NEW YORK (TheStreet) -- RATINGS CHANGES
American Electric (AEP) was downgraded to equal weight at Morgan Stanley. $52 12-month price target. This was a valuation call, as the stock has outperformed over the past year, Morgan Stanley said.
Arthur J Gallagher (AJG) was upgraded to buy from hold at Deutsche Bank. $53 12-month price target. The company is leveraged to an inflection in the pricing cycle, Deutsche Bank said.
Armstrong World (AWI) was upgraded to neutral from underweight at JP Morgan. The stock has lagged its peers year-to-date, but activist presence should place a floor on valuation, JP Morgan said.
Chevron (CVX) was downgraded to equal weight from overweight at Morgan Stanley. $140 12-month price target. Expect that production will be flat in 2015, Morgan Stanley said.TheSteet's Susannah Lee has Monday's Analysts' Actions:
Domino's Pizza (DPZ) was upgraded to buy from hold at Miller Tabak. $81 12-month price target. The company is raising prices and focusing on convenience and product quality, Miller Tabak said.
Expedia (EXPE) was upgraded to buy at TheStreet Ratings.
Halcon (HK) was downgraded to underweight at Morgan Stanley. This was a valuation call, as the stock has outperformed by 40% year-to-date, Morgan Stanley said. $4 12-month price target.
Oil States (OIS) was upgraded to outperform from neutral at Credit Suisse. $72 12-month price target. Spin has created a good company with a solid management team, Credit Suisse said.
Occidental Petroleum (OXY) was upgraded to overweight from equal weight at Morgan Stanley. $120 12-month price target. The stock has lagged, but management will be buying back more shares, Morgan Stanley said.
Pacific Ethanol (PEIX) was upgraded to buy at TheStreet Ratings.
Transocean (RIG) was downgraded to sell from hold at Deutsche Bank. $27 12-month price target. Markets are likely to remain under pressure and the company will likely have to cut its dividend, Deutsche Bank said.
RPX (RPXC) was downgraded to equal weight from overweight at Barclays. This change reflects 3Q guidance and revenue uncertainty, Barclays said. $17 12-month price target.
Steel Dynamics (STLD) was upgraded to buy from hold at Keybanc. $28 12-month price target. Recent acquisitions should boost growth and the company is leveraged to positive industry trends, Keybanc said.
Target (TGT) was upgraded to buy at TheStreet Ratings.
U.S. Steel (X) was upgraded to buy from hold at Deutsche Bank. $40 12-month price target. The company boosted its guidance, Deutsche Bank said.
U.S. Steel (X) was upgraded to buy from hold at Keybanc. $48 12-month price target. Demand is improving and the company should benefit from better domestic sheet pricing, Keybanc said.
Editor's note: To see analysts' stock comments and changes to price targets and earnings estimates, go to "Street Notes" which is available only to Real Money subscribers. To find out how to become a subscriber, please click here.
TheStreet Ratings team rates UNITED STATES STEEL CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNITED STATES STEEL CORP (X) 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 solid stock price performance, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and generally higher debt management risk."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 77.77% and other important driving factors, this stock has surged by 93.02% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Net operating cash flow has significantly increased by 418.54% to $783.00 million when compared to the same quarter last year. In addition, UNITED STATES STEEL CORP has also vastly surpassed the industry average cash flow growth rate of -23.29%.
- UNITED STATES STEEL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNITED STATES STEEL CORP reported poor results of -$11.68 versus -$0.97 in the prior year. This year, the market expects an improvement in earnings ($1.04 versus -$11.68).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, UNITED STATES STEEL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for UNITED STATES STEEL CORP is currently extremely low, coming in at 3.14%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -0.40% is significantly below that of the industry average.
- You can view the full analysis from the report here: X Ratings Report
TheStreet Ratings team rates TARGET CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TARGET CORP (TGT) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TGT's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.85, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- TARGET CORP's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, TARGET CORP reported lower earnings of $3.07 versus $4.53 in the prior year. This year, the market expects an improvement in earnings ($3.66 versus $3.07).
- The change in net income from the same quarter one year ago has exceeded that of the Multiline Retail industry average, but is less than that of the S&P 500. The net income has decreased by 16.1% when compared to the same quarter one year ago, dropping from $498.00 million to $418.00 million.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, TGT has underperformed the S&P 500 Index, declining 16.37% from its price level of one year ago. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.
- You can view the full analysis from the report here: TGT Ratings Report