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Equity Brief: Ratings Changes for December 11th: ARO, ARUN, ARW, CBI, CBL, CHKP, CHU, CSCO


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Copyright © Thomson Reuters 2012. All rights reserved.
2012-12-11 16:18:18 -

A number of stocks were upgraded and downgraded by equities research analysts
today, as reported by Analyst Ratings Network ( bit.ly/equitybriefdaily)
and Equity Brief:

Goldman Sachs initiated coverage on shares of Aeropostale, Inc. (ARO). They
issued a neutral rating on the stock and set a $14.00 price target. They wrote,
"ARO was a share beneficiary in 2008 when the economy was under pressure and
consumers traded down to more value-oriented price points. Since then, continued
competitive pressures have eroded ARO's value proposition, putting them in a
difficult spot in our view. Teen retail one of the most competitive sectors
amongst our coverage - 2011 proved to be extremely promotional in teen retail
and while competitive pressures have abated somewhat in 2012, we still see
potential long-term challenges as key competitors struggle 
to recover full- priced sales." Oppenheimer initiated coverage on shares of Aruba Networks, Inc. (ARUN). They issued an outperform rating on the stock and set a $25.00 price target. They wrote, "We see several positive trends supporting our rev. projections (+20.3% in '13 and +19.3% in '14), including exploding data usage and accelerating adoption of enterprise mobility (corporate-issued and BYOD). We're positive on Aruba extending its reach to the fast-growing SMB market (+20% CAGR '12-'16E) and view its ClearPass software as potentially transforming. ClearPass opens the broader networking market to Aruba at effectively 100% GM, while pulling through incremental equipment sales. We're not modeling this transformation but see good potential for its long-term realization. Meanwhile, economies of scale are driving operating leverage and supporting EPS growth from $0.80E in '13 to $0.99E in '14." JPMorgan Chase initiated coverage on shares of Aruba Networks, Inc. (ARUN). They issued a neutral rating on the stock and set a $21.00 price target. They wrote, "Our bias on this company is positive, though we believe that consensus estimates are currently fair given the potential for weaker 2013 enterprise spending. We like the fact that gross margins continue to improve and believe that products like ClearPass and Instant could help this trend to continue. However, WLAN competition remains fierce and the company is trading near its recent P/E multiple high. We would advise investors to keep this one on the shopping list and wait for a better entry point." Credit Agricole downgraded shares of Arrow Electronics, Inc. (ARW) from an outperform rating to an underperform rating. Their analysts now have a $39.00 price target on the stock. Lazard upgraded shares of Chicago Bridge & Iron Company (CBI) from a neutral rating to a buy rating. Goldman Sachs downgraded shares of CBL & Associates Properties, Inc. (CBL) from a buy rating to a neutral rating. Their analysts now have a $23.00 price target on the stock. They wrote, "We downgrade shares of CBL & Associates Properties (CBL) to Neutral from Buy, as the share price is nearly at our 12-month price target of $23, and an improving credit recovery environment is reflected in equity prices. Going forward we think operating performance will be the key metric for mall REITs, but that CBL's exposure to malls with weaker historical sales growth and challenged anchor stores, will result in limited internal growth opportunities." Standpoint Research downgraded shares of Check Point Software (CHKP) from a buy rating to a hold rating. They noted that the move was a valuation call. They noted that the move was a valuation call. Goldman Sachs upgraded shares of China Unicom Hong Kong (CHU) from a neutral rating to a buy rating. Goldman Sachs raised its price target on shares of Cisco Systems, Inc. (CSCO) from $24.00 to $25.00. They have a conviction buy rating on the stock. They wrote, "We attended Cisco's analyst day in New York on Friday, December 7. The key incremental takeaways include: (1) Cisco maintained its long-term top-line growth guidance of 5-7%, but raised its operating margin guidance to the high 20% range from mid-20% previously, and guided for stable gross margins at 61-62% over the next three years (vs. last year's analyst day guidance of 60-62% GM over the next one year). (2) The company expects its software revenues to increase from $6bn in FY2012 to $12 bn and its recurring revenues to rise from 22% in FY2012 to 25-30% over the next 3 to 5 years." Morgan Stanley upgraded shares of Cemex SAB de CV (CX) from an underweight rating to an equal weight rating. Stay on top of analysts' coverage with Analyst Ratings Network's free daily email newsletter that provides a concise list of analysts' upgrades, downgrades and initiations. Register at bit.ly/equitybriefdaily Content and Media Contact: newseditor@equitybrief.net This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Equity Brief via Thomson Reuters ONE [HUG#1664138]


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