Change in Ratings

Goldman Sachs said it is downgrading ArvinMeritor ( ARM) to Neutral from Buy based on deteriorating outlook for commercial vehicle markets in Europe and North America. 2009 estimates cut to $1.46 from $2.19 and price target lowered to $8 from $19.

Goldman Sachs said it is upgrading BorgWarner ( BWA) to Buy from Neutral based on expectations for increased fitment of fuel economy technologies. Note low leverage, stable cash flow and diversified customer base. Price target lowered to $26 from $40.

Coinstar ( CSTR) was upgraded at Goldman Sachs to Neutral from Sell. Note modest valuation of 6x EBITDA and believe most major negatives are priced into shares. Price target lowered to $27 from $32.

Foot Locker ( FL) was upgraded at Citigroup from Hold to Buy. $17 price target. Company is facing easy comps over the next two quarters, and should realize higher ASP's.

Goldman said it is downgrading Johnson Controls ( JCI) to Neutral from Buy due to potential weakness in Building Efficiency and Automotive units. See lower automotive production in Europe and North America through 2010.

Juniper Networks ( JNPR) was upgraded at UBS to Buy from Neutral. 2008 EPS estimates lowered to $1.04 from $1.03. Maintains price target of $21.

Kraft Foods ( KFT) was upgraded at Merrill Lynch from Neutral to Buy. $33 price target. 2009 should be an inflection point in the company's earnings, based on the company's aggressive turnaround plan.

Macy's ( M) was upgraded at JP Morgan from Neutral to Overweight. Fundamentals remain stressed, but there is likely limited downside potential to 2009 earnings estimates. Liquidity fears are also unwarranted.

Masco ( MAS) was upgraded at UBS to Neutral from Sell. 2008 EPS estimates lowered to $0.55 from $0.65. Price target lowered to $13 from $15.

Merck ( MRK) was upgraded at UBS to Buy from Neutral. Price target lowered to $26 from $28. Maintains 2008 EPS estimates of $3.30.

Sunpower ( SPWRA) was downgraded from Buy to Neutral, Merrill Lynch said. $55 price target. Expectations for US demand of solar could be too high.

SunPower also received a downgrade at Citigroup from Hold to Sell. Stock gained 25% after the earnings report, and inventory risk could cause first quarter results to fall short of expectations.

UnitedHealth ( UNH) was upgraded at Goldman Sachs to Buy from Neutral following solid Q3 earnings and improving view of 2009 industry trends. Expect only modest margin downside next year thanks to firmer pricing and note no asset impairment risk. Price target raised to $31 from $24.

Watsco ( WSO) was upgraded from Neutral to Buy, Piper Jaffray said. $45 price target. Stock is down 40% over the past month, and should be an early-cycle beneficiary. Cost-cutting should also help margins in the long run.

Wyeth ( WYE) was upgraded at UBS to Buy from Neutral. Price target raised to $42 from $38. Maintains 2008 EPS estimates of $3.54.

Action Alerts PLUS

Stock Comments/EPS Changes

Baxter International ( BAX) price target lowered at UBS. Price target lowered to $70 from $80. 2008 EPS estimates raised to $3.37 from $3.30. Maintains Buy rating.

Credit Suisse said it is lowering its target price on Caterpillar ( CAT) to $46 from $66 based on overall global slowdown. Also sees risk to order book as emerging/commodity markets weaken. Maintained Neutral rating.

Credit Suisse said it is lowering its target price on CIT Group ( CIT) to $12 from $14 based on a modest decline in managed assets, lower finance margin and continued expense reductions. Maintained Outperform rating.

Gilead Sciences ( GILD) price target lowered at Jefferies to $50 from $55. 2008 EPS estimates raised to $2.04 from $2.00. Maintains Hold rating.

Google ( GOOG) price target lowered at Jefferies to $551 from $600. 2008 EPS estimates raised to $19.62 from $19.32. Maintains Buy rating.

At UBS, Google price target was raised to $540 from $525. 2008 EPS estimates raised to $19.80 from $19.18. Maintains Buy rating.

Credit Suisse said it is reducing its target price on Parker Hannifin ( PH) to $44 from $61 based on slowdown in overseas market and limited visability. Maintained Neutral rating.

Biotech Select

Reliance Steel ( RS) numbers lowered at Jefferies. Price target lowered to $25 from $75. 2008 EPS estimates lowered to $6.91 from $7.00. Maintains Hold rating.

Textron ( TXT) numbers lowered at UBS. Price target lowered to $21 from $46. 2008 EPS estimates lowered to $3.61 from $3.80. Maintains Neutral rating.
This article was written by a staff member of TheStreet.com.

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