div style="text-align: justify;"My favourite call today comes from Keybanc Capital Markets.br /br /They are upgrading span style="font-weight: bold;"Ashland (NYSE:ASH) /spanto Buy from Hold and are establishing a $53 price target given improved confidence that Valvoline can keep rolling on higher profitability, cost savings initiatives are ahead of schedule and the Hercules franchises have good room for earnings growth. While the stock has had a strong run since March 2009, they believe it is still attractive trading at an estimated FY10 EV/EBITDA multiple of 4.5x. Firm's price target is based on an estimated FY10 EV/EBITDA multiple of 6.0x.br /br /span style="font-weight: bold;"- 2010 EPS Estimate Increased: /spanKeybanc is raising their FY10 EPS estimate by $0.85 to $3.25 vs. their estimate of $3.00 for FY09. The year-over-year improvement looks for very modest volume growth, improved costs and flattish earnings for Valvoline.br /br /span style="font-weight: bold;"- Valvoline – Sustainable:/span The majority of the ...

div style="text-align: justify;"Citigroup is upgrading span style="font-weight: bold;"Advanced Micro Devices (NYSE:AMD/span) to Buy from Hold and raising price target to $5.50 (prev. $4.25).br /br /Firm notes they are upgrading AMD, given what they believe is a favorable risk/reward profile. They are raising our price target based on a sum of the parts of Global Foundries ($0.45) and Product Co ($5.08). Firm' estimates are tweaked given their more rigorous model for Global Foundries.br /br /span style="font-weight: bold;"Deep Discount to the Sector — /span3Q09 QTD, AMD shares are down 4.4%, underperforming the broader chip industry (SOXX up 14.5%, Samp;P up 11.6%). Citi recognizes that AMD’s competitive position is poor and its net debt position classifies the company as “low quality.” However, now trading at just 1.25x EV/sales, a 45% discount to the group (2.3x), they see risk/reward as favorable.br /br /span style="font-weight: bold;"Elements of Stabilization Evident/span — 3 fundamental factors are contemplated ...

div style="text-align: justify;"span style="font-weight: bold;"Mueller Water Products (NYSE:MWA)/span is upgraded to Buy from Hold at BBamp;T Capital Markets with a $6 price target established.br /br /Firm notes they believe the long-term story remains attractive, and the near-term outlook is showing notable signs of improvement. While the market is currently discounting both a potential housing bottom and further significant erosion in nonres construction, they believe the outlook for both markets will improve over the next year or so. Concerns remain, to be sure, as evidenced by the depressed stock price, but the firm expects fundamentals to start to improve going forward, pushing EPS and the stock price considerably higher. Simply put, they’ve seen enough stabilization to rule out a dire scenario, and believe they’ll miss it if we wait for confirmation of a housing and nonres rebound.br /br /span style="font-weight: bold;"Solid long-term story. /spanBBamp;T believes the long-term outlook remains bright, based ...

div style="text-align: justify;"Merrill Lynch/BAM is making a major call upgrading span style="font-weight: bold;"Citigroup (NYSE:C)/span to Buy from Underperform and raising their target price to $5.75 (prev. $2.50)br /br /The analyst Guy Moszkowski is upgrading C to Buy from Underperform because: in firm's view, credit quality is stabilizing; technical overhang of new-share issuance is past; and, given Citi’s new disclosure of core Citicorp vs non-core CitiHoldings, they see limited bookvalue downside potential. PO is $5.75, about Book Value.br /br /span style="font-weight: bold;"Consumer credit quality stabilizing; psychology shifting/spanbr /2Q bank results showed consumer credit delinquency stabilizing, which should drive better credit loss trends in quarters ahead. This is of course key for Citi and its large portfolio of mortgage and other consumer debt. With crisis largely past for Citi, we believe psychology on the company is changing.br /br /span style="font-weight: bold;"Technical risks have passed/spanbr /On July 30, Citi converted $58bn of Preferred ...

div style="text-align: justify;"Merrill Lynch/BAM is upgrading span style="font-weight: bold;"King Pharmaceuticals (NYSE:KG)/span to Buy from Neutral with a $14 target (prev. $10).br /br /Firm notes that while KG faces near-term headwinds, they believe these issues are already largely reflected in the stock’s low relative valuation. They believe that the approval and commercial success of Embeda, which could be the first “abuse-deterrent” opioid available in the US, could drive the shares higher over the next 12 months.br /br /span style="font-weight: bold;"Big market opportunity for less abusable product/spanbr /KG’s clinical work has shown that crushed Embeda capsules have a similar abuse potential relative to intact capsules, and significantly lower abuse potential relative to immediate-release morphine. This is important given that opioid abusers commonly crush drug to facilitate faster absorption (through oral, injectable, and nasal routes). At branded pricing, the firm estimates the long-acting morphine and opioid markets represent sales opportunities of $1.5bn and ...

