UPGRADES
athenahealth (NASDAQ:ATHN) upgraded to Strong Buy from Outperform at Raymond James
DOWNGRADES
Western Asset Mortgage (NYSE:WMC) downgraded to Neutral from Buy at Citigroup – Citigroup downgraded Western Asset Mortgage citing potential book value risk should the Fed start tapering purchases of agency mortgage backed securities. Citi lowered its price target for shares to $18 from $22
Brocade (NASDAQ:BRCD) downgraded at Morgan Stanley – As previously reported, Morgan Stanley downgraded Brocade to Underweight from Equal Weight. The firm cites execution concerns, lack of product cycles, secular pressures, and strategy changes for the downgrade. Price target is $4.50
NEW COVERAGE
SeaWorld (NYSE:SEAS) initiated with a Buy at KeyBanc – Target $45
Spectrum (NASDAQ:SPPI) initiated with an Outperform at Burrill – Target $12
HEADLINES
Smithfield Foods (NYSE:SFD) is reportedly close to selling itself to China’s Shineway in a deal worth $4.5-5B. The acquisition would represent a 25-30% premium over Smithfield’s close yesterday of $25.97. The speculation comes amid calls from large shareholders for the company to split up. Smithfield’s shares were +23.2% premarket at $31.99
Health Management Associates (NYSE:HMA) CEO Gary Newsome will retire after about five years in the job and will now head a Mormon mission in South America. News of Newsome’s departure came after Glenview Capital disclosed a 14.6% stake in HMA but said it doesn’t intend to bid for the company. HMA had adopted a poison pill plan on Friday in response to a Glenview notice that it could increase its stake in the company. HMA’s shares dropped 7.2% in AH trading
Citigroup (NYSE:C) has reached a settlement in an FHFA lawsuit that accused the bank of misleading Fannie Mae (OTCBB:FNMA) and Freddie Mac (OTCBB:FMCC) into buying $3.5B of mortgage-backed securities, although the terms of the deal weren’t disclosed. It’s the second settlement so far out of 18 securities fraud cases the FHFA filed against banks in 2011 over $200B-plus in MBSs sold to Fannie and Freddie
Chevron (NYSE:CVX) CEO John Watson is due to face at least four resolutions from activist shareholders at the company’s annual meeting today that are demanding that he be fired. Among the complaints are Chevron spending $1.2M on a failed campaign to oust the mayor of Richmond in California – where the company operates a major refinery – and trying to avoid a legal judgement on toxic waste in the Ecuadorian Amazon
Sprint (NYSE:S) and SoftBank (OTCMKTS:SFTBF) have reportedly received U.S. national security clearance for the Japanese company’s $20.1B acquisition of Sprint. As part of the deal, the government will be able to veto purchases of new equipment and it will establish a small oversight committee. The approval comes amid continued fears about cyber-espionage from China, with Dish (NASDAQ:DISH), which is also trying to acquire Sprint, ramping up the scare-mongering
Cook talks Apple (NASDAQ:AAPL) pipeline. “We have some incredible plans that we have been working on for a while,” Tim Cook said at an AllThingsD conference talk yesterday. Some of those plans could still involve a TV – Cook reiterated that the market is of “great interest” and that the current experience is outdated. For those waiting for an iWatch, Cook added that the wearable computing market is a very interesting area
Boeing (NYSE:BA) has retrofitted all 50 787 jets in operation with its modified battery system and will now be able to focus on delivering new airplanes. Boeing also plans to start the major assembly of the slightly larger 787-9 this week. The news comes days after All Nippon Airways resumed commercial Dreamliner flights.
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