Benzinga's Top Upgrades with Color for April 30, 2012
Listed below are today's Top Upgrades at Benzinga:
JP Morgan said, "For Kraft, not only have Nielsen Co. data been relatively robust lately, but also our analysis suggests that the dividend yield on GroceryCo could be higher than perhaps anticipated, and we see Kraft's sum-ofparts valuation as appealing. Regarding TreeHouse, wen still like the story longerterm but think the next two quarters could be so-so. And barring a large and accretive acquisition – which may be difficult if potential targets are hesitant to sell when margins are low – we no longer have a valuation argument for meaningful near-term upside."
Pritchard Capital Partners said, "We believe that EQT may be forming a bottom. To equate our $67 NAV to the current trading range, we would have to lower our mid-cycle gas price to $3.50/Mcf from $4.00/Mcf and would have to assume a 10% discount on account of the company having a complex structure. While near term gas prices will likely remain weak, we are much more bullish than $3.50/Mcf in the long run and are upgrading EQT to a 'Buy'."
Citi commented, "Three factors pace our change of thinking: 1) while we remain concerned around money market reform, such reform continues to get pushed out and likely to water down ultimate impact we suspect; 2) LT business is surprising to upside, with solid lead indicators into 2Q; and, 3) we see equal upside/down in risk assessment."
JP Morgan commented, "Based on our NAV analysis, SandRidge is one of the cheapest stocks in our coverage universe. It is one of the few companies trading around Proved Reserves NAV using NYMEX prices. What likely has been the primary overhang on the stock is investor concern that SD will increase its funding gap further. We think its three-year funding gap is manageable and that the company will focus primarily on harvesting its existing asset base. Catalysts for the stock include successfully bridging the funding gap, spending within or close to its guidance, and hitting its production targets."
Jefferies said in the report, "The company raised 2012 guidance following a strong first quarter result citing higher expected volume sales from its gas fleet and improving spark spreads. With the EBITDA estimates of most of Calpine's peers decling with lower gas prices we believe that Calpine is currently trading at a 15% EV/EBITDA discount to other merchant generators."
Jefferies said, "Increasing pressure on state budgets, coupled with rapidly inflating Medicaid costs create a durable, long-term demand for HMS's expertise, regardless of the SCOTUS decision outcome. Anxiety over the 1Q earnings miss and June decision has taken >25% out of the stock, now giving investors their first Buy opportunity at a sub-1x PEG in over a year."
Dougherty & Company said, "Valuation always remains a challenge for TASR - a company that dominates its markets and faces little competition - but one that has produced only minimal earnings per share over the last 7 years in aggregate. We believe visibility for earnings generation is improving, which is the basis of our rating revision from Neutral to Buy."
BMO Capital Markets commented, "On April 15, Endeavour Silver announced the signing of a definitive agreement with AuRico (AUQ-TSX, $8.87, Outperform, covered by David Haughton) to purchase the operating El Cubo silver-gold mine and exploration-stage Guadalupe y Calvo (GyC) project in Mexico. EDR will pay AUQ $200M upon closing, and can elect to pay up to $100M of the purchase price in shares, with the remaining amount in cash."
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