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Review Of Analyst Upgrades Last Week - Part XIV

|Includes:Allegiant Travel Company (ALGT), AXP, EQIX, MNK, PNRA

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 July 9th to July 13nd.

Allegiant Travel Company

Deutsche Bank raised its advice for Allegiant Travel Company (ALGT) from hold to buy with a $90 price target. Analysts see some 25% upside for shares in the leisure travel company. Analysts at Deutsche Bank note, "the past 18 months has been a period of transition for Allegiant Travel as it introduced a new aircraft type, gained ETOPS approval, commenced service to Hawaii, and increased its MD-80 seating density. We expect margin expansion through 2012 and into 2013." Deutsche Bank raised its 2013 earnings per share estimate from $4.00 to $5.00 and applies a 18 times earnings multiple to its forecast. Shares of Allegiant Travel Company rose 4% last week on the back of the upgrade from Deutsche Bank, marking year to date gains of 38%.


Deutsche Bank initiated its advice for Equinix (EQIX) with a buy recommendation and a $225 price target. Analysts see some 30% upside for the connector of worldwide data centers. Deutsche Bank's analyst said, "Our bullish view is based on two key factors. First, a positive outlook for global data center demand. Second, despite Equinix's outperformance year to date, current valuation does not appear to price in any upside from a REIT conversion, which we view as likely in 2014." Shares of Equinix did not manage to gain ground on the back of the upgrade this week, ending the week 3% lower. Year to date, shares have returned 67% already.


Bank of America/Merrill Lynch rated Questcor (QCOR) with a new buy and a $60 price target. Analysts at Bank of America see some 40% upside potential for the biopharmaceutical company. Analysts of the bank comment: "We believe Questcor has uniquely favorably fundamentals, due to 19 legacy indications for Acthar, orphan drug pricing, rapid revenue growth, low operating expenses and high margin-driven share repurchases. However, Acthar has no patent protection and we believe the risk of generic competition will remain an overhang." Shares of Questcor lost 14% over the week after "Citron Research", known from its short selling ideas issued a single digit stock price target for the next 18 months. Year to date shares of Questcor returned 4%.

Panera Bread

KeyBanc rates Panera Bread (PNRA) as a new buy with a $175 price target. Analysts see some 20% upside potential for the national bakery company. KeyBanc's analysts note: "Consistent with our favorable bias toward dominant brands with relevant niches, we believe Panera is well positioned to sustain 20% annual EPS growth. We expect the growth to come from expanding system units, same store sales growth and margin expansion." Shares of Panera rose more than 3% over the past week, trading with modest gains of 4% year to date, near the midpoint of its $140-$160 trading range.

American Express

Nomura upgraded American Express (AXP) from hold to buy with a $69 price target. Analysts see almost 20% upside potential for the global payment service provider. Analysts of the Japanese bank note, "American Express is well positioned for growth as the pool of US card industry profits shrinks. The company has evolved into a lower-risk, higher-return business. We are bullish on fee-based initiatives expected to be a meaningful contributor of revenues by 2014 with expense management likely be the driver of the next wave of earnings growth." Shares of American Express ended the week 1% lower as banking colleagues of UBS issued a negative stance for the global payment sector. Year to date shares of American Express delivered returns of 23% already.


Stock markets ended the trading week flat as investors are digesting the first corporate earnings reports for the second quarter. Despite some disappointing earnings reports, 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.