Change in Ratings Apple ( AAPL) upgraded at JP Morgan to Overweight from Neutral. Lowered 2009 EPS estimates to $5.27 from $6.02 and believes model has staying power despite macro risks. ADP ( ADP) rated new Neutral at Credit Suisse. Cites robust business model with strong management team but believes company is fairly valued. Sets $40 target price. Abercrombie & Fitch ( ANF) upgraded at Credit Suisse to Outperform from Neutral based on valuation and significant longer-term growth opportunities. Lowered target price to $40 from $55. Bill Barrett ( BBG) downgraded to Neutral from Buy at Merrill with a $26 price target. Merrill notes that company has an increased sensitivity to a higher discount rate as lower margins reduce the value of future gas given exposure to the Rockies. This region's prices are significantly lower than the rest of the country. Delta Petroleum ( DPTR) also downgraded. Berry Petroleum ( BRY) upgraded to Neutral from Underperform at Merrill with a price target of $28. Merrill notes that the stock now trades at $1.51/Mcfe (vs. peer avg. of $3.10), a level not seen since 2004 when oil prices were $40/barrel and gas prices were $6/Mcf. Capital Product Partners ( CPLP) upgraded to a Buy from Neutral at Merrill. Price target reduced to $12 from $17. Price target reduction due to an expected lack of access to capital, which will stunt industry growth, wider credit spread demands owing to increased market risk premium, and increased risk of a charter default due to higher credit concerns. Dell ( DELL) downgraded at JP Morgan to Neutral from Overweight. Cites PC exposure and fine-tuning could hurt growth profile.
DHT Martime ( DHT) upgraded to Neutral from Underperform at Merrill and price target reduced to $5.50 from $9.50. Merrill believes tanker rates have remained strong as the tanker orderbook of 46% of existing capacity is getting squeezed by the credit crises. Price target reduction due to an expected lack of access to capital which will stunt industry growth, wider credit spread demands owing to increased market risk premium, and increased risk of a charter default due to higher credit concerns. Genentech ( DNA) upgraded at Piper Jaffray to Buy based on valuation, regardless of Roche bid. Concerns over Roche's ability to finance acquisition have brought shares below target price, creating opportunity. Note mid-2009 timeframe for update on Avastin in adjuvant colon cancer. Price target at $96. eBay ( EBAY) downgraded to Underperform from Neutral at Merrill Lynch with $19 price target. Merrill expects eBay to underperform the group as the sector rebounds. Analyst does not expect a positive result in 3Q or 4Q guidance. General Mills ( GIS) upgraded at JP Morgan to Overweight from Neutral. See upside opportunities due to position in growth categories such as cereal, yogurt and snacks. Believe company offers best fundamentals in peer group, and note market share gains in cereal. Price target at $78. IBM ( IBM) upgraded at JP Morgan to Overweight from Neutral based on diverse revenue and annuity-based model. See some protection from macroeconomic conditions based on broad reach in services, hardware and software, as well as limited exposure to retail consumers.
Lexmark ( LXK) downgraded at JP Morgan to Underweight from Neutral. Note that IT spending on imaging and printing was first sector to exhibit softness during last downturn. Also see uncertainty due to turnaround efforts. NetApp ( NTAP) downgraded at JP Morgan to Neutral from Overweight due to macroeconomic pressures and customer exposure to financial services. Note that company may have to increase R&D spending to gain traction in SAN market. Smurfit-Stone ( SSCC) downgraded at Goldman Sachs to Neutral from Buy due to expectation that October containerboard price increases will not be successfully implemented. Price target slashed to $3 from $8. STMicroelectronics ( STM) downgraded to Underperform from Buy at Merrill and price target reduced to 6.9 euros. Merrill believes 2009 consensus estimates do not reflect the company's broad-based consumer exposure. Merrill expects further revenue weakness caused by the lower mix in automotive sales and a slower migration to large screen televisions. Company reports Q3 results on Oct. 28 after the U.S. market closes. Merrill expects an in-line quarter but weak guidance. Stock Comments/EPS Changes Intel ( INTC) price target cut at Goldman to $18 from $27 based on lower 2009 earnings estimates and reduced multiple. Note concerns over potential margin contraction, as company is operating at peak margins heading into a weakening macro environment. Maintained Buy rating. Ingersoll-Rand ( IR) estimates and price target reduced at Merrill. Company lowered earnings guidance due to faster-than-expected deterioration in Western Europe and weak North America. Merrill reducing 2009 EPS estimate to $3.47 from $3.88 and price target reduced to $31 from $35.
Ingersoll-Rand numbers lowered at UBS. 2008 EPS estimates lowered to $3.45 from $3.85. Price target lowered to $24 from $32. Maintains Neutral rating. Johnson & Johnson ( JNJ) price target lowered at UBS to $70 from $77. 2008 EPS estimates raised. Maintains Neutral rating. Las Vegas Sands ( LVS) price target lowered at Jefferies to $72 from $78. 2008 EPS estimates raised to $0.32 from $0.30. Maintains Buy rating. MGM Mirage ( MGM) numbers lowered at Jefferies. Price target lowered to $70 from $74. 2008 EPS estimates lowered to $1.54 from $1.59. Maintains Buy rating. United Technologies ( UTX) numbers lowered at UBS. Fiscal 2009 EPS estimates lowered to $5.25 from $5.50. Price target lowered to $73 from $77. Maintains Buy rating. Wynn Resorts ( WYNN) numbers lowered at Jefferies. Price target lowered to $91 from $105. 2008 EPS estimates lowered to $3.28 from $3.55. Maintains Buy rating.