Benzinga's Top Upgrades with Color for May 18, 2012
Listed below are today's Top Upgrades at Benzinga:
Bank of America notes, "We are upgrading Synacor to Neutral due to the company's moderating valuation versus online media peers. Synacor continues to be a strong fundamental growth story with our model showing 38% and 28% y/y revenue growth in FY2012 and FY2013, respectively. We view Synacor as a play on the rise of TV viewing on the web and still like Synacor's high predictability and opportunity for a transformative customer win to significantly increase our estimates."
Citigroup says, "We are raising our rating to Buy from Neutral and increasing our price target to US$90 from US$80, as we believe Pershing's proxy win coupled with the resignation of former CEO Fred Green begins the new board's term on a positive note and should lead to the beginnings of a constructive turnaround for Canadian Pacific. As we expected, CP shares have lagged Canadian National since it pre-announced positive 1Q results in April, as investors lacked a clear catalyst until now. That said, with the vote complete, volumes up 7% QTD, the potential for significant EPS growth through 2015, and news flow likely to support the turn around, we believe a reacceleration of its shares is likely."
Oppenheimer notes, "We are upgrading Prestige Brands to Outperform based on our belief that the company is about to embark on a meaningful balance sheet deleveraging process which, along with a portfolio now heavily weighted toward the OTC healthcare segment, should lead to healthy and sustainable growth and multiple expansion."
Goldman Sachs notes, "With the stock trading at 16X 2014E EV/EBITDA versus the Internet average at 12X despite a revenue growth outlook 2.7X the sector, we believe this is an attractive entry point. While questions around the near-term trajectory of mobile advertising and the expected deceleration in 1Q growth have weighed on the stock, mobile remains the fastest growing segment of both consumer media consumption and advertiser spending. Millennial's position as the leading independent mobile ad platform makes it a key beneficiary of this growth and a potentially important asset to larger companies struggling to adapt."
BMO Capital Markets comments, "We are upgrading Kansas City Southern to Market Perform from Underperform based on valuation. The stock has pulled back approximately 18% from the post Q1/12 high and is down 16% over the past two weeks while its major Class 1 peers are down 6% on average. At the current level, the stock represents 5.1% upside to our price target of $68."
Guggenheim notes, "We believe Sprint can meet or beat subscriber expectations for the remainder of this year. In our view, weak subscriber results have been the biggest disappointment for investors in Sprint's recent earnings reports. We believe expectations are now more realistic."
Citigroup comments, "We raised Huaneng's FY12-14E net profits by 28-30% and DCF TP by 40% to $29.60 mainly for lower unit fuel costs (-2% YoY in 2012E, from flat) after our recent visit. It has high coal inventory of 19 days and does not expect a rise in spot coal prices amid ample supply. Freight rates, representing 15% of coal cost, also fell 18-31% since early Apr. Its 9.9x FY12E PER looks inexpensive. We upgrade Huaneng to Buy."
All of Benzinga's Analyst Ratings new can be viewed here.
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