From Standard & Poor's Equity ResearchCITIGROUP UPGRADES CHUBB, TRAVELERS TO BUY FROM HOLD
Citigroup analyst Joshua Shanker says AIG () is the largest insurer in the world and a major source in almost every line/geography. He says large amounts of its business could be in play on ratings downgrades.
Shanker sees Chubb (CB) and Travelers (TRV) as major beneficiaries of AIG's situation, especially in the commercial insurance business; he upgrades CB and TRV to buy from hold.
He thinks the sector is attractive and currently recommends 14 of 23 names in his coverage universe. He also notes that property-casualty insurance companies generally have cleaner balance sheets than other financials, as insurance regulators have strict asset allocation guidelines.
He says would also focus on ACE Ltd. (ACE) (maintains buy), whose global platform is really only rivaled by AIG.
UBS FINANCIAL DOWNGRADES MICRON TECHNOLOGY TO NEUTRAL FROM BUY
UBS Financial analyst Uche Orji says he downgrades Micron Technology (MU) and cuts $7.25 12-month price target to $5.00 on his belief that: 1) acquisition of Qimonda (QI) is highly probable and would be highly dilutive; 2) fab integration and weak macro increase operating risks; 3) funding is uncertain given tight credit markets.
Orji notes, however, if MU successfully weathers the macro and integration risks, a QI deal would be long-term positive given increased scale and breadth and cost effective 300mm capacity expansion. He says his outlook for weak memory fundamentals well into 2009 is unchanged.
He cuts EPS estimates (GAAP) of $0.14 for fiscal year 2009 (August) to $0.30 loss and $0.42 for fiscal year 2010 EPS to $0.31 EPS.