Lennar Corp Upgraded by Citigroup Analyst
was upgraded Monday by a Citigroup analyst, sending its shares climbing in morning trading.
Citigroup analyst Josh Levin upgraded Lennar to "buy" from "hold," and also lifted his price target on the stock to $12 from $11.
Levin said that he believes Lennar shares are currently trading at around a 50% discount in relation to its homebuilder peers, based on price-to-book value. The analyst said that he expects that "valuation gap to narrow in the coming months given the company's improved near-term liquidity profile."
Levin also said that despite several challenges facing the housing market, he still expects "that near-term news flow will remain positive."
Lennar shares rose 97 cents, or +11%, in Monday morning trading following the upgrade.
We have avoided shares of LEN since our early June coverage began, when the stock was trading at $15.23. The company has a 1.82% dividend yield, based on Friday's closing stock price of $8.71.
The stock has near-term technical support in the $6.00-$6.50 price area. If the shares can firm up, we see overhead resistance around the $11-$13 price levels. We would remain on the sidelines despite our bumping up our ratings slightly this morning.
Lennar Corporation is not recommended at this time, holding a Dividend.com DARS Rating of 2.9 out of 5 stars.
Goldman Sachs Upgrades Bank of America to 'Conviction Buy'
Investment bank Goldman Sachs upgraded banking giant
Bank of America Corporation
Monday morning from "neutral" to "buy," also adding the company to its "conviction buy" list.
Goldman said that it could take as little as a week for Bank of America to finish its $8.5 billion stock offering, which would quickly reduce the amount of dilutive effects on the company's shares. Goldman also pointed out that an ongoing preferred-for-common stock exchange could further reduce the share dilution.
Goldman went on to say that improving capital markets and a better mortgage refinancing environment could help Bank of America to earn as much as 25 cents per share for the current quarter. That sort of number would easily beat analysts' estimates for earnings of 1 penny per share.
Goldman also raised its year-end price target for BAC to $15 from $7, assuming that its common share count will rise to 9 billion shares from 6.4 billion after the new offering and the preferred conversion are completed. The investment bank said that the moves imply a 30% dilution.
Bank of America shares rose 89 cents, or +8.3%, in morning trading Monday.
We removed shares of BAC from our "Recommended" list on Sept. 15, when they were at $33.74. We had the shares briefly on our list from the $32.23 price point. The company has a .37% dividend yield, based on Friday's closing stock price of $10.67.
The stock has near-term technical support in the $7.50 price area. If the shares can firm up, we see overhead resistance around the $14 price level. We would remain on the sidelines for now.
Bank of America Corporation is not recommended at this time, holding a Dividend.com DARS Rating of 2.9 out of 5 stars.
State Street Books $3.7 Billion Loss, to Offer Stock and Senior Notes
State Street Corporation
said Monday that it will raise funds via a common stock and senior note offering in order to pay back the $2 billion in government TARP money it received.
The Boston-based company said it has already begun sale of $1.5 billion worth of common stock, and will also offer a separate round of senior notes in a large fund-raising campaign.
State Street also recorded a $3.7 billion after-tax loss related to mark-to-market losses on assets held in investment vehicles known as conduits. The loss is a result of consolidating these conduits. It forecast full-year 2009 operating earnings between $4.25 per share and $4.50 per share, not including the big one-time after-tax loss.
The bank recently passed the governmental "stress test," meaning that the federal government will not require the company to raise more federal money in order to stay solvent.
State Street shares fell 32 cents, or -0.8%, in premarket trading Monday.
We have avoided the shares of State Street since our early June coverage began, when shares were trading at the $68 level. The company has a dividend yield of .10%, based on Friday's closing stock price of $38.51.
The stock has near-term technical support in the $30 price area. If the shares are able to resume its recent big upswing, we see overhead resistance around the $43-$45 price levels. We would remain on the sidelines for now.
State Street Corporation is not recommended at this time, holding a Dividend.com DARS Rating of 3.2 out of 5 stars.
ITT Corp Reaffirms Full-Year Profit, Revenue Estimates
on Monday reaffirmed its 2009 full-year profit and revenue estimates, which fall within those of Wall Street analysts.
The White Plains, New York-based company said it still expects full-year 2009 profit of $3.20 and $3.60 per share, excluding tax effects and special one-time items. It also reaffirmed its expected revenue range of $10.6 billion to $11 billion.
On average, Wall Street analysts expect earnings of $3.43 per share on revenue of $10.8 billion, excluding items.
ITT had previously reduced its 2009 guidance in late April, saying that it was not optimistic about a turnaround in the industrial, commercial and auto markets this year.
ITT shares rose 31 cents, or +0.76%, in morning trading Monday.
We had removed shares of ITT from our "Recommended" list on Sept. 9, when the stock traded at $61.73. The company has a 2.08% dividend yield, based on Friday's closing stock price of $40.77.
The stock has technical support at the $35 price level. If the shares can firm up, we see overhead resistance around the $48-$50 price levels. We would remain on the sidelines for now.
ITT Corporation is not recommended at this time, holding a Dividend.com DARS Rating of 3.1 out of 5 stars.
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At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.
Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.