Monday's Analysts' Upgrades and Downgrades

TSC Staff

CHANGE IN RATINGS

Applebee's (APPB Quote) upgraded at UBS: APPB upgraded to Buy rating from Neutral at UBS. Price target lifts to $29 from $25. However, 2007 estimates lowered to $1.12 from $1.13 and 2008 estimates drop to $1.20 from $1.22.

Black & Decker (BDK Quote) downgraded at Baird: BDK was downgraded from Outperform to Neutral at Robert Baird. $84 price target. Retail sales data has been softening, leading to estimate cuts. Buyback activity should lend some near-term support to the shares.

Black & Decker (BDK Quote) numbers lowered at UBS: BDK is estimates lowered at UBS. 2006 EPS estimates drop to $6.54 from $6.90 and 2007 estimates lowered to $6.31 from $6.57. Reiterated Neutral rating.

Baker Hughes (BHI Quote) upgraded at Goldman Sachs: Goldman is upgrading BHI to Buy from Neutral based on relative valuation. This upgrade is in conjunction with Schlumberger downgrade, as SLB's premium relative to peers in at historic levels. Expect improvements in Baker Oil tools in 2007, and that low expectations and gradual improvements in operating performance should drive BHI shares going forward. Price target at $102.

Citigroup (C Quote) upgraded at Merrill: Rating on C was upgraded from Neutral to Buy at Merrill Lynch. Stock remains attractive, based on a sum-of-the-parts valuation. Yield pressure should also abate in 2007.

Cooper Cos. (COO Quote) downgraded at Prudential: COO was downgraded from Neutral to Underweight at Prudential. $42 price target. See further downside to 2007 guidance, as the overall market appears to be growing at a slower pace.

Amdocs (DOX Quote) initiated at Morgan Stanley: Morgan Stanley initiates coverage of Amdocs with an equalweight rating and $42 price target.

EnCana downgraded at Goldman Sachs: Goldman is downgrading ECA to Sell from Neutral based on valuation relative to other large E&Ps. Note that company trades at highest EV/debt-adjusted cash flow multiple. Sell rating reflects preference towards XTO and DVN. Target price at $56.

Foot Locker (FL Quote) downgraded at Merrill: FL was downgraded to Neutral at Merrill Lynch. Cash flow will be lower, given investment in the new retail concept. Also seeing more promotions during the holiday shopping season, which could hurt margins.

Forest Oil (FST Quote) upgraded at CSFB: FST was upgraded from Neutral to Outperform at Credit Suisse. Expect higher natural gas prices through the end of the decade. Company also has ability to generate robust organic growth.

IBM (IBM Quote) rated new Neutral at Prudential: IBM was initiated with a Neutral rating at Prudential. $100 price target. Company should continue to generate momentum in the fourth quarter, led by software bookings. That said, the stock is already at a 52-week high, and growth should slow in Services and Hardware during 2007.

JC Penney (JCP Quote) upgraded at AG Edwards: JCP was upgraded from Hold to Buy at AG Edwards. $96 price target. Inventory management is improving, and the company's earnings surprises should tend toward the upside over the next several quarters.

L-3 Communications (LLL Quote) downgraded at Credit Suisse: Credit Suisse downgrades L-3 Communications from outperform to neutral after the company lost a large contract from the Army.

Murphy Oil (MUR Quote) downgraded at Credit Suisse: Credit Suisse downgrades Murphy Oil shares to underperform from neutral.

Robert Half (RHI Quote) downgraded at Merrill: RHI was downgraded from Buy to Neutral at Merrill Lynch. Stock is up 20% over the past three months, and is already valued at 20.3 times expected 2007 earnings.

Schlumberger (SLB Quote) downgraded at Goldman Sachs: Goldman is downgrading SLB to Neutral from Buy based on relative valuation. Downgrade is in conjunction with Baker Hughes upgrade, as valuation gap is at historic levels. Maintain view that SLB is best company in coverage universe, but do not see room for multiple expansion and advise investors to switch out of SLB and into BHI. Target price at $80.

Sealy (ZZ Quote) downgraded at JP Morgan: ZZ was downgraded from Overweight to Neutral at JP Morgan. Expect below-consensus earnings through 2007. Soft mattress sales continue to drive promotional pricing.

STOCK COMMENTS / EPS CHANGES

Accenture (ACN Quote) estimates raised at Goldman: Goldman is upping its 2007 estimates on ACN by two cents to $1.83 due to positive demand in IT services. See further share gains driven by sustained revenue growth, margin improvements, strong free cash flow and share buybacks. Target price at $41.25.

ConEd (ED Quote) price target increased at Goldman: Goldman is raising its target on ED to $44 from $38 based on rate base growth. Reiterated Sell rating, however, due to negative bias toward future rate cases in New York. See rate case risk and lower allowed returns weighing on expected levels of earnings growth.

ITT (ITT Quote) estimates lowered at Goldman: 2006 estimates on ITT cut to $2.81 from $2.92 at Goldman. Company's 2007 outlook conference call provided lower-than-expected revenue guidance. Maintained Neutral rating and $59 price target.

Illinois Tool Works (ITW Quote) estimates cut at Goldman: Goldman is reducing its 2006 estimates on ITW to $2.96 from $3.01 after company lowered guidance due to persistent weakness in new housing. Maintained Buy rating and $55 target.

MGM Mirage (MGM Quote) numbers raised at Jefferies: MGM numbers raised at Jefferies. Price target jumps to $71.00 from $54.00, but lowers 2007 EPS estimates a penny to $2.67. Reiterates Buy rating.

Nike (NKE Quote) price target increased at Goldman: Target on NKE raised to $112 from $104 at Goldman. See potential for upside Q2 earnings surprise due to reduced effect from pressure on gross margins and Air Max marketing expenses. Maintained Buy rating.

SunTrust Banks (STI Quote) target raised at UBS: STI price target raised at UBS. Price target lifts to $96 from $88. Maintains current EPS estimates. Reiterates Buy rating.

TXU(TXU Quote) estimates raised at Credit Suisse: Credit Suisse raises EPS estimates for 2007 and 2008 on TXU based on lower natural gas prices.

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