Wachovia upgraded American Italian Pasta (PLB ) to market perform from underperform, citing factors such as the company's improvinng cash position.
Analyst Jonathan Feeney says American Italian Pasta announced it obtained waivers to delay filings once again, but that its total liquidity has improved to $40 million since Sept. 28, including $21.8 million in apparent cash flow generation in the past 10 weeks. He notes that while the lack of financials restrains him, he sees nothing (such as major asset sales or seasonality) that would cause him to doubt that the company is generating cash from operations. He says that with $40 million in liquidity and only $250 million in net debt, this likely means there's room for the company to breathe. He says that without the looming Chapter 11, the risk/reward scenario for innvesting in the stock looks more balanced.