Neutral with a fair value estimate of $19 (versus a $20.86 close) at Janney.

Spirit Airlines Inc. (NASDAQ: SAVE) was downgraded to Neutral from Overweight with a $22 price target (versus a $52.96 close) at JPMorgan.

Synovus Financial Corp. (NYSE: SNV) was downgraded to Market Perform from Outperform at Raymond James.

TIER REIT Inc. (NYSE: TIER) was started as Buy with Fair Value Estimate of $16.50 (versus a $14.55 close) at Janney.

ULTA Salon, Cosmetics & Fragrance Inc. (NASDAQ: ULTA) was started with a Hold rating at BB&T Capital Markets.

UnitedHealth Group Inc. (NYSE: UNH) may be exiting most of its public exchanges, but this may not be financially bad for the company. UnitedHealth was reiterated as Buy at Jefferies, and the firm raised its price target to $153 from $136. Oppenheimer reiterated its Outperform rating and raised its price target to $145 from $140.

Tuesday’s top analyst upgrades and downgrades included Devon Energy, Illumina, Pandora, Panera Bread, Potash, Regions Financial, Southwestern Energy and over a dozen more companies.