Filed under: Analyst upgrades and downgrades

MOST NOTEWORTHY: Lukoil, ENI SpA and Meritage were today’s noteworthy upgrades:

• Citigroup upgraded shares of Lukoil (OTC: LUKOY) to Buy from Hold on valuation, as they believe the company’s oil production, refineries and gas stations outside of Russia are not priced into shares.
• ABN Amro raised ENI SpA (NYSE: E) to Hold from Sell after a meeting with management.
• Meritage (NYSE: MTH) was upgraded to Buy from Neutral at UBS on strong results.

OTHER UPGRADES:

• Morgan Stanley upgraded Corporate Executive (NASDAQ: EXBD) to Equal Weight from Underweight.
• Trico Marine Services (NASDAQ: TRMA) was upgraded to Overweight from Equal Weight at Lehman.
• Holly Corp. (NYSE: HOC) was raised to Outperform from Market Perform at BMO Capital.

Permalink | Email this | Comments

Share This

Filed under: Earnings reports, Forecasts, Bad news, Crocs Inc (CROX)

Shares of colorful plastic shoes maker Crocs Inc. (NASDAQ: CROX) have been plunging this morning, despite the firm posting strong fourth-quarter profit. Hurting the stock this morning is the company’s 2008 guidance, which came in slightly below analysts’ predictions. As Timothy Sykes discussed, Crocs impressed with its international growth but failed to raise its outlook for the year.

Crocs reported last night that its profit during the fourth-quarter surged 84% to $38.3 million, or 45 cents per share, boosted by higher international demand that nearly doubled its revenue. Its earnings per share were a penny higher than analysts’ forecast of 44 cents per share.

For its quarterly revenue, Crocs posted an impressive jump of 99% to $224.8 million, up from $112.9 million in the year-ago period. Revenue during the period was helped by a 47% rise in the United States sales. International sales more than tripled to $109 million.

Continue reading Crocs (CROX) plunges on pessimistic outlook

Permalink | Email this | Comments

Share This

Filed under: Analyst upgrades and downgrades, AT and T (T), Coach Inc (COH), Verizon Communications (VZ)

MOST NOTEWORTHY: The Telecom Services sector, Watsco and Key Corp were today’s noteworthy downgrades:

• Credit Suisse downgraded the Telecom Services sector to Market Weight from Overweight as they believe trends could weaken in 2008 given increasing wireless competition and the difficult economic environment. The broker downgraded Verizon (NYSE: VZ) and AT&T Corp. (NYSE: T) to Neutral from Outperform in conjunction with the sector downgrade.
• Oppenheimer downgraded Watsco (NYSE: WSO) to Perform from Outperform citing lack of near-term catalysts, further weakening in its core business, and weak 2008 earnings guidance.
• RBC Capital lowered Key Corp. (NYSE: KEY) to Underperform from Sector Perform citing further credit deterioration following the company’s outlook.

OTHER DOWNGRADES:

• Thomas Weisel lowered Coach (NYSE: COH) to to Market Weight from Overweight.
• Citigroup downgraded PPG Industries (NYSE: PPG) to Hold from Buy.
• BNP Paribas downgraded the China Telecom sector to Neutral from Overweight.

Permalink | Email this | Comments

Share This

Filed under: Analyst initiations

MOST NOTEWORTHY: Chesapeake, Brookfield Asset Management and Nile Therapeutics were today’s noteworthy initiations:

• Jefferies initiated Chesapeake Energy Corp. (NYSE: CHK) with a Buy rating and $54 target and thinks the company can post group-leading organic growth in production and reserves over the next several years.
• Thomas Weisel assumed Brookfield Asset Management (NYSE: BAM) with a Market Weight rating citing slowing cash flow growth.
• Rodman & Renshaw is positive on Nile Therapeutics’ (OTC: NILT) lead compound, CD-NP, a chimeric natriuretic peptide with potential efficacy and safety enhancements that could permit broad use in acute heart failure setting. The firm started shares of Nile with a Market Outperform rating and $7 target.

OTHER INITIATIONS:

• Baird initiated Concur Tech (NASDAQ: CNQR) with a Neutral rating.
• RBC Capital initiated General Moly (AMEX: GMO) with a Sector Perform rating and $11 target.
• Wachovia (NYSE: WB) was reinstated at Goldman with a Neutral rating.

Permalink | Email this | Comments

Share This

Filed under: Berkshire Hathaway (BRK.A), Newsletters, Commodities, Oil, Agriculture, Stocks to Buy, Burlington Northern Santa Fe (BNI)

With Warren Buffett in the news recently, it is timely to look at a recent report from Paul Tracy, highlighting some of the best-positioned stocks currently held by Berkshire Hathaway (NYSE: BRK.A) — Burlington Northern Santa Fe (NYSE: BNI) and WABCO Holdings (NYSE: WBC).

Here, the editor of StreetAuthority Market Advisor explains, “Buffett looks for such factors as intrinsic value, low debt, managerial expertise, a margin of safety and an ‘economic moats’ that offers some sort of sustainable competitive advantage.” Here’s a pair of transportation stocks that fit the bill.

