UPDATE: Bank of America Upgrades Avon Products to Buy on Risk/Reward

Bank of America raised its rating on Avon Products

from Neutral to Buy and increased its price objective from $18 to $20. Bank of America noted, "Four factors suggest the worst may be over: (1) the recent amendment to credit facility covenants, (2) the Q4 kickoff of the restructuring program; (3) the Q3 stabilization of organic sales, and (4) easing comps. While visibility into EBIT margin potential is limited by a lack of info, leaving benchmarking and scenario analysis the primary analytical tools behind the upgrade, we see upside as results simply progress from disastrous to less disastrous, with a call option on real fundamental change driving shares even higher. Slightly improved balance sheet visibility is a near-term catalyst, allowing the market to better frame downside risk." Avon Products closed at $15.59 on Thursday.