CHANGE IN RATINGS
American Eagle Outfitters
upgraded at Barclays. Rating raised to Overweight from Equal weight. Price target raised to $20 from $10. 2009 EPS estimates raised to $0.88 from $0.70.
Abercrombie & Fitch
upgraded at Keybanc from Underweight to Buy. $32 price target. Company has underperformed its peers year-to-date, but still has core earnings power of $2 a share.
downgraded at Keybanc from Hold to Underweight. $27 price target. Company is facing lower potential growth, especially in Menswear.
rated new Buy at Jefferies. $45 price target. Company is trading below break-up value, based on the expected spin-off of CareFusion.
upgraded at Morgan Stanley from Equal-weight to Overweight. $34 price target. Company is leveraged to a recovery in natural gas prices.
upgraded at Barclays to equal weight from underweight and price target increased to $10 from $3.50. It would not be a good idea to chase CHS here given the recent move, but an underweight rating in the face of an improvement in the comp trend and some well managed inventory is the wrong call. CHS comp trends improved modestly, though a negative (-6%) for the quarter indicates the division remains a work in progress. The core division was less promotional than LY and think gross margins improved to positive. Inventory should end the quarter at or below the sales rates at both divisions, which could set the stage for further margin improvement.
downgraded at JMP Securities from Market Perform to Underperform. $9 price target. Key customers are aggressively cutting back on capital expenditures.
downgraded at RBC Capital from Outperform to Sector Perform. $8 price target. Natural gas fundamentals should remain weak into 2010.
upgraded at Citigroup from Sell to Hold. $16 price target. Pricing is falling, but the risk/reward has improved.
numbers lowered at UBS through 2010. Company has poor visibility, and solar inventory is building up. Neutral rating and new $16 price target.
upgraded to Equal Weight at Barclays from underweight and price target increased to $17 from $8. Mgmt keeps finding ways to wring costs out of the business, and prospects for better performance at Old Navy indicate there's less margin erosion than anticipated. That said, it's hard to argue for significant upside given the projected margin contraction vs. LY. 1Q09 operating margin likely drops ~120 bps - and that's with a $70m reduction in oper exps. Revised target is $17; 13x BCS $1.30 '10 est, in line with projected growth next year.
downgraded at Deutsche Bank from Buy to Hold. Valuation, based on a $14 price target. Containerboard pricing could also be headed lower in the near term.
rated new Overweight at Barclays Capital. $15 price target. Stock remains undervalued, despite the run since earnings.
upgraded at Credit Suisse to Neutral from Underperform based on improving liquidity position following equity offering. Raised target price to $23 from $12.
downgraded at Deutsche Bank from Buy to Hold. $11 price target. Valuation call, based on near-term pricing risk in containerboard.
upgraded at Credit Suisse to Outperform from Neutral based on favorable business trends in the short-term. Also believes the defensive nature of the company's business model should put the stock back on investors' radar screens. Raised target price to $35 from $23.
upgraded at Barclays. Rating raised to Overweight from Equal weight. Price target raised to $36 from $30. Raises 2009 EPS estimates to $2.13 from $1.90.
upgraded at JPMorgan to Overweight from Neutral based on relative valuation and extremely poor sentiment. Despite liquidity concerns, lack of visibility and poor fundamentals, see upside based on normalized earnings. Note that no bulge-bracket firms have a buy rating on the stock. Price target at $16.
STOCK COMMENTS / EPS CHANGES
numbers raised at UBS through 2010. Company continues to lose subscribers, offset by a big drop in spending. Neutral rating and new $18 price target.
estimates, target increased at UBS. Shares now seen reaching $7. Estimates raised to reflect lower dilution than the subsequent VEBA funding. Buy rating.
target raised at Barclays Capitalto $2. Company has strengthened its balance sheet, but it still appears that the stock has run too far. Underweight rating.
numbers raised at Barclays to $35. Estimates also increased, to reflect an expected sequential improvement in sales. Overweight rating.
This article was written by a staff member of TheStreet.com.