Category Archives: Analyst Upgrades/Downgrades
“U.S. policymakers must address debt loads projected to rise later this decade to avoid a 2013 downgrade, even as the latest budget projections are “credit positive,” according to Moody’s Investors Service.
The U.S. budget deficit will drop to $378 billion in 2015 from a record $1.4 trillion in 2009, according to Congressional Budget Office data. The federal government will post a $642 billion deficit this year, the first time in five years that the shortfall has been less than $1 trillion. Moody’s said Sept. 11 that the U.S.’s top Aaa rating would likely be cut to Aa1 if an agreement on the debt ratio isn’t reached.
“The fact that it showed much lower debt levels going forward, we view as a positive development,” Steven Hess, senior vice-president at Moody’s and based in New York, said in a telephone interview of the CBO forecast. “More needs to be done on the policy front to address this rising debt ratio.”
While projections from the non-partisan budget office forecast the ratio of U.S. debt to gross-domestic-product declining to less than 71 percent by fiscal year 2018, the CBO forecasts the measure will increase “thereafter, pointing to the uncertain long-term outlook if reform of entitlement programs does not take place at some point,” Moody’s said in a report.
” “Our positive 2013 outlook for S&P 500 has played out much faster than we expected.” That is how the latest equity update from Goldman Sachs, which until today had an S&P target of 1625 for the year end S&P, begins. And, logically, the only option for Goldman is to hike its outlook even more, because not even the Squid apparently could anticipate how quickly the policy it forced down the throats of central banks around the world, levitated markets to surpass its old price targets. The result is David Kostin (who until December had foreseen 1250 on the S&P for the end of 2012) and company were forced to goalseek even higher targets based on tried and true excel model fudging exercises, and such “value” creation as multiple expansion and dividend payments.
To wit: “Our earnings estimates remain unchanged but we raise our dividend estimates and index return forecasts for 2013 through 2015. We expect S&P 500 will rise by 5% to 1750 by year-end 2013, advance by 9% to 1900 in 2014, and climb by 10% to 2100 in 2015….”
Upgrades - ABT, ACN, NTES, JCP, KORS, P, PCLN, TMUS, TMHC
Downgrades - AMTD, BAC, BBBY, BLK, EAT, SCHW, KSU, LEAP, LOW, NSR, RHT, RT, SNDK,
“Bearish sentiment toward gold has prices for the yellow metal tumbling again.
On Wednesday, George Soros revealed through a regulatory filing that he cut his gold exposure during the first quarter.
In a new note to clients, Credit Suisse‘s Ric Deverall forecasted that gold would plunge to $1,100 this year and eventually to $1,000 within five years. This according to Bloomberg’s Maria Kolesnikova.
More from Kolesnikova…”
“JPMorgan’s bullish analyst Tom Lee just cranked up his S&P forecast:
This has been a better bull market than we expected, particularly in 2013. But this is conforming to history—the average gain in the fifth year of a bull market is 19% (implies 1,719)….”
“S&P has just downgraded the credit rating of Berkshire Hathaway to AA+ from AA.
“The lower credit rating on BRK better reflects our view of BRK’s dependence on its core insurance operations for most of its dividend income,” said S&P credit analyst John Iten.
S&P is maintaining a negative outlook on the company.
Here’s the press release from S&P…”
“NEW YORK — Huxley Sommerville, group managing director at Fitch Ratings, increasingly fears another massive financial crisis. Ask him why and he tells the story of a recent deal his credit rating agency failed to secure.
Last month, a group of Citigroup bankers contacted Fitch’s New York headquarters, hoping to convince its analysts to deliver their seal of approval for a bond issue. In essence, Citi needed Fitch to conclude that the landlord of an iconic Manhattan office tower should be considered as trustworthy as the government of the United States.
Citigroup had recently partnered with Deutsche Bank to lend $783 million to the owner of the Seagram Building, an architectural gem on Park Avenue in midtown Manhattan. Now, its bankers were in the process of turning that huge loan into multiple bonds, hoping to resell the debt to investors in pieces. They would turn one loan into commercial mortgage-backed securities.
But doing the deal required the rating agency’s blessing: Fitch had to assign a slice of those bonds its coveted “AAA” rating, an action that would officially make the debt about as sound as a savings bond from Uncle Sam….”
Upgrades - ARO, CIEN, COO, GPS, HK, HALO, LOW, PRU, RBC, RCL
Downgrades - BBRY, SCHW, CLX, ETFC, GDI, GLNG, JNS, LNKD, RENN, SFD, AMTD
Upgrades - MDRX, DF, CPA, ELX, FIO, KR, NSM, WLP, YHOO,
Downgrades - AVG, CI, CREE, KBH, MPEL, MNST, RYL, SCTY, VVUS,
In his brand new note to clients, he offers his list of “23 Ideas For The Next 3-6 Months.”
“Our base case in the short term sees equities higher through the end of 2Q and Cyclicals outperforming (dead cat bounce, 1Q laggards leading in 2Q, etc.),” he wrote. “However, there is a case to be made that Cyclical leadership will likely be a three- to five-year story with Technology, arguably the least consensus, therefore perhaps best positioned”
Lee’s picks run the gamut from biotech to semiconductors to retail.
The group boasts an average 2013 estimated price-to-earnings ratio of 12.3x and an average upside potential to their target prices of 13%.
