Citigroup upgraded shares of Amgen Inc. (NASDAQ: AMGN) to Buy from Hold and raised the target price to $70 from $50 following AMGN's better-than-expected Q2 results and positive Dmab results.
Credit Suisse upgraded Electronic Data Systems (NYSE: EDS) to Neutral from Underperform and expects the Hewlett-Packard (NYSE: HPQ) transaction to close at the $25/share price.
Analyst downgrades:
JP Morgan downgraded OmniVision (NASDAQ: OVTI) to Neutral from Overweight citing slowing growth and increased competition, as well as the impact on margins.
KeyBanc said Visa's (NYSE: V) strengths are its recurring revenue model, significant pricing power, no consumer credit risk, operating leverage, expense flexibility, and considerable free cash flow, among other reasons. The firm initiated shares with a Buy rating and $94 target.
Regal Entertainment (NYSE: RGC) was assumed at Caris with an Average rating and $18 target. The firm sees tough comps ahead for the company and does not expect any meaningful price increases.
Caris also initiated Marvel Entertainment (NYSE: MVL), as they are positive on the company's new financing vehicle. Shares were initiated with a Buy rating and $45 target.
The earnings season continues to roll on, and next week's results offer a peek at the state of fashion retailing, as a variety of companies -- from the discount to the upscale, from the hip to the pedestrian -- are scheduled to report earnings.
Analysts surveyed by Thomson Financial expect earnings growth, compared to the same period in the previous year, from Urban Outfitters (NASDAQ: URBN) to be 22.7% to 22 cents per share, from Wal-Mart Stores (NYSE: WMT) to be 9.3% to 75 cents per share, and from TJX Companies (NYSE: TJX) to be 7.5% to 40 cents per share.
Analysts expect earnings declines from the previous year from JC Penney (NYSE: JCP) by 52.9% to 49 cents per share, from Kohl's (NYSE: KSS) by 34.4% to 42 cents per share, and from Nordstrom (NYSE: JWN) by 18.3% to 49 cents per share.
In the case of Abercrombie & Fitch (NYSE: ANF), analysts expect earnings to remain flat, year over year, at 65 cents per share.
And then there's Macy's (NYSE: M), which is expected to swing to a loss of 2 cents per share, compared to a profit of 16 cents a year ago.
The sample size may be too small to define any significant trends, but the numbers do suggest that analysts expect profit declines to be deeper than profit growth, and that consumers may be more likely, given the current state of the economy, to buy clothes at Wal-Mart or TJ Maxx than at Nordstrom or Abercrombie.
The coming results will reveal if those expectations are correct.
MOST NOTEWORTHY: Southwest Gas, Hittite Microwave and Repsol SA were today's noteworthy upgrades:
Citigroup upgraded shares of Southwest Gas (NYSE: SWX) to Buy from Hold on valuation, as they believe the company's fundamentals have improved enormously over the last three years.
Thomas Weisel upgraded shares of Hittite Microwave (NASDAQ: HITT) to Overweight from Market Weight, as they believe the company is executing on its strategy of increasing new product introductions and growing its global sales efforts. They believe shares are undervalued and maintain a $43 target.
Repsol SA (NYSE: REP) was raised to Buy from Hold at Deutsche Bank as they expect good news to flow in 2008.
OTHER UPGRADES:
Goldman upgraded CNOOC (NYSE: CEO) to Buy from Neutral and added shares to their Conviction Buy List.
Urban Outfitters (NASDAQ: URBN) was raised to Equal Weight from Underweight at Morgan Stanley.
Urban Outfitters Inc. (NASDAQ: URBN) shares opened higher this morning but have slipped throughout the day after the company posted a fourth-quarter profit of $53.6 million, or 32 cents per share, helped by fewer markdowns and increased same-store sales. Analysts had been expecting URBN to post a profit of 29 cents per share. Today's weakness could be attributed to some bad retail reports from other companies, but comparatively, URBN's performance today is not too bad. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on URBN.
After hitting a one-year low of $19.20 in July, the stock hit a one-year high of $31.32 in just this past month. URBN opened this morning at $30.01. So far today the stock has hit a low of $28.94 and a high of $30.45. As of 12:30, URBN is trading at $29.01, down $0.33 (1.1%). The chart for URBN looks bullish and deteriorating slightly, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.
The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth evaluating is Urban Outfitters.
