Wednesday's Analysts' Upgrades, Downgrades
Change in Ratings
CompuCredit (CCRT) downgraded at Jefferies to hold rating from buy. Price target cut to $10 from $13 and 2008 EPS estimates hold at minus 9 cents.
Fannie Mae (FNM) upgraded at Morgan Stanley to equal-weight based on valuation. See weak fourth-quarter results as reflected in share price. Note that first-quarter results for both FNM and Freddie Mac (FRE) should still show negative earnings, but see rebound thereafter. Continue to prefer FRE to FNM. No target price.
Jabil Circuit (JBL) upgraded at Merrill from neutral to sell, Merrill Lynch said. Stock is down 50% since late September, and is already pricing in lower end-market demand. Company also trades at a discount to its earnings growth rate, and looks historically cheap on its book value.Jackson Hewitt (JTX) upgraded at Goldman Sachs to neutral from sell based on valuation. See dismal third-quarter results and weak outlook fully reflected in shares. Price target cut to $14 from $20. Liberty Capital Group (LCAPA) downgraded at Morgan Stanley to equal-weight from overweight following the carve out of 85% of its former asset value into new tracker Liberty Media ( LMDIA). See LCAPA trading at a discount to NAV due to potential liabilities in the case that Liberty liquidates its holdings. Do not see catalysts that would narrow this gap. Target at $17. Legg Mason (LM) upgraded at Wachovia to market perform, Wachovia said. Valuation call, as value funds should attract more funds in the current environment. CEO change should also be a positive, and Citigroup has already placed most of its shares on the market. Omniture (OMTR) upgraded at Jefferies to buy rating from hold. Price target and 2008 EPS estimates hold at $27 and 44 cents, respectively. Paetec (PAET) coverage initiated at Deutsche Bank with a buy rating and $12 target price as company is well-positioned to benefit from improving industry conditions. PepsiAmericas (PAS) upgraded at Deutsche Bank to a buy rating as recent share weakness is unwarranted. Pioneer Drilling (PDC) upgraded at Deutsche Bank to a buy rating due to significant accretion from acquisitions, increased international exposure and more optimal capital structure. RiskMetrics Group (RMG) coverage initiated at Goldman with a neutral rating. See appealing business model and organic revenue growth, but note pricey valuation. Target price at $24. Thornburg (TMA) downgraded at Jefferies to hold rating from buy. Price target slashed to $3.75 from $13 and 2008 EPS estimates cut to negative $3.10 from $1.48. Whirlpool (WHR) downgraded at JPMorgan from neutral to underweight. Stock is up 8% on the year, but the 20% increase in steel prices will weigh on earnings.
Stock Comments/EPS ChangesSandRidge Energy (SD) target price raised at Deutsche Bank to $39.
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