Merrill Lynch/BAM is out with a major call upgrading span style="font-weight: bold;"Freeport-McMoRan (NYSE:FCX) /spanto Buy from Underperform and raising their target price to $87 (prev. $49).br /br /According to the firm the upgrade is based on a material upgrade to their copper price forecasts. Freeport is the largest pure-play copper miner and provides high leverage to firm's more positive copper view. Sensitivity to copper prices: a $0.10/lb change in copper is roughly $0.50 in EPS for FCX. span style="font-weight: bold;"They are raising their 2010 EPS to $9.25/sh (was $2.85)./span At this level of EPS, FCX should be able to generate over $10bb EBITDA and $10/sh of FCF. Dividend reinstatement also a high probability event for 2010.br /br /span style="font-weight: bold;"Move copper outlook to high-end of Street/spanbr /Firm is incorporating new base metal forecasts into our models. Their new copper price deck is as follows: 2009-$2.15/lb (was $1.76), 2010-$3.18/lb (was ...

div style="text-align: justify;"ThinkEquity is upgrading span style="font-weight: bold;"Human Genome Sciences (NASDAQ:HGSI) /spanto Buy from Accumulate and raising their rating to $26 (prev. $18).br /br /span style="font-weight: bold;"Firm notes they spent the past few days evaluating their model for Benlysta and conclude that their estimates are just too conservative. /spanThey believe BLISS-76 will, more likely than not, confirm the results seen in BLISS-52. Based on a revised model, they raise their price target to $26 per share, which justifies a raise of rating to Buy.br /br /span style="font-weight: bold;"ThinkEquity revised their model after speaking with several people in the industry and the company, which has done extensive primary research./span This analysis points to the fact that in the U.S., there are approximately 325,000 patients treated for some form of Lupus. They believe that at least two-thirds of that group are candidates for treatment with a biologic therapy, or approximately 200,000 ...

div style="text-align: justify;"Goldman Sachs is upgrading span style="font-weight: bold;"General Electric (NYSE:GE)/span to Buy from Neutral with a $15 price target (prev. $13) as as comments reported after the close by US House Financial Services Chairman Barney Frank suggest broadening support for regulatory reform that would not mandate the separation of GE Capital. While numerous uncertainties remain, Goldman is reducing their probability assumption for a costly GECS separation to 25% from 50% and this drives their higher target. Greater potential for a manageable regulatory outcome should prompt investors to focus on longer-term benefits of economic and credit stabilization to GE shares.br /br /span style="font-weight: bold;"Catalyst/spanbr /After the close, Bloomberg reported that Barney Frank indicated that GE and “manufacturers with finance businesses should be allowed to keep the units under a revision to rules that govern banking.” This seems to strengthen the view that legislative support for reform requiring GECS separation as ...

div style="text-align: justify;"Packaging/Paper group is on fire today after span style="font-weight: bold;"Packaging Corp. of America (NYSE:PKG) /spanblew estimates away last night.br /br /span style="font-weight: bold;"International Paper (NYSE:IP)/span looks to be the best play on PKG's results (up 15-16% pre mkt):br /br /span style="font-weight: bold;"- Deutsche Bank is upgrading IP to Buy from Hold/span and upping their price target to $24 saying that while significant risks remain, it is clearer amp; clearer that the containerboard industry has managed itself in a fundamentally different fashion over the past year.br /br /Prices reported in the trade papers have dropped $70-80/ton off last autumn's cyclical peak. However, prices were reported stable in June and appear stable again in July. Moreover, most industry players remain reasonably profitable at current price levels, despite a sharp drop in volumes. Industry consolidation, a proactive approach in managing supply amp; avoiding inventory overhang, and a weak US$ have all ...

div style="text-align: justify;"Meredith Whitney Advisory Group is upgradingspan style="font-weight: bold;" Goldman Sachs (NYSE:GS) /spanto Buy with a 12 month price target of $186.br /br /Firm notes their more bullish outlook on GS shares is deeply rooted in their sustained bearish stance on the US economy and state of US financials at large. Specifically, they expect a tsunami of debt issuance from federal/sovereign, state, and local governments ramping up debt issuance to fund woefully underfunded budget gaps. In addition, they expect corporate debt issuance to be at least 60% as strong as peak cycle levels reflecting sizable debt maturity rolls. What’s more, given fewer market players, not only is GS benefiting from market share gains on these products but more widely in derivatives products.br /br /To be clear, the firm notes reasons for liking GS stock today are drastically different than any they have had recommending the stock on and off ...