Urban Outfitters, Inc. (Nasdaq: URBN) operates more than 120 specialty retail stores under the Urban Outfitters, Anthropologie, and Free People brands, and also offers clothes via a wholesale division under the Free People label.
Analysts like the fact that URBN carries in-demand, self-expressive merchandise, with differentiated retail brands. Most analysts believe the company has achieved a retail gold star: a unique brand position in the ages 18-24 customer category. Moreover, a relatively high 50/50 private label/nation brand inventory lowers inventory risk.
Sales increased an impressive 23% in FY 2008, with analysts seeing a 20-25% rise in FY 2009. Operating costs are reasonable. The Reuters FY 2008/FY 2009 EPS consensus estimates for URBN are $0.90 to $1.15.
MOST NOTEWORTHY: Coca-Cola, Novo Nordisk and Equinix were today's noteworthy upgrades:
Bear Stearns upgraded The Coca-Cola Company (NYSE: KO) to Outperform from Peer Perform, as they expect it to post solid earnings short-term with potential upside, and over the long-term due to its upgraded business model.
Bernstein raised its rating on Novo Nordisk AS (NYSE: NVO) to Outperform from Market Perform, as they believe consensus estimates do not reflect the company's growth potential.
Merriman upgraded shares of Equinix Inc (NASDAQ: EQIX) to Buy from Neutral on valuation following the recent sell-off. The firm expects strong Q4 results.
There are those who counterfeit money and those who make near-perfect knockoffs of 21 different Microsoft programs. Well, Microsoft Corp. (NADSAQ: MSFT) pushed an investigation through 22 countries and local law enforcement officials seized software, equipment and records, and made arrests. Microsoft estimates the retail value of the software the operation generated at $900 million.
The buzz over the $44.6 billion unsolicited bid Microsoft made for Yahoo! Inc. (NASDAQ: YHOO) is far from over with new items as well as speculations coming daily. The Financial Times reports that Softbank yesterday said it had no intention of selling its 41% stake in Yahoo Japan. Meanwhile, Trip Chowdhry of Global Equities Research speculated Thursday that Microsoft made the stunning proposal as a way to block a possible alliance between Yahoo and Amazon.com, Inc. (NASDAQ: AMZN).
The Wall Street Journal reports that federal prosecutors, looking into the mortgage businesses, have asked the Securities and Exchange Commission for information on Merrill Lynch & Co. (NYSE: MER).
TheStreet.com's Jim Cramer says this stock won't quit, and it's beyond Bernanke's reach.
Urban Outfitters (NASDAQ: URBN) (Cramer's Take) is absolutely doing it right. This morning on "Squawk Box," I got to talking with Brad Stevens from Morgan Keegan and it hit me: URBN is making it because it is selling where the others guys aren't.
That makes for secular growth, not cyclical growth, and that also makes for a stock that won't quit.
There's a brand-new Urban Outfitters coming up in Brooklyn, and I think this will be a reminder when it opens in March that some chains are not going to be hostage to Bernanke. This is one of them.
Exciting stock for this environment and a way to shake off the Cisco (NASDAQ: CSCO) (Cramer's Take) blues.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.
MOST NOTEWORTHY: Synthesis Energy, Lamar Advertising and Urban Outfitters were today's noteworthy initiations:
Merriman believes Synthesis Energy Systems Inc (NASDAQ: SYMX) is well-positioned as it begins to leverage its exclusive global license for U-GAS technology and commences the deployment of its coal-to-methanol production facilities in China. The firm started shares with a Buy rating.
Lamar Advertising Company (NASDAQ: LAMR) was initiated with a Buy rating and $51 target at Jefferies, as they believe shares are oversold at current levels.
William Blair believes Urban Outfitters Inc (NASDAQ: URBN) will benefit from both strong sales and a steep margin recovery in the coming two years. The firm assumed coverage of Urban with an Outperform rating.
OTHER INITIATIONS:
Lehman started United Rentals Inc (NYSE: URI) with an Equal Weight rating and $22 target.
After hitting a one-year low of $19.20 in July, the stock has hit a new one-year high today. URBN opened this morning at $24.60. So far today the stock has hit a low of $24.60 and a high of $25.36. As of 10:55, URBN is trading at $25.00, up $1.01 (4.2%). The chart for URBN looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
TheStreet.com's Jim Cramer says that next to the consumer, this is the biggest problem facing the otherwise strong companies in this sector.
