Benzinga's Top Upgrades with Color for May 1, 2012
Listed below are Benzinga's Top Upgrades for today:
Wedbush commented, "We are upgrading shares of AEO to OUTPERFORM from NEUTRAL, following strong checks, as we believe the company is at the cusp of earnings growth, driven by sales and gross margin expansion. Specifically, we believe new CEO Hanson's strategy to buy less inventory, combined with design improvements, should allow AEO to garner increased full-priced selling and margin recovery, particularly given lower input costs in H2."
Morgan Stanley said, "We're upgrading Haemonetics to Equal-weight from Underweight. The Pall transaction may drive long term EPS upside and addresses our prior concerns on risk to estimates. Pipeline visibility is improving, but we'd need to see more to move to Overweight."
Citi commented, "We see YGE as a significant beneficiary from a market turn, particularly given that the poly assets have now been written down and, much like TSL, it should be able to earn a healthy cash margin on its integrated conversion capacity."
Citi said, "Costs for its module are not competitive, but there is some small niche market for such high efficiency product (again unlike FSLR which is neither high efficiency nor low cost). Also, unlike FSLR, SunPower is not selling much of its own module product into the utility market making it easier to sign PPA agreements with buyers as it is more module “agnostic” in the utility segment."
Piper Jaffray mentioned, "ISIS is the leading antisense company with a rich pipeline of drugs in development. Partner Genzyme recently filed an NDA for cholesterol-lowering drug KYANAMRO and we expect U.S. and European approval this year. We also look for clinical data and partnerships from ISIS' antisense pipeline to drive value over the next 12-24 months. ISIS holds an equity stake in the leading microRNA company Regulus and a strong balance sheet with cash of $344 million."
Piper Jaffray commented, "CATM reported strong 1Q12 revenue of $191.0, vs. PJC at $171.1M, and consensus of $172M. Adj. EBITDA of $44.5M beat our forecast of $41.2M on 23.3% margins (80 bps below our estimate), and adj. EPS of $0.38 vs. our $0.34 estimate. Strong 38% Y/Y revenue growth was driven by 20% acquired, and 18% organic growth. Growth was aided by the leap year, mild winter and strength in transactions from tax refund prepaid cards. Low margin equipment sales were strong leading up to the March ADA compliance deadline. Overall, weaker margins were due to higher equipment sales and acquired business, which will take several quarters to realize synergies."
Bank of America said, "Following >10% share price decline year to date, we upgrade AZN to Neutral. Shares now yield 7% (vs a FY13E PE of c6.5x) which we believe should prevent material further downside. Charts 1&2 show that in the last 10 years, in addition to AZN, only PFE and BMY in global major pharma have traded at >6% yield. Importantly, in contrast to investor concerns, management has confirmed its progressive dividend policy irrespective of future M&A."
Goldman Sachs commented in the report, "CYH has shown improved results over the past two quarters driven by strong execution, lessening impact from changes to admitting practices that followed the government investigation, and stabilization of secular volume trends. Meanwhile, concerns over the government investigation, which is still ongoing, appear to have subsided (among other factors, there have been no significant new negative disclosures). Also, CYH remains an ‘acquirer of choice' in the hospital industry as economies of scale appear set to increase ahead of health reform implementation."
Sterne Agee said, "CSE reported a stronger than expected quarter driven by better credit performance and lower than expected operating costs. The company should continue to see gains on both these fronts and to use holding company cash to buy back stock and retire higher cost capital. We are increasing our PT to $7.50 and raising the rating from NEUTRAL to BUY."
Guggenheim said, "Our upgrade rationale is based upon CSE transitioning to a measured growth story with the run-off of the parent's assets and borrowings winding down vs. solid growth in the Bank. Also, we assume the niche lending focus will support an above average NIM (~4.5%) and ROA (~1.3% consolidated)."
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