Benzinga's Top Downgrades With Color for May 14, 2012
Listed below are today's Top Downgrades at Benzinga:
GARP Research & Securities notes, "The company's mainstay assays are increasing in volume, pipeline tests are advancing, and the installed base of GeneXpert systems continues to expand. However, the company is priced for perfection, in our opinion, and while the fundamental story continues improving, we think any misstep could bring about a strong technical correction."
Barrington Research said, "We continue to view Discovery Communications as exceptionally well positioned and successful among all cable channel providers both domestically and internationally. We continue to believe in this story and expect its momentum to persist. This rating change is a valuation decision. DISCA achieved our $54 target before a slight dip as earnings were announced. Our target price valuation has not changed significantly, so we expect near-term upside will be more limited until either some additional earnings upside factors develop and/or valuation and time frame issues restore a situation in which the expected value on the stock would offer greater upside over our one-year forward time frame."
Global Hunter Securities said, "U.S. Energy Corp. (USEG) posted a decent 1Q12. The company focused its E&P efforts as a non-operator in the North Dakota Bakken and the Eagle Ford Shale in Texas. The next step will be for the company to transition into an operator. The company is patiently waiting for the right opportunity to emerge. Until that time, the company continues to keep its balance sheet clean by opportunistically selling acreage at a premium to the original cost."
Feltl and Company went on to say “Echo is a development stage company with two potentially large products in its pipeline. Echo's Prelude device permeates the skin, enabling small-molecule drug delivery and analyte measurement. Their Symphony transdermal continuous glucose monitor (tCGM) system monitors glucose and has applications for diabetics and critical care. We believe that Echo will be able to successfully commercialize the Symphony in Europe in early 2013 and in the US in late 2013.”
Goldman Sachs commented in the report, "We downgrade shares of Symantec to Sell from Neutral with 10% downside potential as we expect shares to underperform as investors get increased visibility to worsening margins and cash flows. Secular headwinds in Symantec's core businesses are hampering growth, and the company is transitioning to lower margin, higher growth areas. We see prolonged sluggish organic growth as the stronger areas of the business (DLP, Mobile, etc.) are not large enough to offset mature segments. We also see risks to Symantec's highly profitable consumer business as the recent strength becomes harder to sustain due to increased competition."
Wedbush comments, "Downgrading to NEUTRAL as lack of volume and competitive pricing reset our margin expansion investment theme for the next 12-18 months. We are downgrading shares of Republic Services (RSG) to NEUTRAL from OUTPERFORM as the challenging Q1:12 results and reduced outlook could continue. Our downgrade is predicated on: (i) Replacement/retention pricing is negative; (ii) Customer churn has increased and remains elevated; and (iii) Economic activity suggests flat volume story."
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