Dealreporter is out with an interesting piece on Bluegreen (NYSE:BXG) saying Diamond Resorts may find financing an acquisition of Bluegreen, the Florida timeshare company, challenging, according to bankers following the situation. “This is a tough thing to finance,” said an industry banker, adding that his bank would not lend towards a possible deal between the two parties. It is the wrong time to finance a timeshare transaction, commented a second banker who was familiar with the companies involved and had previously been involved in lending for transactions in the industry.

On 21 July, Diamond Resorts signed a non-binding letter of intent [LOI] relating to the acquisition of Bluegreen for USD 15 a share, or approximately USD 500m. The agreement allows for Diamond Resorts to conduct “extensive” diligence until 15 September. In its 18 July letter to Bluegreen, Diamond Resorts said it was “confident that it will be able to raise the financing necessary to consummate the proposed transaction.”

- Morgan Keegan is out with a decent call on Wachovia (WB) noting the shares outperformed last week, up 30.9% versus a 6.4% rise in the KBW Bank Index [BKX]. However, this rally followed a period of significant underperformance by WB shares between 07/23-07/25 when shares declined 23%, versus a 12% decline in the BKX.

They believe that last week's rally was mostly driven by short covering ahead of new CEO Bob Steel's meeting with the sell-side later today. The firm would be defensive and take profits ahead of the meeting as the reality is there are no easy fixes near term at Wachovia.

- Leerink Swann is back with some comments on Elan (ELN) following yesterday's PML related sell-off:

- Bottom Line: Report of two newly confirmed cases of PML in MS patients treated with Tysabri are likely to create significant volatility in Biogen Idec (BIIB) and ELN stocks today. But they believe the occurrence could create a positive long-term environment for the drug by demonstrating successful intervention using plasmapharesis (PLEX, initial details of which were presented at ECTRIMS in October 2007).

Leerink Swann is out defending Elan (ELN) saying they are making no changes to their valuation of ELN shares and view any weakness today as a buying opportunity.

The harsh sell off in the stock that could occur today will likely be fueled by overblown expectations for the Phase II data and the difficulty in presenting a cogent analysis of a complex trial in a complex disease in a 12-minute presentation.

Goldman Sachs is one of the few positive firms out on Elan (ELN) this morning after the company presented Phase II Bapineuzumab data last night:

- Data clearly shows a statistically and clinically meaningful effect in APOE4 -ve patients, but with no clear dose-response due to low patient numbers. Data in APOE 4 +ve patients not as negative as previously assumed, but investors are likely to stay cautious on this until proven otherwise.

JP Morgan is out very positive on Palm (PALM) saying their channel checks at more than 20 Sprint and Best Buy Stores yielded a consistent takeaway: there aren’t enough Treo 800Ws to meet demand. The firm is raising its F1Q09 estimates to above consensus. Reiterates Overweight.

Notablecalls: Rhymes with RBC Capital (see yesterday's post).

Mechel (MTL), Russia's largest coking coal miner, is unlikely to suffer the same fate as YUKOS, Russian First Deputy Prime Minister Igor Shuvalov was quoted by Russian news agencies as saying on Tuesday.

"I consider this a most unlikely scenario. Under probability theory we can't exclude anything, but if I had the option, I would rule it out. The most likely scenario is that the company will co-operate with the state authorities," Shuvalov was quoted by Interfax as telling reporters.

Several firms comment on Merrill Lynch (MER) after the company announced an $8.5 billion equity raise as well as a "substantial sale of U.S. ABS CDOs."

- Oppenheimer's Meredith Whitney notes this would reduce MER's CDO exposure by $11.1 billion. While MER has significantly diluted existing shareholders, they applaud this purging of assets as an attempt to cut its losses and focus on stabilizing its platform and righting the franchise towards growth. While MER's stock still sells at a premium to book value and is expensive in the firm's opinion, they believe the stock is getting closer to fairly valued levels as now the hardest work is behind the company.

