Analysts' Actions: Alaska Air, Eaton, Twitter, United Continental

NEW YORK (TheStreet) -- RATINGS CHANGES

Advent Software (ADVS) was upgraded to buy at TheStreet Ratings.

American Capital Agency (AGNC) was downgraded at UBS to neutral from buy. Twelve-month price target is $22. Book value expected to go down as interest rates rise, UBS said.

Alaska Air (ALK) was downgraded at J.P. Morgan to neutral from overweight. Twelve-month price target is $53.50. Relative valuation call, as the company is facing increased competition, J.P. Morgan said.

CH Robinson (CHRW) was upgraded at Bank of America/Merrill Lynch to neutral from underperform. Twelve-month price target is $68. Net revenue margins have inflected, BofA/Merrill said.

Eaton (ETN) was downgraded at Deutsche Bank to hold from buy. Twelve-month price target is $77. Estimates were also cut, given slower expected sales growth, Deutsche Bank said.

Eaton was downgraded at J.P. Morgan to neutral from overweight. Valuation call, based on a 12-month price target of $75, J.P. Morgan said.

FirstEnergy (FE) was downgraded at UBS to sell from neutral. Twelve-month price target is $26. Rally in power and gas has faded and company's debt drags, UBS said.

LM Ericcson (ERIC) was upgraded to buy at TheStreet Ratings.

Frontier (FTR) was downgraded at Nomura to neutral from buy. Valuation call, based on a 12-month price target of $7.50, Nomura said.

Invensense (INVN) was upgraded at Ascendiant to buy. Twelve-month price target is $29. Company has demonstrated growth leverage across the entire OEM spectrum, Ascendiant said.

Michael Kors (KORS) was downgraded at Robert Baird to neutral from outperform. Twelve-month price target is $98. Company is facing increased sales and margin risks in North America, Robert Baird said.

Level 3 (LVLT) was downgraded at DA Davidson to neutral. Valuation call, based on a $50 price target, DA Davidson said.

National Oilwell Varco (NOV) was downgraded at Jefferies to hold from buy. Twelve-month price target is $91. Much of the company's intrinsic value has been realized, Jefferies said.

Oshkosh (OSK) was upgraded at Robert Baird to outperform from neutral. Twelve-month price target is $55. Stock is pricing in business risks, Robert Baird said.

Twitter (TWTR) was upgraded at Bank of America/Merrill Lynch to buy from neutral. Investor sentiment appears to have reached an inflection point, BofA/Merrill said. Twelve-month price target is $60.

Twitter was upgraded at UBS to neutral from sell. Twelve-month price target is $50. Estimates were also raised due to solid operating metrics and headline engagement, UBS said.

United Continental (UAL) was upgraded at J.P. Morgan to overweight from neutral. Company can improve its lagging operating margin by 2015, J.P. Morgan said. Twelve-month price target is $60.50.

Windstream (WIN) was upgraded at Nomura to neutral from reduce. Twelve-month price target is $13. REIT transaction will create shareholder value, Nomura said.

Windstream was upgraded at UBS to neutral from sell. Twelve-month price target is $11. Downside risk of dividend cut has been taken out by REIT spinoff, UBS said.

Windstream was upgraded at DA Davidson to buy from neutral. Twelve-month price target is $14.50. REIT opportunity should boost value, DA Davidson said.

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Now let's look at TheStreet Ratings' take on some of these stocks.

TheStreet Ratings team rates UNITED CONTINENTAL HLDGS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNITED CONTINENTAL HLDGS INC (UAL) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • UNITED CONTINENTAL HLDGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, UNITED CONTINENTAL HLDGS INC turned its bottom line around by earning $1.30 versus -$2.32 in the prior year. This year, the market expects an improvement in earnings ($4.20 versus $1.30).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Airlines industry average. The net income increased by 68.2% when compared to the same quarter one year prior, rising from $469.00 million to $789.00 million.
  • The revenue growth significantly trails the industry average of 39.3%. Since the same quarter one year prior, revenues slightly increased by 3.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 66.11% and other important driving factors, this stock has surged by 28.45% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • The gross profit margin for UNITED CONTINENTAL HLDGS INC is currently lower than what is desirable, coming in at 27.53%. Regardless of UAL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, UAL's net profit margin of 7.63% compares favorably to the industry average.

TheStreet Ratings team rates EATON CORP PLC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate EATON CORP PLC (ETN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ETN's revenue growth has slightly outpaced the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 3.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • EATON CORP PLC has improved earnings per share by 16.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EATON CORP PLC increased its bottom line by earning $3.90 versus $3.51 in the prior year. This year, the market expects an improvement in earnings ($4.75 versus $3.90).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Electrical Equipment industry average. The net income increased by 16.1% when compared to the same quarter one year prior, going from $378.00 million to $439.00 million.

This article was written by a staff member of TheStreet.

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