Benzinga's Top Upgrades with Color for May 8, 2012
Listed below are today's Top Upgrades at Benzinga:
KeyBanc Capital Markets notes, "EXCO Resources, Inc. (XCO-NYSE) has a number of potential transactions that are on the cusp of being consummated, which could provide significant catalysts for shares if executed to plan. XCO is negotiating the sale of TGGT, its midstream asset, which it owns 50/50 with BG Group, and is also exploring a possible joint venture on the Company's conventional gas assets with a number of interested parties. A joint venture would not only provide a liquidity event but could also be a vehicle for further opportunistic acquisitions of conventional gas assets that are depressed in today's natural gas pricing environment."
Stifel Nicolaus notes, "We are upgrading shares of NYX to Hold from Sell based on the current valuation and occurrence of catalysts cited for our Sell rating. Namely, consensus EPS estimates have come down 15% and 9% for 2012 and 2013 respectively since late March, which was the primary catalyst for our downgrade. While we expect continued headwinds for NYX given the weak trading environment and regulatory pressures in Europe, we believe the current valuation discounts many of these risks and see the shares as reflecting fair value."
Citigroup says, "Three reasons for the upgrade: 1) Likely tender for 11.25% notes, 2) Potential to accelerate buybacks, 3) Business now operating at parity versus QVC over sustained period of time. …We value HSN at 10.5x 2013 free cash flow plus the value of the cash on the balance sheet. As such, we believe fair value is $42.50 a share."
Canaccord Genuity explained, "We are raising XEC from Hold to BUY and maintaining our target at $84 as a stronger shift to oil offsets higher operating expense. XEC overreacted to the upside following Q4 results, in our view. Since then, the stock has declined over 20% while Permian peers have fallen only ~10%. We now see ~10% greater upside versus Permian peers as Cimarex offers a similar CFPS growth outlook ('12-'14E) though trades at a ~20% discount ('12E EBITDA)."
JP Morgan commented, "We are upgrading Amicus to Overweight from Neutral and establishing a December 2012 price target of $8. Recall, phase 3 monotherapy data for Amigal in Fabry disease are expected in 3Q12 (Study 011). We have been warming up to Amicus since the 2012 WORLD Lysosomal Disease Network meeting in February, where baseline characteristics for Study 011 were presented. Indeed, based on feedback from key opinion leaders (KOLs), prior phase 2 data, and phase 3 trial design, we believe there is a high probability of success for Study 011."
Morgan Stanley says, "We upgrade VRTX to EW. CF data were better than anticipated, but key data unknowns still exist. We add VX-809 sales to our base case model."
Morgan Stanley comments, "We upgrade DRC to OW, as E&Cs in Houston last week indicated that they are witnessing a step-change in tendering for downstream activity fueled by prolonged weak US nat gas prices. This is on top of already strong upstream activity driven by int'l LNG and deepwater infrastructure demand."
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