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Updated 26-May-11

Upgrades

Company

Ticker

Brokerage Firm

Ratings Change

Price Target

Aeropostale

ARO

FBR Capital

Underperform » Mkt Perform

$20

American Eagle

AEO

FBR Capital

Market Perform » Outperform

$17

Comerica

CMA

Oppenheimer

Perform » Outperform

$43

Sirius XM

SIRI

Citadel Securities

Neutral » Neutral

$2.25

As a clothing retailer, Aeropostale is vulnerable to the whims of fashion. Yet that worked in its favor during the recession, as the company managed to sustain positive same-store sales in its 2008, 2009, and 2010 fiscal years. Meanwhile, Abercrombie & Fitch (NYSE:ANF) as well as American Eagle Outfitters suffered big drops in comps, with Abercrombie posting a huge 23% same-store sales decline in fiscal 2010. But recently, Aeropostale has faced challenges again. In its most recent quarter, the company fell short of revenue expectations and dramatically cut forward earnings guidance.

While first quarter sales fell 6 percent at American Eagle Outfitters Inc., the company’s net income more than doubled. The South Side-based clothing retailer reported net income of $28.3 million, or 14 cents per share, on sales of $609 million for the quarter ending April 30. That compared with net income of $10.9 million, or 5 cents per share, on sales of $648.4 million in the same period a year ago. During the first quarter, American Eagle opened six 77kids, three American Eagle and two aerie stores. The company expects second-quarter EPS to range from 10 cents to 13 cents per share.

Comerica Incorporated provides financial products and services in the Midwest and Western regions, Texas, and Florida. The company's business bank segment comprises middle market, commercial real estate, national dealer services, international finance, global corporate, leasing, financial services, and technology and life sciences businesses. Its retail bank segment offers small business banking and personal financial services, including consumer lending, consumer deposit gathering, and mortgage loan origination.

For Sirius, Vijay Jayant views year-to-date SAAR trends suggesting full-year U.S. vehicle sales could top 13 million, and believes that Japanese manufacturers could face shortages this summer. While noting that the potential impact from the earthquake in Japan on supply chains is difficult to handicap, he believes that Sirius XM’s margins may be lower in the back half of the year as SAC charges may increase with a strong recovery late in the third quarter due to U.S. auto makers increasing production in an attempt to gain market share. Jayant also believes that full-year revenues could also be impacted as these subscribers' contributions to revenue begin later in the year. Based on current SAAR trends, Jayant is projecting full-year 2011 auto sales of 12.8 million and believes that Sirius XM will add 1.5 million net new subscribers for the year, slightly ahead of management’s guidance of 1.4 million

Downgrades

Company

Ticker

Brokerage Firm

Ratings Change

Price Target

Lululemon athletica

LULU

FBR Capital

Mkt Perform » Underperform

$80

Lululemon is an athletic apparel company for yoga, running, and pretty much any other sport you can think of. In the latest quarter LULU reported better than expected earnings of $0.64, beating estimates of $0.57 per share. Beating estimates hasn’t been much of a surprise for it, though as it's beaten them more than two years straight now. LULU has an EPS growth rate that is over 60%, only seen in the younger retailers. With this growth, investors have raised the price to over 60 times the earnings. With a P/E (Price divided by the earnings per share) this high, people are wondering if it’s even worth buying.

Coverage Initiated

Company

Ticker

Brokerage Firm

Ratings Change

Price Target

Tupperware

Medifast

TUP

MED

Janney Mntgmy Scott

Janney Mntgmy Scott

Neutral

Buy

$65

Sequans Communications

SQNS

Robert W. Baird

Outperform

$16

American Water

AWK

Ladenburg Thalmann

Neutral

$32

Amer States Water

AWR

Ladenburg Thalmann

Buy

$38

STAG Industrial

STIR

RBC Capital Mkts

Sector Perform

$13

Tupperware Brands Corp. said on Wednesday that it will step up its borrowing, as the company announced plans to refinance its outstanding term loans, in part through a new $400 million debt offering. Tupperware plans to refinance its $405 million in outstanding term loans with proceeds from the note offering it announced Wednesday, as well as borrowings under a new $450 million five-year floating rate credit facility that it intends to enter into with the closing of the notes offering. The new credit agreement would replace Tupperware's current $200 million credit facility.

Medifast Inc., which provides portion-controlled weight-loss programs, plans to buy back up to 500,000 shares of its common stock over the next two years. The decision by the Owings Mills company’s board of directors to authorize the share buy-back recognizes “our strong financial position and their confidence in the future of Medifast,” Bradley T. MacDonald, Medifast’s executive chairman, said in a statement. Shares of Medifast rose 29 cents to close at $25.02 during Wednesday’s session.

