Let’s take a look at analysts’ morning notes.
- Footlocker: Upgraded from underweight to equalweight. Footwear and high-end department stores can raise prices significantly without degrading demand and are the best retail opportunities for investors.
- Monsanto Co.: Maintain buy. Its seed selling season is off to a solid start thanks to an early North American harvest and significantly higher payments. It has submitted all the necessary regulatory items for drought-tolerant corn and product is on track for approval in 2012. Its prepayments were up almost six-fold and increased $1.1 billion sequentially compared to the first quarter of 2010.
- BorgWarner: Buy to hold. The shares now look fully valued trading at a material premium to industrial conglomerates. The rating is lowered but the price target was moved up to $76.
- CME Group: Buy to hold. CME has risen over 20% since the beginning of the fourth quarter, outperforming the sector and the broader market. The recent strength was driven by healthy volumes, particularly around rates and commodities and while the long term outlook is still favourable we don’t see enough upside to maintain the buy.
- Syntel: Hold to buy. Price target increase from $50 to $57. Upgrading ahead of what we expect will be solid fourth quarter results, consensus 2011 growth estimates appear too conservative and attractive.
- Global Payments: Remain neutral. It is building a little momentum and had a solid overall quarter but it probably won’t move shares much.
- Janus Capital Group: Downgraded to underweight. It was the best-performing asset manager since Oct.31, but the sentiment is too positive. Despite great market conditions, fund performance has been very poor. Its fund sales are recovering like they are for the industry and it is on pace for new performance fees to hurt annual earning performance shares by $0.09 per share which is a big deal in our opinion.