Analysts' Upgrades and Downgrades

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Tuesday's Analysts' Upgrades and Downgrades

TSC Staff

Change in Ratings

Abercrombie & Fitch (ANF) was upgraded from Neutral to Overweight, Prudential said. $89 price target. It appears that business remains strong in January, and comparisons become very easy beginning in February.

CDW (CDWC) was downgraded to Market Weight from Overweight, said Thomas Weisel. 2007 EPS estimates set at $3.98.

Cephalon (CEPH) was upgraded from Neutral to Overweight, JP Morgan said. Higher Provigil sales and a positive launch for Fentora should drive near-term growth.

Freidman Billings Ramsey downgrades Cognos (COGN) to market perform from outperform as the shares have surpassed its $45 price target. Cisco (CSCO) was downgraded from Overweight to Neutral, Prudential said. Stock has caught up with higher expectations, leaving little room for upside surprises in 2007.

Cisco was downgraded from Buy to Neutral, Bank of America said. $30 price target. See limited near-term upside, as margins have likely already peaked.

DJO (DJO) was downgraded to Market Perform, Wachovia said. Company lacks catalysts for 2007, and will likely make fewer acquisitions. Stock also appears fully valued at 21 times expected 2008 earnings.

Darden Restaurants (DRI) was upgraded from Neutral to Overweight, JP Morgan said. Company held an upbeat analyst meeting next week, and should be able to post soild sales and earnings growth over the next several quarters. FedEx (FDX) was upgraded from Neutral to Overweight, JP Morgan said. Stock is trading at the low end of its recent valuation range, and solid economic growth plus lower fuel prices should support near-term earnings.

ITT (ITT) was downgraded to Market Perform from Outperform at FBR. All EPS estimates for 2007 and 2008 maintain current levels at $3.38 and $3.90, respectively. Price target also holds at $61.

Janus (JNS) was downgraded from Sector Perform to Underperform, CIBC said. 2007 estimate also cut to 94 cents, as near-term inflows and performance fees could come in light.

Wachovia said it is downgrading Lamar Advertising (LAMR) to Market Perform from Outperform due to valuation. Believe recent soaring expectations regarding digital billboards have created limited potential upside for shares. Valuation range at $68 to $72.

Masco (MAS) upgraded to Buy rating from Neutral at UBS. Price target jumps to $45 from $31. Maintains 2007 EPS estimates at $1.89.

Medicines (MDCO) was downgraded from Neutral rating to Reduce at UBS. Price target held at $30 while reducing FY06 estimates to 32 cents from 34 cents.

Goldman said it is reinstating its coverage on Motorola (MOT) with a Neutral rating. Sees limited upside due to weak fundamentals in handset market, slowing end market demand, and company's difficulty in differentiating from other brands. Price target at $18.

Nokia (NOK) upgraded to Buy from Neutral, Goldman said. See perfect storm of negative news (MOT profit warning, Apple's iPhone launch, downgrades) coinciding with bottom of company's product cycle to create opportunity. Expect solid Q4 results with limited pricing pressure. Price target at $22.10.

Perkin Elmer (PKI) upgraded to Buy rating from Neutral at UBS. Price target lifts to $27 from $23. Maintains 2007 EPS estimates at $1.26 and introduces 2008 estimate of $1.47.

Credit Suisse said it is downgrading Rock-Tenn (RKT) to Neutral from Outperform based on valuation. Stock has essentially reached its target price.

SiRF Technology (SIRF) downgraded to Neutral rating at Oppenheimer. 2007 EPS estimates lowered to $0.92 from $1.06.

XM Satellite (XMSR) was downgraded from Buy to Neutral, Bank of America said. Merger appears more likely, but synergies may still take several years to materialize. Consensus subscriber numbers may also still have to come down.

Wachovia said it is upgrading YRC Worldwide (YRCW) to Outperform from Market Perform based on recent realignments in regional and long-haul LTLs to boost earnings power, as well as positive cyclical view and valuation relative to peers. Price target range at $47 - $52.

Stock Comments/EPS Changes

Credit Suisse said it is lowering its 2008 EPS estimates on Borders Group (BGP) to $0.62 from $1.10 to reflect weak 4Q results. Believes turnaround is further away. Maintained Underweight rating.

Capital One (COF) numbers lowered at Jefferies. Price target drops to $95 from $100. 2007 EPS estimates lowered to $7.95 from $8.16. Reiterates Buy rating.

Goldman said it is upping its target on Coach (COH) to $53 from $46 based on expected strong earnings growth in 2008. See increasing penetration of handbags above $400, continued momentum in factory outlet channel, and introduction of new Ergo collection driving sales. Maintained Buy rating.

Credit Suisse said it is lowering its 2008 EPS estimates on Home Depot (HD)HD to $2.70 from $2.84. Cites new management change is encouraging but near-term will be rough. Maintained Underweight rating.