From Standard & Poor's Equity ResearchUBS FINANCIAL UPGRADES SAFEWAY TO BUY FROM NEUTRAL
UBS Financial analyst Neil Currie says Safeway (SWY) is not his top supermarket pick, but he's more positive on its track record of cost savings, stable sales, strong balance sheet and opportunity for relative outperformance.
Currie says the company has begun to address pricing relative to competitors'. He notes that Safeway is slowing capex and freeing cash flow to pay down debt to maintain flexible balance sheet.
He sees $2.15 2008 EPS and $2.24 for 2009. He thinks SWY has shown decent, stable growth in this environment from an inexpensive stock. He believes the stock's valuation is attractive and keeps $25 price target.
MORGAN KEEGAN DOWNGRADES BERRY PETROLEUM, BILL BARRETT, TXCO
Morgan Keegan analyst Chris Pikul says he downgrades Berry Petroleum (BRY), Bill Barrett (BBG) and TXCO Resources (TXCO) to market perform from outperform, as he repositions his universe to focus on companies with highest quality assets, strong balance sheets and best opportunities for low-cost reserve/production growth in a lower price environment.
Pikul notes in BRY's case, even though the company is appropriately managing liquidity position, it is poised to scale back drilling in 2009; he thinks lower-trending oil prices, high debt levels will likely discourage investors from BRY stock, barring a dramatic turnaround in oil prices.
JEFFERIES DOWNGRADES ALBANY MOLECULAR TO UNDERPERFORM FROM HOLD
Jefferies analyst David Windley says Albany Molecular Research (AMRI) has a high concentration of specialty pharma and biotech clients.
Windley notes he continues to collect data points indicating that smaller biopharmaceutical companies that rely on capital markets to fund operations are cutting back significantly on R&D projects. He says the problem is widespread and AMRI will almost certainly be negatively impacted.
He cuts his 10.1% 2009 revenue growth rate estimate to 7.2%. He lowers $0.57 2009 EPS estimate to $0.38. He cuts $10 price target to $8, in line with the peer group's current EBITDA multiple of 5.