Last week, 4G chipmaker Sequans Communications S.A. and Ericsson (NASDAQ:ERIC), the provider of technology and services to mobile operators, entered into a partnership to develop and mature TD-LTE technology for the global marketplace. “Our cooperation with Ericsson will yield valuable results for the LTE ecosystem,” said Georges Karam, Sequans' CEO. “Ericsson is a leader in 4G LTE and an important company for Sequans to work with. Both our companies are focused on developing LTE technology, specifically for the major TD-LTE operator trials coming soon to India and elsewhere.”

The New Jersey Department of Environmental Protection has recognized New Jersey American Water “for its voluntary and proactive measures taken to go beyond compliance in an effort to improve the environment and ensure a sustainable future.” New Jersey American Water received a certificate from the DEP’s Environmental Stewardship initiative for the company’s work on a $3 million upgrade of sewage facilities in the Pottersville section of Tewksbury.

American States Water Company has a market cap of $623.99M. This stock is trading 8.78% above its 52-week low. Dividend yield at 3.35%. 5-year dividend growth rate at 2.93% vs. industry average at 0.89%. The stock has lost 4.86% over the last year

STAG Industrial, Inc., a company focused on the acquisition, ownership and management of single-tenant industrial properties throughout the United States today reported results for its predecessor for the first quarter-ended March 31, 2011. On April 20, 2011, the company closed on its initial public offering and the related formation transactions to aggregate the predecessor and other funds owned by affiliates of the company.

As a result, the company’s quarterly report on Form 10-Q for the first quarter 2011 only reflects results of the predecessor and is not representative of the company’s consolidated future results. The company has included in this press release pro forma results and operating statistics which reflect the activities of the company (and its aggregated entities) as if the IPO and related formation transactions had occurred on January 1, 2011. Since the company did not have comparable pro forma reporting periods in 2010, comparative results for the company will not be available until after the second quarter of 2011, which can then be compared with the pro forma results from the first quarter of 2011.

Coverage Reiterated /Price Target Changed

Company

Ticker

Brokerage Firm

Ratings Change

Price Target

HEICO

Frontline

HEI

FRO

FBR Capital

FBR Capital

Mkt Perform

Outperform

$50 » $52

$40 » $28

Suntech Power

STP

Ardour Capital

Hold

$10 » $7.50

NetApp

NTAP

Needham

Buy

$64 » $65

Aerospace and defense company Heico Corp. said earlier this week that its fiscal second-quarter profit jumped about 34 percent on higher revenue and lower interest expense. The company reported net income of $16.8 million, or 40 cents a share, for the three months ended April 30. That compares with net income of $12.6 million, or 30 cents a share, in the prior-year period. Revenue swelled 20 percent to $184.5 million, up from $153.8 million a year earlier.

Frontline, the operator of the world’s largest crude oil tanker fleet has signaled it is bracing to batten down the hatches for a lengthy rough ride as ship deliveries continue to outpace demand, driving earnings down. Frontline gave its assessment of market conditions after unveiling first-quarter results showing net income was down 81 per cent to $15.5m on the same period last year, on revenue down 29 per cent to $235m. Of the net profits, $13.2m came from asset sales. The company, listed on the Oslo and New York stock exchanges, is closely watched because its chief executive and largest shareholder is John Fredriksen, the Norwegian-born shipowner widely regarded as his generation’s finest player of shipping markets.

Shares of Suntech Power Holdings Co., the Chinese solar panel maker, are down 3% after the company reported a first-quarter profit that fell well short of Wall Street estimates. The company said it earned 17 cents a share on revenue of $877 million, but analysts were looking for a profit of 35 cents on revenue of $869 million. The news isn't sitting well with solar investors as the Chinese Solar Stocks Index is off 0.7%. While Suntech did say it expects to incrementally increase shipments in the second quarter, it lowered its full-year revenue forecast to $3.3-$3.5 billion from March guidance of $3.4-3.6 billion. The company added that the next few quarters will be a challenging time for the solar sector. Suntech, the world's largest supplier of solar modules, expects 2011 shipment growth of 40%.

Data storage and management company NetApp reported earnings and a strong quarter. The company posted earnings of $0.59 a share on revenues of $1.428 billion. The company beat the year-ago earnings of $0.50 and total sales of $1.17 billion. More important from a trader's point of view, the earnings exceeded the consensus estimate. Wall Street analysts had expected the company to earn just $0.52 a share on sales of $1.39 billion. For the full year, NetApp posted profits of $2.20 a share on revenues of $5.123 billion, compared to $1.51 on sales of $3.931 billion in fiscal 2010.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in SIRI over the next 72 hours.

Additional disclosure: I may also initiate a short position in SIRI at any point.

Source: Upgrades and Downgrades for Thursday May 26