Doesn't it seem like another day where it is impossible to make money? We have earnings season without any sense that anybody's numbers can be raised. We have an ennui that comes from months of pounding and indecision, and we have stocks that can't seem to go up to save their lives.
True Religion Apparel (NASDAQ: TRLG) is one of those companies that has a core cult following of investors, and it nearly defies logic. The company sells $200 and $300 blue jeans, among other apparel, has its own stores and also sells through key retailers like Urban Outfitters (NASDAQ: URBN), Neiman Marcus, Barneys, and other upscale retailers.
Shares are up big today, at $22.53 as of 10:20, and this more than 10% post-earnings move could get the stock within striking distance of its all-time highs from 2006. The company posted $0.21 net and $0.25 non-GAAP EPS on revenues of $35.7 million. Analysts were looking for $0.26 non-GAAP EPS and $35.7 million in revenues, according to First Call.
The company plans to add to its eight branded stores, increasing to fifteen stores by year end. The company is maintaining strong guidance for 2007, with $1.24 to $1.27 EPS and maintained about $167 million in revenue projections. First Call has estimates of $1.25 EPS and $166 million in revenues. This has been a stock that many short sellers have attacked, because after all, it sells $300 jeans.
This one has been shocking when you consider what the company does. It has a $500 million market cap. It has seen management infighting over a divorce that resulted in large share sales. Many on Wall Street think it is a prime short sale candidate. It hasn't been able to find a buyer. And it sells $300 jeans. Yet here it is, up over 10% and close to a year-high again.
Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
MOST NOTEWORTHY: Pearson (PSO), Verizon Communications (VZ), Ship Finance (SFL) and ValueClick (VCLK) were today's noteworthy upgrades:
Pearson (NYSE: PSO) was upgraded to Equal Weight from Underweight at Lehman to reflect the better than expected interim results and an improved competitive landscape in the core education market. Shares were also raised to Hold from Sell at Societe General and to Buy from Neutral at Merrill, based on valuation.
UBS upgraded Verizon Communications (NYSE: VZ) to Buy from Neutral to reflect the company's improving fundamental outlook which they feel should drive a premium to the market multiple.
JP Morgan believes Ship Finance (NYSE: SFL) has better near-term growth prospects and a better valuation relative to Double Hull, and upgraded shares to Overweight from Neutral.
Pacific Growth upgraded Valueclick (NASDAQ: VCLK) to Neutral from Sell as they believe risks associated with its incentive business are reflected in its new guidance and valuation. Craig-Hallumm Capital also upgraded Valueckick to Buy from Accumulate...
OTHER UPGRADES:
Bear Stearns upgraded Gannett (NYSE: GCI) to Outperform from Peer Perform.
MOST NOTEWORTHY: EMC Corp (EMC), NetEase.com, Inc (NTES), Wireless Ronin Technologies (RNIN), Activision (ATVI) and GameStop Corp (GME) were today's noteworthy initiations:
BMO Capital expects upside to EMC Corp's (NYSE: EMC) June quarter estimates, but only sees limited share upside from current levels. The firm started shares with a Market Perform rating and $21 target.
Pali Research believes NetEase.com (NASDAQ: NTES) must address the discontinuity in its growth and started shares off with a Neutral rating.
Barrington expects Wireless Ronin (NASDAQ: RNIN) to benefit from growth towards broadcasting to the outdoor component of out-of-home and views the company as an emerging growth opportunity that is starting with a strong technological base and management team. The firm started shares with an Outperform rating.
First Albany initiated shares of GameStop (NYSE: GME) with a Buy rating, citing upside potential to 2008 estimates.
Activision (NASDAQ: ATVI) was also initiated at First Albany, with a Buy rating, as the firm is expecting strong results and guidance...
OTHER INITIATIONS:
Jefferies initiated Polycom (NASDAQ: PLCM) with a Buy rating.
Deutsche Bank started Zoran (NASDAQ: ZRAN) with a Buy rating.
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Analyst upgrades:
The earnings season continues to roll on, and next week's results offer a peek at the state of fashion retailing, as a variety of companies -- from the discount to the upscale, from the hip to the pedestrian -- are scheduled to report earnings.
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There are those who counterfeit money and those who make near-perfect knockoffs of 21 different Microsoft programs. Well, Microsoft Corp. (NADSAQ: 
TheStreet.com's Jim Cramer says this stock won't quit, and it's beyond Bernanke's reach.
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