KLA-Tencor ( KLAC) downgraded at Friedman Billings Ramsey to Market Perform from Outperform. See lower bookings in Sept quarter and flat-to-down bookings post-March quarter 2008, driven by weakness in memory-related bookings. 2008 estimates cut to $3.50 from $3.86. Price target at $64. Lehman Brothers ( LEH) upgraded at Credit Suisse to Outperform from Neutral. Sees improved performance prospects and likelihood of multiple expansion. Maintained $85-$90 target price range. Nabors Industries ( NBR) downgraded at Merrill Lynch to Neutral. Estimates also cut, to reflect the company's latest pre-announcement. Merrill Lynch ( MER) downgraded at JP Morgan from Overweight to Neutral. Lower market appetite for risk could weigh on the company's near-term growth. Estimates also cut to reflect management's new guidance. Merrill Lynch downgraded at Credit Suisse to Neutral from Outperform. After revaluation following third-quarter preannouncement, firm lowers target price to $85 from $95. Occidental Petroleum ( OXY) downgraded from Market Perform to Underperform at Friedman, Billings Ramsey. Crude oil prices are due for a 10% pullback in the near term. Proctor & Gamble ( PG) downgraded at SunTrust Robinson Humphrey to Neutral from Buy based on valuation. With stock up 16% in past 3 months, see shares fairly valued based on solid core operations and margin benefits following integration of Gillette. Target remains $70. Progressive ( PGR) downgraded at Wachovia from Market Perform to Underperform. Valuation call, as the stock trades at a hefty premium to its peers. Shares could fall to the $16 to $18 range.
Sovereign Bancorp ( SOV) downgraded at Friedman, Billings Ramsey from Outperform to Underperform. The company has outsized exposure to consumer loans. $14 price target. Sunoco ( SOV) upgraded at Citigroup to Buy. Company should be a major beneficiary of the increased spread with ethanol prices. $90 price target. Supertex ( SUPX) upgraded at Oppenheimer to Buy. $55 price target. Company should see all segments rebound after three soft quarters where inventory was building up. Talbots ( TLB) downgraded from Market Perform to Underperform at Friedman, Billings Ramsey. Both divisions are seeing weak traffic, and will likely have to increase promotions. Debt-laden balance sheet also adds risk to the model. Valero ( VLO) upgraded at Citigroup to Buy. Company has locked in higher prices with contracts, and has significant upside potential. $82 price target.