Wall to Wall Street Coverage: Upgrades and Downgrades

• By Justin Sharon
• On 8:30 am EDT, Tuesday September 1, 2009

Stocks slipped a second session though still posted their best August since '00. But buyer beware: September is invariably the scariest month for shares

It was a merger Monday with Disney's (DIS) Fantastic Four billion dollar acquisition of Marvel Entertainment (MVL) being bested by Baker Hughes (BHI) buying BJ Services (BJS) for $5.5 billion. Bidding was also fierce as a man auctioned off his parents. Love literally means nothing in tennis but money's another matter; the US Opened for business in New York with all 84 luxury boxes sold out.

FDIC chair Sheila Bair, already an author, writes an Op-Ed in today's Times arguing against additional regulation. And the Farmer's Almanac hits store shelves today forecasting a colder winter than do the nation's meteorologists. Since they say weathermen were created to make economists look good, better bundle up.

Initiations

Viacom (VIA): The media company is initiated with a Market Weight and $28 target at Thomas Weisel. Current valuation is already discounting an advertising rebound, though the international arena presents potential opportunities.

Food Stores: BMO Capital takes a trip to the grocery store, its initiations including Winn-Dixie Stores (WINN), Whole Foods Market (WFMI), Pantry (PTRY) and Kroger (KR), all with Market Performs, while Safeway (SWY) shares are established at outperform with a $23 price target.

Upgrades

BHP Billiton (BHP): UBS upgrades mining bellwether BHP Billiton to Buy from Neutral on the back of the broker's higher forecasts for commodities. China's appetite for coking coal, copper and iron ore bodes well.

Coach (COH): Bank of America/Merrill Lynch raises its rating on Coach (Buy from Neutral) on a belief gross margin will be boosted by leaner inventories and more productive price points.

Lockheed Martin (LMT): Citigroup boosts Lockheed Martin to Buy from Hold and increases their price objective $12 to $90. Improving risk/reward and long-term earnings catalysts are cited.

Downgrades

Raytheon (RTN): Citi is less sanguine on Lockheed competitor Raytheon, cutting the company to Hold from Buy though maintaining the $52 target.

American International Group (AIG): After an astronomical August, shares of American International Group start September less auspiciously after Bernstein downgraded it to Underperform from Market Perform on valuation. Their price objective of $10 is intact. For trading ideas on this stock, see Determining AIG's Next Move.

Aetna (AET): Another insurer got the chop when Aetna was lowered at Leerink Swann (Market Perform from Outperform) due to valuation and a challenging group growth outlook.

Verizon (VZ): Auriga puts Verizon on Hold (from Buy), concluding the communications company will see its enterprise-related business squeezed by a continuing climb in unemployment.

Alcatel-Lucent (ALU): It's a tough Tuesday for telecoms, with Credit Suisse hanging up on Alcatel-Lucent (Neutral from Outperform).

Disney: Brokerage house Lazard lowers Mouse House Disney after the entertainment company's purchase of Marvel yesterday. See also Trading Disney's M&A.

Nothing contained in this article is intended as a solicitation for business of any kind or for investment in the firm.

Buzz up!