Benzinga's Top Upgrades with Color for April 26, 2012

Listed below are Benzinga's Top Upgrades today at Benzinga:

: ISI Group writes, "We are upgrading SLG to Buy from Hold, and increasing our price target to $89 (up from $80), as we believe the company's portfolio and management team are likely to outperform the broader NYC market in 2012 due to creative investment opportunities coupled with a portfolio that is well positioned to take advantage of activity at lower price points. While we expect the NYC leasing market to remain sluggish in 2012, SLG's proactive approach to leasing and deal flow in the office, retail, and residential investments should allow the company to grow earnings faster than the Street expects (our 2013 FFO estimate is 6% above consensus and we assume another $250mn of equity and $300mn of free cahs flow after dividends over the next 7 quarters to fund net external growth)."

: Sterne Agee writes, "We noted a positive bias on our earnings expectations for 1Q12; given results and our revised outlook we are upgrading the shares to BUY with a $41 PT, based on 14x our FY13E. We consider it likely TCBI will continue to be an EPS momentum name going forward. While results from the mortgage warehouse are difficult to predict, we consider it likely the growth of the commercial bank, improved asset quality and fairly stable NIM should result in profitability being similar to 1Q12 going forward. Further, we note our assumptions assume capital levels increase and conservatively assume profitability is slightly lower in FY13."

: Hilliard Lyons writes, "With the shares having fallen ~10% below the five-year median multiples of EV/EBITDA and forward P/E, we believe the intermediate-term risk/reward balance is again reasonable. As such, we are increasing our rating on TPX from Neutral to Long-term Buy with a target price of $70. That price values the shares at 17.1x FY'13E earnings and 9.7x EV / FY'13E EBITDA, multiples that are in line with five-year medians and which we believe is reasonable given the company's financial performance and outlook."

: Sterne Agee said, "Following 1Q12 results and surprising CEO succession announcement, we are upgrading TMK to Neutral from Underperform. Despite TMK's rich valuation versus peers, we see little fundamental risk to the story; in fact, it would appear fundamentals (other than the rate environment) continue to improve."

: FIG Partners writes, "[W]e anticipate EGBN share remaining a leader among small-capitalization banks relative to improving sector fundamentals. Among our rationale for a stronger P/E is the fact that ROTCE-Return on Tangible Common Equity is estimated to be in excess of 12% in 2013 even after providing for additional common equity (which is done for conservatism and may not occur), loan growth has been consistently strong the past several quarters with a stable mix within the portfolio, and the select club of “growth bank stocks” trade at noticeably higher forward P/Es than EGBN. We feel the company can break into this peer group and receive better treatment by equity investors willing to pay up for consistent growth."

: Morgan Stanley commented, "We had argued heading into the quarter that embedded assumptions of 7-8% core revenue growth and >120bps margin expansion was substantially more aggressive than the ~4% core growth and 30-40bps expected for peers. And so it proved at the margin line, which undershot by 60bps vs. MSe. But incrementals at A&S - the key EPS swing factor - were not at all bad at 38%, while CPS (at 15%) are highly volatile from quarter to quarter. Net/net, we view FY12 revenue guidance of 6-9% ex-FX as appropriate and segment margin guidance of ~18% as somewhat conservative."

: Citigroup writes, "SLAB plunged -17% Wed. vs. the SOX's +2.3% after SLAB stated on its earnings call that touch sales (8% rev in 1Q) may sunset in 2013. The severe stock pullback reflects: 1) touch reversing from being a growth driver to now being a ~5% top-line drag in ‘13, 2) an already skeptical investor base unsatisfied with SLAB's awkward CEO switch 2mos ago, and 3) a 6% R&D cost cut to compensate for weaker GM caused by unfavorable mix (a highly unorthodox move for growth-focused SLAB)."

: Citi commented, "WPI announced it would acquire Actavis for €4.25B (US$5.61B) + €250M ($330M) CVR payable in WPI stock (5.5M shares payable in ‘13 valued at $60/share) if 2012E EBITDA targets are met. Our NEWCO EPS in ‘13E & '14 are $8.49 (+41% vs. WPI's “>30%”) & $10.02(+47% vs. “accretion accelerates”) assuming $400M in annual debt paydown. Our $85 PT assumes the NEWCO trades at 10x our ‘13E EPS of $8.49."

: Bank of America mentioned in the report, "We are upgrading HXL to Buy from Neutral because: 1) HXL is a pure commercial aero original equipment (OE) play and the company is a direct beneficiary of Boeing and Airbus production increases. 2) Record volumes should drive margin expansion and unlock greater earnings upside. 3) More than half of Space and Defense is rotorcraft which is experiencing a secular trend to composite materials. 4) Wind energy has stabilized and we expect modest growth in 2012."

: Bank of America writes, "We are upgrading CRI to Buy (from Neutral), as continued upside to GM should drive further upward estimate revisions. CRI reported adjusted 1Q12 EPS of $0.56 (ex-DC charges) well above fcst and cons. of $0.42, driven by stronger than forecasted GM of 35.3% (vs. fcst of 30.7%) as higher AUR (11% in Carters wholesale and retail, 12% in OshKosh retail, 20% in OshKosh wholesale) offset higher y/y product costs of ~10%. Alleviation of product costs in 2H12 (costs down roughly -10% y/y), coupled with the reduction of off-price channel sales (estimate 2-3% of sales vs. 2011 of 4% of sales) should support GM and a higher retail pricing mix shift."