U.S. News

Morning Upgrades and Downgrades: IBM Price Target Lifted

Jim Kingsland

The buzz on 'The Street' today is "earnings", says Scott Fullman, director of investment strategy for IA Englander & Co.

Fullman says, "there is a flurry of things for analysts and investors to digest.  The latest batch of earnings are coming in better than expected. We're not hearing the negative comments this morning and that has to be a plus compared with what we were hearing just 24 hours ago."

Potential market moving events include a second day of monetary testimony by Fed Chairman Ben Bernanke on Capitol Hill.

The Fed will also be releasing the minutes to its latest FOMC meeting at 2 pm New York time.

Among companies that have posted stronger than expected earnings since yesterday's closing - IBM . Citigroup liked the report so much that it has lifted IBM's target to $135 from $122.  Goldman Sachs upped its price target from $120 to $130.

Juniper Networks posted higher revenue and raised its outlook. Goldman Sachs upgraded the stock to a Buy from Neutral with a $36 target.

In a further boost to sentiment from earnings, Honeywell beat the street with earnings of  78-cents a share, versus estimates of 76-cents.

eBay's bottom line got enough of a boost from its Skype and Paypal businesses for EPS to beat the street, while items put up for auction declined for a third straight quarter.  Cantor Fitzgerald maintains a Sell and says investors should be focusing on the "persistent sluggishness" in eBay's core business.  Cantor has a $30 target.

CIBC World Markets upgrades JP Morgan Chase  to Sector Outperform from Sector Perform.

Piper Jaffray says Apple and AT&T have a revenue sharing agreement. The firm believes Apple is getting $3 per month for every new iPhone customer already in AT&T's network and for each new customer that comes to AT&T because of the iPhone Apple receives $11/month.  Piper estimates this could add 2-cents a share to Apple's bottom line this year and as much as 58-cents per year by fiscal 2009 EPS.  Piper maintains a Buy on Apple and $160 price target.

Cubist Pharmaceuticals posted stronger than expected earnings of 28-cent a share versus estimates of 16-cents on strong sales of its skin infection treatment Cubicin.  Lazard lifted its rating on the stock from Sell to Neutral.

Pfizer has been upgraded to Strong Buy from Market Perform at Raymond James.

CSX after posting stronger than expected earnings Wednesday has been upgraded to Neutral from Reduce at Calyon Securities.

One day they're being bought, the next day - maybe not.  Yesterday Women's Wear Daily broke a story that Kohlberg Kravis Roberts was close to agreeing to buy Macy's for $52 a share.  Today WWD says financing "might get in the way" of a $24 billion deal.  The New York Post reports that no talks are going on between Macy's and KKR.

The Post, meantime, reports Foot Locker may receive a $29 a share bid from Apollo Management and that Lehman has been hired to advise on a possible sale.

This evening Google is due to post quarterly results. Yesterday, Pacific Crest said that it expected year over year growth of 60%. Susquehanna has cautioned that expectations are high going into tonight's results but still raised its estimates.  Earlier in the week Cantor reiterated its Buy rating and JMP reiterated an Outperform.