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Good morning. Here’s your daily equity research round up from the Street.Barclay’s:
Baker Hughes Inc. (BHI): Barclay’s has lowered its price target from $70 to $63 for the oilfield services company, primarily due to a slide in the number of U.S. rigs in the second half of 2012, and a slow increase in 2013. However, analyst James West maintains an overweight rating, anticipating future growth as activity ramps up in the future and the company continues to improve margins.
Eli Lilly & Co. (LLY): Jefferies has downgraded the pharmaceutical giant’s shares to underperform, and reduced its price target from $37 to $35. The downgrade comes as a result of the anticipated failure of solanezumab, a treatment for Alzheimer’s disease, in phase 3 clinical trials. Analyst Jeffery Holford anticipates only a 25 per cent chance that the drug will be effective, and that Lilly shares will fall 20 per cent should it fail. Holford doesn’t see anything with similar potential following in the pipeline.
Deere & Company (DE): The market has turned sour on Deere during the ongoing drought. However, PiperJaffray analyst Michael Cox has a bullish outlook, upgrading the stock to Overweight from Neutral. He believes that the market reaction is overdone, and that a combination of a resilient core business, increased investment due to high grain prices, and crop insurance for hard hit farmers will carry the company through the drought.
Merck & Co. (MRK) After a good second quarter, UBS analyst Marc Goodman has increased his price target from $45 to $50. Merck seems to be weathering the patent expiration of Singulair well, and maintained its guidance despite EU headwinds. The pipeline looks promising as well, data from Odanacatib and Cordaptive could be catalysts in the second half.