“While many investors fret over the current volatility in the stock market, Warren Buffett is likely busy looking for value. Historically, in volatile up and down markets, Buffett has found even more opportunities than in raging bull markets.”

“Burlington Northern Santa Fe is the second-largest railroad in the U.S. Berkshire holds an 18.2% stake in BNI, recently boosting that stake by purchasing 11 million shares to bring its total ownership to more than 63 million shares. Buffett has made no secret of his desire to purchase more of the stock.

“The key to discerning competitive advantages between the major railroad firms lies in the strategic location
of their networks. Specifically, BNI has the largest network of track in a region of the western U.S.
known as the Powder River Basin, which is home to America’s largest reserves of coal.

Continue reading Rails and trucks: A look at two Buffett stocks

Permalink | Email this | Comments

Share This

Filed under: Walt Disney (DIS), Stocks to Buy

In less-than-certain economic times, it’s prudent to add one or two large-cap demonstrated business model performers to your portfolio, and with the aforementioned in mind, Disney is worth a review.

Disney (NYSE: DIS) is the world’s second largest media conglomerate.

In general, analysts see adequate revenue gains on media network performance (including solid TV advertising sales), and relatively heavy traffic at worldwide theme parks.

Meanwhile, merchandise licensing revenue should be adequate, as should film revenue, with difficult year-to-year film revenue comparisons expected to lighten somewhat in F2009. Further, Disney’s balance sheet is among the strongest in the sector. The Reuters F2008/F2009 EPS consensus estimates for DIS are $2.23/$2.39.

Continue reading Disney’s world is starting to look wonderful again

Permalink | Email this | Comments

Share This

Filed under: Intuit Inc (INTU), Options, Politics

Intuit (NASDAQ: INTU) is scheduled to report Q2 EPS on February 21. Soleil Securities says: “We continue to see double-digit core-business growth, with expanding margins.”

INTU closed at $30.23 Tuesday. INTU March option implied volatility of 34 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Permalink | Email this | Comments

Share This

Filed under: H and R Block (HRB), Options

H&R Block (NYSE: HRB) closed at $18.47 Tuesday.

Soleil Securities has a Buy rating on HRB.

HRB overall option implied volatility of 45 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Jackson Hewitt (NYSE: JTX) closed Tuesday at $21.65, near a 30-month low.

Soleil Securities has a Hold rating with an $18 price target on JTX.

JTX overall option implied volatility of 59 is above its 26-week average of 43 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Permalink | Email this | Comments

Share This

Filed under: Forecasts, Industry, Boeing Co (BA)

Airbus believes that new orders for its planes will drop by half to about 700 in 2008. The company’s backlog of planes that it has to build and deliver sits at 3,600 according to The New York Times.

The introduction of new products helped Airbus and Boeing (NYSE: BA) to a year of record orders in 2007, but that has taken up most of the demand for commercial aircraft which will be delivered over the next few years.

The slowdown in orders is not likely to harm earnings at either company soon because heavy delivery schedules will keep revenue flowing. It does raise the question of whether the industry will hit a slump near the end of the decade when current orders have been filled.

If the market senses that the aircraft business will not be as robust over time as it is now, it will probably pressure Boeing’s shares which have already fallen from 52-week high of almost $108 to just above $85.

Investors who plan to hold Boeing long-term may want to reconsider.

Douglas A. McIntyre is an editor at 247wallst.com.

Read | Permalink | Email this | Comments

Share This

Filed under: Products and services, Competitive strategy, Wal-Mart (WMT)

When Wal-Mart Stores, Inc. (NYSE: WMT) reported it had achieved its first $100 billion quarter in the company’s history Tuesday, it was probably a time to celebrate at its Bentonville headquarters. But even a $100 billion quarter doesn’t make for good feelings sometimes, as much of that growth came from the company’s international division. Yes, that’s the one I’ve lamented over frequently in the past. This time, it was shining brightly.

Wal-Mart’s Q4 sales came in showing a 19% international growth rate that pushed those sales to $27 billion for the just completed quarter. At the same time, the retailer’s U.S. sales rose only 5%. Is international becoming the company’s growth engine like it has frequently wanted to happen? This quarter proved it — yes, it has. Wal-Mart’s Asda grocery chain in the UK even showed same-store sales growth in the “mid-single digits” for all of 2007. Wal-Mart indicated that its Asda operation was the fastest growing food retailer in Europe, ahead of competitors Tesco and Sainsbury.

Is “Everyday Low Prices” winning over customer groups outside the U.S. now? That was the reason given behind Asda’s growth, as customers seeking out the lowest prices more frequently shopped at Asda. Is this the beginning of the “Wal-Martization” of all its global markets? Commodity and energy prices aren’t doing anything to help, but it’s too early to make that call. Give four quarters of outstanding international growth, and finally, Wal-Mart investors may have something to cheer about.

Read | Permalink | Email this | Comments

Share This