“The boom in North American energy (primarily related to shale in the US and oil sands in Canada) is one of the biggest stories in the global economy.
A new report from The International Energy Agency (IEA) agency discusses the consequences of the boom in dramatic fashion, arguing that it’s as big of a deal for the world oil market as the rise of China was over the last 15 years.
The report describes the US supply “shock” as that is sending “ripples” throughout the world, affecting every aspect of the market.
This chart from the report drives home how significant the expansion of North American supply (dark green bar) will be relative to the growth expected from the rest of the world in the next few years.
Here’s the key part from the press release announcing the report:
The supply shock created by a surge in North American oil production will be as transformative to the market over the next five years as was the rise of Chinese demand over the last 15, the International Energy Agency (IEA) said in its annual Medium-Term Oil Market Report (MTOMR) released today. The shift will not only cause oil companies to overhaul their global investment strategies, but also reshape the way oil is transported, stored and refined….”
Upgrades - AGN, AWK, ABFS, BA, BSX, EIX, NUAN, PRLB, DDD, TEVA, WDAY, Z,
Downgrades - AES, CVC, DF, DNDN, FRX, LTD, MYL, OPTR, RCII, SHPG, TECH,
“The yen broke through the 100 dollar resistance level Friday and was trading at 101.63, its weakest level in more than 4 ½ years.
Now the question is will how low can it go. David Baran, co-founder of Tokyo-based hedge fund Symphony Financial Partners, says he doesn’t see the dollar stopping until 115 to 118 yen.
“Give it time, it will happen,” he tells The Wall Street Journal….”
“Investors often hear about analyst upgrades and new “Buy” ratings. What they do not hear from most Wall Street analysts is the prediction that a stock price could double or come close to doubling. Most analysts do not want to get that bold by predicting ”the next Apple” because a call like that can wreck a career. These all come with high risk, but some investors might be inclined to consider these as being extreme value stocks based on the projected upside.
Most stocks simply do not double over the course of a year, and identifying the next double, or ten-bagger, generally has a lot of risk that companies like 3M and GE just do not have. Such calls generally come from boutique research firms, but that is not always the case.
Ocean Power Technologies, Inc. (NASDAQ: OPTT) and XOMA Corporation (NASDAQ: XOMA) were highlighted as stocks which could more than double by analyst calls On Thursday. Deckers Outdoor Corporation (NASDAQ: DECK) is a runner-up as the call was close enough to a double that it caught our attention from the same day, and a call from Monday on Pure Cycle Corp. (NASDAQ: PCYO) will catch the eyes of small-cap and speculative investors with the risk appetite for such a small stock….”
At 1370 i wrote a post that said if your short you arer fucking dead. I never expected to see a rise above 1550-1575 S&P.
Now the NY fed expects stocks to rise for another 5 years…..so you might just be fucking dead forever; believe me 5 years is forever in the stock market.
Upgrades - AWK, BBVA, CBI, FLR, GRPN, KBR, MDR, OPTT, RAX, SINA, VSAT,
Downgrades - BLK, CLNE, GES, LPSN, RAX, TSLA, THI, TLP, TUMI,
“DETROIT (Reuters) - Consumer Reports magazine awarded a near-perfect score to Tesla MotorsCo’s Model S, citing the electric car’s power, “pinpoint” handling and quiet, well-crafted interior.
The score of 99 out of 100 puts the Model S far ahead of other electric and gas-powered rivals, including the Porsche Panamera sports car and the Fisker Karma plug-in hybrid.
“Slipping behind the wheel of the Tesla Model S is like crossing into a promising zero-emissions future,” the highly influential magazine said in its review on Thursday. “It’s what Marty McFly might have brought back in place of his DeLorean in ‘Back to the Future’.”
Consumer Reports last gave a near-perfect score six years ago to the Lexus LS 460L luxury sedan made by Toyota Motor Corp, according to the magazine, which has more than 8 million subscribers.
The positive review comes on the heels of Tesla reporting its first quarterly profit in its 10-year history. Chief Executive Elon Musk is attempting to reach a broader group of buyers with the Model S electric sedan.
Consumer Reports said a Model S equipped with an 85 kilowatt hour battery was able to get 200 miles between electric charges. Range varied between 180 miles on cold winter days to about 225 miles in more moderate temperatures….”
“David Einhorn’s Q1 letter to investors is out, and he says that he got a big boost from the weakening yen, reports Bloomberg.
What’s more, he says Apple took a “step forward” and that he’s adding to his bet.
Einhorn’s hedge fund, Greenlight Capital, owned $1.5 million shares of Apple at the end of Q4 2012 and he was very public about desire to get the company to issue preferred stock (you can check out his presentation about it here).
He even sued Apple over the matter but dropped the lawsuit eventually.…”
Upgrades - ANF, ACI, BMRN, CBOE, CHS, EVTC, GPS, MDVN, KORS, PF, RALY, SN, URBN,
Downgrades - AIG, ANR, AEO, COH, INCY, JCP, TMUS, TJX, TIF,
Upgrades - CLF, DG, HBI, HUM, INTC, KNOP, PVTB, THOR, UNH, YRCW,
Downgrades - SAN, BBVA, BSFT, CORT, EGO, EXC, HTWR, MCO, PCAR, PAAS, WFT