Equity Brief: Ratings Changes for November 22nd: DISH, EMC, EOG, HNZ, HPQ, HRL, LINE, MDT, MRGE
2012-11-22 17:04:29 -
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:
Deutsche Bank raised its price target on shares of DISH (NASDAQ: DISH) from
$41.00 to $43.00. They have a buy rating on the stock.
Zacks downgraded shares of EMC Corp. (NYSE: EMC) from a neutral rating to an
underperform rating. Their analysts now have a $22.00 price target on the stock.
Zacks' analyst wrote, "EMC reported a disappointing third quarter, as its
earnings missed the Zacks Consensus Estimate for the second consecutive quarter.
Revenue also fell short of the consensus mark. Although, we believe that EMC is
well positioned to benefit from incremental data center hardware spending (due
to higher adoption of cloud computing), sluggish worldwide IT spending for the
next couple of years and increasing competition will weigh on the stock going
forward. We believe that EMC's vast product portfolio, which has products
suitable for any kind of budget, will boost its market share going forward.
However, frequent acquisitions, increasing foreign currency risk (due to strong
US dollar) and pricing pressure due to stiff competition will hurt profitability
going forward. We, therefore, downgrade our recommendation on the stock from
Neutral to Underperform and set a price target of $22.00. "
Oppenheimer reiterated its outperform rating on shares of EOG Resources (NYSE:
EOG). They have a $130.00 price target on the stock.
Zacks reiterated its neutral rating on shares of H.J. Heinz Company (NYSE: HNZ).
They have a $60.00 price target on the stock. Zacks' analyst wrote, "Heinz's
second quarter 2013 adjusted earnings of $0.90 per share beat the Zacks
Consensus by 2.2%. Earnings also exceeded the prior-year earnings by 11.1%
largely due to a lower-than-expected tax rate, growth initiatives in emerging
markets and improving volume trends in North America. Though reported revenues
increased only 0.5% due to currency headwinds, organic revenues grew 3.3%.
Overall, we believe Heinz's robust brand portfolio, continued strong growth in
emerging markets, strong marketing investments and ongoing cost saving efforts
will boost long-term growth. However, continued sluggishness in its largest
segment, the North American consumer business, is a significant concern. Though
management's effort to turn around this business is slowly improving revenue
trends, we prefer to stay on the sidelines until the company shows significant
success from its efforts. We therefore remain Neutral with a target price of
UBS AG lowered its price target on shares of Hewlett-Packard (NYSE: HPQ) from
$12.75 to $11.00. They have a sell rating on the stock.
BMO Capital Markets raised its price target on shares of Hormel Foods Co. (HRL)
from $31.00 to $32.00. They have a market perform rating on the stock. They
wrote, "HRL continues to leverage its balanced portfolio to generate above-
industry growth across a range of economic/commodity environments with its
diverse business divisions, focus on value-added products, and strong financial
position. Notably, HRL has structurally improved its turkey operation, as
evidenced by its confidence in providing clarity on its normalized margin in a
higher feed environment. We are also encouraged that HRL has begun to address
industry challenges by reducing turkey and pork harvest levels by 1%-2%. That
said, HRL's EPS growth rate appears to be decelerating below its long-term
targets for the second consecutive year, reflecting a sharp increase in feed
costs, higher meat input costs, and turkey oversupply."
Barclays Capital initiated coverage on shares of Linn Energy, LLC (LINE). They
issued an overweight rating on the stock and set a $44.00 price target.
Robert W. Baird initiated coverage on shares of Linn Energy, LLC (LINE). They
issued an outperform rating on the stock and set a $48.00 price target.
Zacks reiterated its neutral rating on shares of Medtronic, Inc. (MDT). They
have a $45.00 price target on the stock. Zacks' analyst wrote, "Medtronic
reported adjusted EPS of $0.88 in the second quarter of 2013, at par with the
Zacks Consensus Estimate while revenues were up 5% at CER to $4.095 billion
beating the Zacks Consensus Estimate of $4.043 billion. We are concerned about
Medtronic's Pacing and Spine business, which continued to remain sluggish
affecting the company's overall performance. Moreover, headwinds such as
unfavorable currency movement and economic uncertainties in Europe still
persist. However, We are encouraged by Medtronic's focus on portfolio expansion
along with an aim to boost revenues from emerging markets. Medtronic continues
to target return of 50% of free cash flow to shareholders. Currently We are
Neutral on the stock."
Deutsche Bank raised its price target on shares of Medtronic, Inc. (MDT) to
$45.00. They have a hold rating on the stock. They wrote, "In F2Q13, Medtronic's
sales grew 5% ex-FX driven by the successful launch and share gains in the drug-
eluting stent business (which accounted for 1.6%-pts of growth). While sales
were better, EPS was in-line with Consensus ($0.01 below our estimate) due
mainly to lower gross margins. Medtronic managed the P&L noting it took one-time
gains from selling treasuries and minority investments to help offset FX hedging
losses. We maintain our Hold rating but we are slightly increasing our PT to $45
from $43 given the more stable top line performance in the quarter and
expectations going forward."
Zacks reiterated its neutral rating on shares of Merge Healthcare Inc (MRGE).
They have a $2.75 price target on the stock. Zacks' analyst wrote, "Merge
Healthcare's third quarter 2012 adjusted EPS remained at the breakeven level, in
line with the Zacks Consensus Estimate but considerably lower than the year-ago
$0.05. Revenue edged up 0.5% to $60.4 million, but missed the Zacks Consensus
Estimate of $64 million. We are positive on Merge with its shift towards
subscription-based model which has longer-term potentials. This is clearly
reflected in the company's continued backlog generation. Also the company is
showing impressive growth with new client wins. However, the growth prospect for
Merge is highly dependent on capital investment. Amidst the reimbursement
headwind and tough competitive landscape, we remain Neutral on the stock."
Deutsche Bank upgraded shares of Mechel (MTL) from a sell rating to a hold
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