Goldman Sachs upgrades Valero (VLO 65.93) to Buy from Neutral
UBS upgrades Juniper Networks (JNPR 20.52) to Buy from Neutral
SPWR Sunpower tgt raised to $70 from $52 at Merrill
BTU Peabody Energy upgraded to Buy from Hold at AG Edwards
Nollenberger believes there are three critical issues surrounding AMD in 2007-cash, private equity, and the x86 copyright. Net/net, they say the terms of the $2.2 bln MS 2006 Term Loan for AMD now appear onerous. They note that the loan can be restructured, but the backdrop is a polar opposite from the environment in the fall of 2006 to command any terms that could be benign for AMD. They think the $2.2 bln loan that must be satisfied is a tall order in and of itself; add the cash flow dynamic and they think they have a problem. Firm also notes that a private equity engagement, which could include a change of ownership, would trigger a change in the control provision of the MS 2006 Term Loan; this would transfer the loan of $2.2 bln to interested parties.
Roth lowers their tgt on NFLX to $17 from $20.50 noting that the co reported 1Q07 results in-line with analyst expectations but mgmt lowered rev guidance for FY07. Firm says Blockbuster's new Total Access program has slowed Netflix' new-subscriber pipeline dramatically and is forcing the co to squander much of its massive marketing outlay. Firm says NFLX's niche in the home video market will remain strong, but the co's competitive advantage has eroded and growth will likely normalize in 2008. They believe electronic rental continues to face considerable resistance from both content creators and consumers.
Piper Jaffray downgrades Amazon (AMZN)
Citigroup downgrades ConocoPhillips (COP) and ExxonMobil (XOM)
Lehman upgrades IBM (IBM)