RBC Capital is out with a major call on Palm (PALM) saying Palm's Q4/F08 Smartphone backlog (disclosed Friday in its 10-K) may lead to a Q1 (end Aug.) upside revenue surprise above Street estimates. Palm reports Q1 in late September.

According to the firm, Palm's disclosed Q4 backlog is $238M, (vs. $185M Q4/F07, $121M Q4/ F06). Past precedents (Q1 Smartphone rev = 1.9x-1.6x Q4 backlog for past 2 years) suggest Palm's Q1/F09 Smartphone results may be $380M+ (1.6x Q4 backlog), or est. $413M+ total revenue, well above $324M street, with implied EPS at ($0.04) vs. ($0.18) street.

RBC Capital is out very positive on Potash Corp. (POT) noting that not withstanding the potential for short-term share price volatility, they believe Potash Corp.'s current valuation represents an excellent buying opportunity for investors with a longer-term perspective. Strong earnings growth potential, a 2009E P/E multiple of 8.9x and 2009E free cash flow of $7.3 billion ($24.13/share) represent a few of Potash Corp.'s many attractive investment attributes. Based on its long-term growth potential and the implied all-in return to their price target, they view Potash Corp. as extremely attractively valued.

Based on their supply and demand outlook, they generally expect fertilizer market conditions to remain robust through the medium term. With respect to concerns over the sustainability of high fertilizer prices, Potash Corp.'s management indicated during the Q2'08 conference call that they have not seen any signs of demand destruction under the current fertilizer pricing environment.

FBR is out with a negative call on First Solar (FSLR) and SunPower (SPWR) after Solar Electric Power Association [SEPA], an industry association bridging the solar and utility industries, announced yesterday the results of its survey of utility companies (titled:"Utility Solar Electricity Market Survey"). Summary: (a) projected PV installations of ~2 GW, on aggregate, over the next three to five years in solar portfolio, versus >3 GW for CSPs across the U.S. utilities; (b) possible paradigm shift, with utilities owning the plants and PV suppliers becoming only turn-key providers (if ITC is given to utilities instead of third parties).

FBR notes that in their "best case" demand scenario analysis, for the excess capacity to be absorbed (thus helping with manufacturers' utilization rate of ~70%), U.S. mix of PV installations would need to increase from the current 4% to 15% by 2012, implying there would need to be > 5 GW of (aggregate) demand from the U.S. alone in that period. Assuming that the U.S. utilities market accounts for a large mix of the overall U.S. market, the results of the survey suggest that aggregate installation of 2 GW most likely won't be enough to absorb the kind of incremental capacity that will be available starting in CY09, unless PV module/system ASPs were to decline by >15% starting in CY09 to make them more competitive with alternatives like CSPs.

Two tier-1 firms are out positive on MEMC Electronics (WFR) this morning:

- Citigroup notes that following through on their cautious call into the Q, they think this is finally the peak of the bad news with the stock, at ~$40 aftermarket, now possessing a unique combination of attributes: inexpensive, and finally set up to beat and raise headed into late '08/early '09.

Several firms are commenting on Zimmer Holdings (ZMH) after the orthopedic device maker lowered its 2008 profit and sales forecast and suspended U.S. sales of one of its hip products on Tuesday, sending its shares nearly 10 percent lower:

- Piper Jaffray is downgrading the stock to Neutral from Buy due to: 1) concerns raised by their ortho survey and field checks, and 2) product- and DOJ-related issues facing the company. The firm notes they are big believers of orthopedics, but there are several near-term issues making them more selective - and more cautious on ZMH specifically. They would view any near term strength as an opportunity to rotate into other names in their universe with fewer near-term challenges.

Assured Guaranty (AGO) is trading down 50% in pre-market after the company announced Moody's decision to put its top rating on the company under review. Moody's Investors Service said on Monday it may cut its top ratings on Assured Guaranty due to concerns about securities it guarantees and raising questions over the future need for bond insurance.

