CHANGE IN RATINGSCA ( CA) downgraded at RBC to sector perform from outperform and price target reduced to $20 from $24. Over the next several quarters, RBC believes that investors will shift to more growth names over defensive software stocks, which will likely limit CA's multiple expansion. Covance ( CVD)downgraded at Goldman Sachs to Neutral from Buy due to ongoing weakness in preclinical industry demand. See company as well-positioned long-term but also believe current consensus estimates are too high. Price target trimmed to $40 from $43.
Kohl's ( KSS) upgraded at Jefferies to Buy from Hold. Sees possible upside to margin guidance and believes sales will benefit from Mervyn's store closures. Raised target to $44 from $36. Liberty Global ( LBTYA) upgraded to Equal Weight at Morgan Stanley and $19 price target removed. Still cautious about LBTYA's exposure to Eastern Europe as well as potential margin compression in 2009-2010, but that's already priced in. LBTYA now trades in-line with similarly levered cable names TWC & CVC on both EV/ EBITDA and EV/ unlevered FCF relative, and at a slight premium to CMCSA. Further, LBTYA has no meaningful maturities until '11 and MS believes it is more likely to hit guidance than it was in '08 with potential upside from stabilizing competition. McKesson ( MCK) upgraded at Citigroup to Buy. Stock is already discount lower pharmacy margins. Morgan Stanley ( MS) downgraded at Merrill/BofA to Underperform. Stock is up 40% over the past week. Estimates also cut, to reflect real estate and private equity markets. New $21 price target. Resmed ( RMD) downgraded at Wachovia. Rating lowered to Market Perform from Outperform. Valuation range lowered to $34-$38 from $42-$46. 2009 EPS estimates lowered to $1.83 from $1.87. Strayer Education ( STRA) upgraded at Piper Jaffray to Buy from Neutral based on valuation and healthy enrollment growth. Maintained $186 target price.
STOCK COMMENTS / EPS CHANGESCisco ( CSCO) added to Goldman's Conviction Buy List based on upside from Unified Computing System (UCS) launch. UCS should unlock a larger addressable market and generate higher long-term growth. Also note upside to near-term consensus estimates based on resilience of CIO spending relative to overall decline in IT spending. Price target raised to $18 from $16.50.
Hertz ( HTZ) 2009 estimate cut to weaker demand, target lowered at Barclays Capital. Costs remain high and liquidity pressures are looming. Equal-weight rating and new $4 price target. Illinois Tool Works ( ITW) numbers reduced at UBS through 2010. Company is seeing significantly weaker end-market demand. Buy rating and new $31 price target. Illinois Tool Works ( ITW) estimates cut at Barclays through 2010. Company seeing revenues down at least 20% year-over-year, and the dividend could come under pressure. Underweight rating and $25 price target. Oracle ( ORCL) estimates, target reduced at Jefferies to $18. Estimates also cut, to reflect weaker technology and application license sales. Buy rating. Petrobras ( PBR) target cut at Credit Suisse to $26 from $28 based on lower oil assumptions. Maintained Neutral rating. Molson Coors ( TAP) cut from Conviction Buy List at Goldman. Stock has come under pressure as competition has picked up in Canada, and lacks near-term catalysts. $46 price target.