Top Pre-Market Stock Upgrades/Downgrades May 17, 2013

UPGRADES

• General Motors (NYSE:GM) upgraded to Buy from Underperform at CLSA – CLSA upgraded General Motors two notches to Buy from Underperform and raised its price target for shares to $40 from $31. The firm is positive on GM’s product cycle in the U.S. and its turnaround in Europe

DOWNGRADES

• Applied Materials (NASDAQ:AMAT) downgraded to Neutral from Buy at DA Davidson – DA Davidson downgraded Applied Materials due to valuation
• Disney (NYSE:DIS) downgraded to Neutral from Overweight at Atlantic Equities – Atlantic Equities downgraded Disney due to valuation. Price target is $74.
• Deere (NYSE:DE) downgraded to Sell from Neutral at Goldman – Goldman expects a decline in U.S. ag equipment capex due to rising crop inventories and notes high U.S. dealer inventories above historical levels. As a result, the firm expects Deere earnings to be below consensus and downgraded shares to Sell and lowered its price target to $85 from $98

NEW COVERAGE

• Pandora (NYSE:P) initiated with a Sell at MKM Partners – MKM Partners Target $10
• Regeneron (NASDAQ:REGN) initiated with a Neutral at UBS – Target $290

HEADLINES

JC Penney (NYSE:JCP) will hold its shareholder meeting at 11 a.m. ET in Plano, Texas. The company delivered bottom line results that missed analysts’ estimates. JCP lost $348M during FQ4, for an adjusted per share loss of $1.31, worse than the Street expected. Revenues and same-store sales fell 16% and 17% respectively, in line with preliminary results announced earlier this month.

Dell (NASDAQ:DELL) delivers mixed reports. Sales for the first fiscal quarter came in higher than Wall Street had expected — though in line with an unusual set of leaks to the news media earlier this week that forced Dell DELL move up its earnings report by three days. Operating earnings plunged by 73% for the quarter, and the company did not give a forecast, citing its pending deal to go private that has sparked opposition from some large shareholders.

Autodesk (NASDAQ:ADSK) reported earnings and revenue that missed analysts’ expectations. The company blamed a “mixed global economy” and a “weak April” for the FQ1 miss. FQ2 guidance is for revenue of $550M-$570M and EPS $0.39-$0.44, below a consensus of $597.5M and $0.51. Revenue is now expected to grow ~3% in FY14, below analysts’ 5.9% projection

Nordstrom (NYSE:JWN) reported quarterly results that missed across the board Thursday evening as Q1 EPS of $0.73 and revenue of $2.7B both fell short of the Street’s expectations. Net earnings fell 2.7% Y/Y as higher input costs masked slightly better revenue and the company cut its FY14 total sales and same-store sales guidance ranges by half a percentage point each, saying it now expects 4% to 6% growth, and 3% to 5% growth, respectively. For the current period, it projects its EPS to grow by more than 7%, or around $0.86, just below the $0.87 projected by analysts.

The British parliament will call Amazon (NASDAQ:AMZN) back to testify before the Public Affairs Committee to explain how it justified paying just $9M in income tax on some $23B in sales to British customers over the past six years, Reuters said Friday, citing lawmakers. The company claims it should only pay tax in Luxembourg as it operates a single business in Europe from there, rather than multiple independent subsidiaries across the region. Reuters suggests this is a mischaracterization.

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