Eli Lilly downgraded at Morgan Stanley from equalweight to underweight and lowers price target from $61 to $51. Eli Lilly price target trimmed at Goldman to $61 from $65 after company announced that two small studies have been suspended, suggesting a smaller market opportunity and delay. See potential weakness if product fails in TRITON trial, and increased risk around prasugrel. Maintained Buy rating. Masco ( MAS) downgraded at Morgan Stanley from equalweight to underweight. Moody's ( MCO) 2007 estimates cut at FBR by 15 cents to $2.40 a share following disappointing Q3 report and future outlook. Maintained Outperform rating. Moody's downgraded at JP Morgan from Neutral to Underweight. Certain areas of structured finance are not likely to recover in the near term. Estimates also cut. Meredith ( MDP) upgraded at JP Morgan from Neutral to Overweight. WMT licensing deal could add another 14% to market value. Solid near-term execution also driving core earnings growth. Merrill Lynch ( MER) downgraded at UBS to Neutral rating from Buy. Price target dips to $70 from $86 and FY08 EPS estimates drop to $7.00 from $7.85. Merrill Lynch downgraded at Wachovia to Market Perform. Expect senior management turnover and compensation pressures to continue to weigh on the stock. Estimates also lowered. Merrill Lynch downgraded at Bernstein to Market Perform. $78 price target. Company is lacking sufficient risk management. Estimates also lowered, to reflect continued CDO and sub-prime mortgage exposure.
Merrill Lynch 2007 estimates slashed at Goldman to $1.24 from $6.00. Note surprise that Merrill had $32 billion in CDO exposure in Q2, and believe additional write-downs will be necessary given remaining exposure. Price target cut to $79 from $92. Maintained Neutral rating. Motorola ( MOT) upgraded at Oppenheimer from Neutral to Buy. $23 price target. Stock is attractive on a free cash flow and EV/Sales basis. Improvements in the mobile device portfolio should also help drive 2008 results. National Oilwell Varco ( NOV) downgraded at Credit Suisse to Neutral from Outperform based on valuation. Cites stock is up 140% in the last year compared to 53% for the OSX. Raised target price to $85 from $69.50. Palm ( PALM) downgraded at Bear Stearns from Peer Perform to Underperform. Valuation call, as the fair value of the stock following the distribution will likely be $5 to $6. Pacific Sunwear ( PSUN) upgraded at Citigroup from Hold to Buy. $19 price target. Sale of the underperforming demo division along with improving product execution at core stores could drive accelerating earnings growth. Praxair ( PX) downgraded at Merrill Lynch to Neutral. Valuation call, as the stock trades at a record 45% premium to the market multiple. Spirit Aerosystems ( SPR) coverage initiated at Deutsche Bank with a Hold rating and a $36 target price. 787 program delays have created uncertainty.
Symantec ( SYMC) downgraded at Baird from Outperform to Neutral. $22 price target. Company's December quarter guidance was disappointing, and there's further downside potential to 2008 numbers. Talbots ( TLB) upgraded at Citigroup from Sell to Hold. Stock is down 40% for the year, and is discounting the company's cautious outlook. $16 price target. UAL ( UAUA) downgraded at JP Morgan to Neutral. Stock has outperformed its peers, but AMR and DAL are better capitalized if competition heats up.
General Dynamics ( GD) numbers raised at Jefferies. Price target lifts to $102 from $97 and FY 2008 EPS estimates upped to $5.80 from $5.70. Reiterates Buy rating. Northrop Grumman ( NOC) numbers raised at Jefferies. Price target lifts to $87 from $75 and FY 2008 EPS estimates upped to $5.85 from $5.50. Reiterates Buy rating. VMWare ( VMW) numbers raised at UBS. Price target lifts to $130 from $120 and FY08 EPS estimates upped to $0.67 from $0.54. Reiterates Buy rating. VMware 2008 estimates increased at Deutsche Bank by 19 cents to $1.15 a share following blowout quarter. Maintained Hold rating.