"Although we view the commentary from Moody's as extremely vague, we feel the rating agency is taking an ultra-conservative stance given its sustained misjudegment of the larger and more troubled bond insurers over the last 12 months," JPMorgan analyst Andrew Wessel wrote in a note to clients. He lowered AGO to Neutral from Overweight and booted the stock out of firm's Focus List.

Several firms are out with comments on Apple (AAPL) following results out last night:

- Piper Jaffray maintains their Outperform and $250 target saying that while the focus today will be anxiety over gross margin, they expect by the end of the September quarter, the Street will likely look past margin guidance and focus on product transitions, along with the positive impact these products will have on revenue growth.

Merrill Lynch upgrades Biogen-Idec (BIIB) to Buy from Underperform based on their assessment of the company’s earnings growth potential, an improved outlook in the multiple sclerosis [MS] market, and a diversified mid to late-stage pipeline. Applying an average biotech P/E of 19x 2009E EPS (implied PEG of 1.0), they believe BIIB is significantly undervalued given expected growth, driven by acceleration of Tysabri usage in MS and the recent launch in Crohn’s.

Key near-term drivers include better-than-expected Q2 earnings and a Tysabri/PML update, which they believe is likely to be favorable. Additionally, with a 9% price increase for Avonex and 3% for Tysabri at the end of Q2, the firm expects the company to raise guidance for FY 2008. Merrill believes the Street has largely ignored BIIB’s fundamentals given the PML overhang and activist movements. These fundamentals continue to improve, making BIIB an attractive large-cap pick in H2 2008.

Goldman Sachs notes Nucor's (NUE) stock price fell over 10% as it reported earnings that were ahead of expectations for 2Q but offered guidance that fell short of consensus expectations for 3Q. GSCO hase modestly lowered their 3Q and 4Q2008 EPS estimates to $1.95 and $1.90, from $2.17 and $1.92, respectively, mostly to reflect higher scrap costs and additional LIFO charges. Their new 2008 estimate comes down to $7.20 from $7.40, but they left unchanged 2009, 2010 and normalized estimates of $8.70, $9.85 and $8.85, respectively, which reflect volume growth and margin enhancement from valued added products.

GSCO thinks investors are over-reacting to fear of a weaker US economy and a potential global slowdown. Steel markets globally are in deficit, and there continues to be strong demand trends in BRIC and other developing nations that are straining global supply and more than offsetting demand weakness in US markets. And the weak US dollar is allowing increasing export growth for steelmakers at higher prices and margins. They see the steel cycle as very sustainable and look for continued strong earnings.

We have lots of negative comments on Wells Fargo (WFC) this morning:

- UBS is downgrading their rating to Neutral from Buy following yesterday's run up.

Canaccord Adams is out with a huge call on Research in Motion (RIMM) after they conducted their mid-quarter channel checks with leading global handset carriers and partners, including AT&T (T), Vodafone (VOD) and Verizon (VZ). They did this to ascertain the fact and fiction of some recent comments made on Wall Street.

Canaccord believes that RIMM's device shipments and activations are about 20-30% ahead of plan for June and July up to the 14th for all carriers. At AT&T, June came in at 20% above May, and July is tracking, based on data up to Monday, to be flat to up 5% (yes, the iPhone carrier). Blackberry sales have seen no adverse impact from the recent iPhone 3G launch.

On July 15, CNBC reported that SK Telecom (SKM) is in talks with Sprint (S) to acquire part or all of Sprint. The report added that no deal is imminent and no price has been set at this juncture. Meanwhile Reuters reported that SKT is in talks with Sprint on a technology alliance, rather than a takeover.

- Citigroup notes SKM remained silent on this news, but they view it as highly likely that SKT is looking for opportunities around Sprint to scale up its US presence. Combining Helio with Virgin still leaves it with a subscale US presence. Citi thinks SKM believes it has competitive edge in technology to make a difference.