Wall to Wall Street Coverage: Upgrades and Downgrades

• By Justin Sharon
• On 8:50 am EDT, Tuesday October 20, 2009

Rallies -- and rally monkeys -- were all the rage yesterday as major markets reached new 2009 peaks, a performance which played particularly well in Peoria with hometown hero Caterpillar (CAT) (+6.01%) the Dow's biggest gainer. Employment is in the doldrums but it's a great time for Jobs, Apple (AAPL) gapping up to an all-time record after hours on astounding earnings. Texas Instruments (TXN) also beat the Street and can safely be said to have had a better start to the week than Raj Rajaratnam, the ex-semiconductor analyst who once covered the company. Toy Story 2 is back on the big screen and two toy stories were the talk of the town; Mattel (MAT) tumbling 2% on an analyst downgrade and Hasbro (HAS) sliding 3.73% even as it reported better than expected results.

Oil is up above $80 for the first time since October of '08, having last week broken out of its three month head-and-shoulders trading pattern. See also The Coming Boom in Oil Recovery and Why Oil Is Rising and Gasoline Isn't. Also freed from its head and shoulders is Elvis' hair, the heirloom a hot tomato at auction. With bullion about to notch another new nominal high there's money to be made in gold bars. And indeed prison bars, penitentiary play Geo Group (GEO) gaining 5.10% on the back of a bullish Barron's article. At 8:30 AM Eastern September housing starts and the Producer Price Index are each released and peak earnings week continues with Caterpillar, Coach (COH), Coca-Cola (KO), DuPont (DD), Pfizer (PFE), UnitedHealth (UNH), United Technologies (UTX) and Yahoo (YHOO) all announcing. See Jeff Macke's Earnings Predictions That Matter.

Initiations

Wendy's/Arby's Group (WEN): Bank of America/Merrill Lynch initiates Wendy's/Arby's Group with a Neutral and $5.50 price target as the fast food outfit lacks a significant international presence.

Lloyds Banking Group (LYG): The stock is picked up with an Outperform at FBR Capital on optimism about a potential public rights issue.

Electronic Arts (ERTS): RBC Capital assumes coverage on Electronic Arts with an Outperform.

Dean Foods (DF): The company is initiated at Neutral by Goldman Sachs.

Airlines: Citigroup starts the domestic airline sector with Buys on Southwest Airlines (LUV) (top pick with a $13 target), and JetBlue (JBLU) ($7.50). The firm rates AMR Corp. (AMR) a Hold ($8).

Upgrades

Bank of America (BAC): RBC Capital boosts Bank of America to Outperform from Sector Perform.

Ford (F): The auto company is upgraded to Equal-Weight from Underweight, with the target taken to $8 from $7, by Barclays Capital on improved pricing trends.

Amazon.com (AMZN): Oppenheimer increases Amazon.com to Outperform from Perform with a price objective of $130 due to a better sales outlook in upcoming quarters.

Cablevision (CVC): Morgan Stanley raises Cablevison (Overweight from Equal-Weight).

Family Dollar (FDO): The discount retailer is upgraded at Credit Suisse (Outperform from Neutral) on a compelling valuation and secular positives in the dollar store space

Downgrades

Wendy's/Arby's Group: UBS asks where's the beef with Wendy's/Arby's Group, reducing its rating to Neutral from Buy and cutting its target to $5.00 from $5.50 on iffy sales at both brands.

Boeing (BA): The stock may be going lower after an Underweight-from-Equal Weight downgrade by Morgan Stanley.

GameStop (GME): Stop-loss orders could be the order of the day for GameStop, cut to Neutral from Buy at Janney Montgomery Scott.

Boston Scientific (BSX): Wells Fargo clips Boston Scientific to Market Perform from Outperform.

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

Buzz up!