Review Of Analyst Upgrades Last Week - Part XII

by: The Value Investor

Analysts have been sending out their research reports to their clients again. The following is a review of the most important upgrades for the week of June 25 to June 29.

AutoZone, Inc (NYSE:AZO)

Deutsche Bank raised its advice for AutoZone from hold to buy with a price target of $425. Analysts see some 16% upside potential for the distributor of automotive replacement parts. "Economic concerns should weigh against new car sales and gas prices are falling, both of which are favorable for comparables. Furthermore the company has potential to gain market share and expand operating margins due to stable pricing and operating leverage." Shares of AutoZone fell 4% last week on the back of the profit warning of competitor O'Reilly Automotive, Inc.'s (NASDAQ:ORLY) during the week. So far, shares have returned 13% year to date in 2012.

Qualcomm Inc. (NASDAQ:QCOM)

Cantor Fitzgerald rated Qualcomm as a new buy with a $66 price target. Analysts see 18% upside potential for the manufacturer of digital wireless telecommunication products. "We are bullish on the long term trends in wireless devices, however, in the near term, we are strictly concerned about dislocations due to macro-economic events". Shares of Qualcomm ended the week unchanged. Year to date shares trade flat after witnessing a serious correction from the peak of $68 in March to $56 at the moment.

The Boeing Company (NYSE:BA)

Oppenheimer raised its advice for Boeing from perform to outperform with a $90 price target. The aerospace and commercial airplane company has some 21% upside according to analysts as "investors are ignoring the building momentum for the Dreamliner. Macro-economic jitters and a recent slowdown in new commercial aircraft orders have caused investors to under-appreciate mounting evidence that the 787 program has finally begun to find its footing." The Farnborough Airshow should act as a near-term catalyst for shares in the coming weeks, according to the analysts. Shares of Boeing rose more than 3% this week, now trading flat for 2012.

Riverbed Technology, Inc. (NASDAQ:RVBD)

Needham & Co rates Riverbed Technology as a strong buy with a $25 price target. Shares in the information technology company focused on wireless area networks have an incredible 55% upside from their current levels, according to analysts. "Riverbed is trading at 13.3 times full year 2013's earnings, compared to historical price-earnings ratio's of 20-35 times. We think this is an exceptionally strong entry valuation, as soft first quarter results and a second quarter guidance have resulted in an almost 50% correction in the technology stock, which is an overreaction". Shares in Riverbed Technology have fallen 31% so far in 2012 to levels around $16 per share on the back of a weak second quarter earnings outlook in April.

Iron Mountain Inc. (NYSE:IRM)

Barclays Capital raised its advise for Iron Mountain from equalweight to overweight with a $39 price target. Shares in the information management service company, have some 18% upside potential according to analysts. "We are upgrading Iron Mountain to overweight as we believe that its transformation process is likely to prove successful and yield sharp upside in the stock over the next two years." Shares in Iron Mountain rose 7% year to date trading within a $28-$33 price trading range.


Needham & Co initiated eBay at a new buy with a $50 price target. Shares in the online market place and online payment service company have some 20% upside potential according to analysts. "We expect eBay's Payments segment to continue to grow rapidly, increasing revenues by 12% in 2013 which propels the Marketplace revenues to $8.3 billion, ahead of consensus. Solid growth could prompt management to revise the full year earnings guidance upwards." Shares of eBay have risen already 38% year to date. The stock has steadily drifted upwards as a result of strong quarterly results accompanied with a strong outlook.

Lender Processing Services, Inc. (NYSE:LPS)

Goldman Sachs upgraded Lender Processing to buy with a $27 price target. According to analysts, shares in the provider of integrated technology for the mortgage industry have some 7% upside potential. While shares have already returned 68% so far in 2012 the price increase "largely reflects the clearing and regulatory overhang. Further price triggers include the demand side origination and stable default volumes, both of which are positive signs." Shares in Lender Processing rose another 6% this week, marking year to date gains of 68%.

Oracle Corporation (NASDAQ:ORCL)

RBC Capital Markets raised its advice for Oracle from sector perform to outperform with a $36 price target. According to analysts, shares in the enterprise software company have some 21% upside potential based on an accelerating growth outlook. "Moderating comps and acquisitions could bolster new license growth opportunities. A number of catalysts could kick in more meaningfully in the coming quarters including a recent sales hiring spree, greater visibility for Oracle's cloud business and a $10 billion repurchase program." Shares in Oracle rose 6% on the week, marking year to date gains of 16% in 2012.


Stock markets ended the week with modest gains after the rally on Friday. Investors were hopeful that steps towards a European banking consolidation would finally provide some stability within Europe. As such, brokers have sent out favorable research reports again to clients. Many of the recommendations were made after the release of earnings reports, and often come after a large move to the upside. However, on the day of the announcement, analyst recommendations can still move the stock price significantly.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.