Benzinga's Morning Upgrade Summary for May 30, 2012
Listed below are today's Top Upgrades at Benzinga:
Desjardins went on to say “Given the outlook for CGI is more positive for 2H FY12 and FY13, in contrast to its business performance through the latter half of FY11 and 1H FY12, we believe the current share price represents an attractive entry point for investors looking for technology sector exposure. Overall, CGI gives investors exposure to technology without some of the usual risks related to the tech sector, given CGI's large base of recurring revenue and stable margin profile. CGI continues to generate abundant free cash flow, a large portion of which is returned to shareholders via share buybacks while the remainder is retained and reinvested in profitable growth opportunities. We note that given CGI's high and improving ROE metric, we look favourably on the company's decision to reinvest cash flows in its business and create value for shareholders. CGI remains committed to its mantra of a ‘build & buy' strategy; however, we do not explicitly forecast an acquisition and we do not believe a transaction is imminent in the near term.”
Canaccord Genuity said, "BNS reported Q2/12 core cash EPS of $1.18 (up 3% YoY) versus our estimate and consensus of $1.12 and $1.15, respectively. Relative to our estimate, revenue was higher than expected with NII (supported by the Colombia deal) and trading revenue coming in above our forecast. PCLs were lower than expected, but this was offset by higher expenses."
Bank of America said, "We upgrade SXL to Neutral considering 1) SXL's recent unit price pullback (SXL has declined 15.3% since the end of April compared with a 5.7% decline of the Alerian MLP Index (AMZ)), 2) wide Brent/WTI crude oil spreads (~$16/bbl currently), which benefits SXL's margins, 3) robust distribution coverage ratios (over 2x in 1Q12), which may allow for an acceleration of distribution growth, 4) SXL's solid balance sheet with debt/EBITDA of around 3x, 5) healthy butane blending margins, and 6) SXL's attractive organic growth projects."
Bank of America mentioned, "We believe AL is in the early stages of realizing the benefits of a strengthening network effect that should contribute to 25%+ growth for 4-5 yrs, and profits by 2014. Updated subscriber cohort data is increasingly supporting a 15%+ subscriber penetration thesis (up from 4% today), our new survey work highlights the strong value of AL for advertisers, and accretive eCommerce initiatives are beginning to be material. Also, with the stock down 23% YTD (vs. Nasdaq +9) and with ~50% upside potential to our PO, the stock is more attractively valued."
Citigroup commented, "Through 4 quarters as a public company (and several years as a company), LNKD has delivered consistent and impressive results – 7 consecutive quarters of 100%+ Revenue growth, 8 consecutive quarters of 100%+ Corporate Customer growth, close to 20% EBITDA margins for 2 years. Just as important, LNKD's end-markets penetration remains low -- $900MM in '12 Revenue vs. a $300B Global Staffing market."
Goldman Sachs said, "Wynn shares have underperformed as controversies around Macau market growth, Okada litigation and Cotai development have clouded investors' appreciation for one of the premier global gaming stocks. We recently visited Macau, where trends appeared strong with limited discounting, and long-term structural demand drivers in place. In addition, infrastructure expansions are now only a couple months to a few years away, potentially boosting demand due to ease of access. Importantly, our review of external research that analyzes discount for lack of marketability gives us some comfort that the 30% discount on the Okada stake may be supported by outside sources. Finally, as Wynn provides further details on the Cotai project, investors should get a better sense of the EBITDA generation."
Mirae Asset said, "With 2,000+ R&D personnel, PWRD's current revenue growth certainly does not fully reflect its potential, in our view. PWRD has been undergoing painful transition from a volume game producer to a quality game developer. We expect it to achieve modest, but tangible success in 2013-14 even though we still rank the company below NTES, Tencent, CYOU and GA in terms of capabilities as a game developer. While long-term profit growth remains challenged, we expect profit growth of 35% YoY in 2013."
Oppenheimer notes, "We upgrade JACK to Outperform and install a $32 price target based on our sum-of-the-parts analysis. We believe the Street under-appreciates improving store-level economics at both brands which could enable JACK's earnings trajectory to outpace expectations. JIB (85% of profits) continues to turn around owing to structural enhancements, and Qdoba (15% of profits) appears on the right path to enhance unit returns and lift investor confidence. Qdoba expectations are relatively constrained and could be a source of upside if core margin improvement continues, accretive franchisee acquisitions occur or new unit profits benefit from expansion into healthier newly acquired markets that remain underpenetrated."
KeyBanc said, "We continue to have a favorable view of the chicken industry and TSN remains our favorite pick in the space. However, we now believe the risk/reward on SAFM is sufficiently attractive to warrant a BUY recommendation mainly due to greater visibility into chicken industry economics and SAFM's earnings for FY13. Furthermore, SAFM's balance sheet has strengthened considerably in recent months and we continue to believe that it is one of the best managed companies in our entire coverage universe."
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