Analyst Picks and Pans: Motorola, FedEx, Starbucks

Motorola Inc. (MOT)

Bank of America/Merrill upgrades to buy from neutral

BofA/Merrill analyst Tal Liani said on June 23 that the crux of his call is that Motorola's new handsets can help it regain market share in its key regional focus areas, including North America, Western Europe, and Latin America. While its handsets have greatly lagged the broader market, Liani thinks Motorola still has good brand equity with consumers, strong relationships with wireless carriers, and key distribution channels.

While investors will focus on head-head competition with Apple (AAPL), Research in Motion (RIMM), Palm (PALM), and Nokia (NOK), Liani notes there is still a good part of the mid- to high-end market where Motorola can reclaim share. He raised his $7 price target to $9.FedEx Corp. (FDX)

JP Morgan upgrades to overweight from neutral

JP Morgan analyst Thomas Wadewitz said on June 23 he believes strong operating leverage should drive performance for FedEx stock when there improvement in the economy. Also, he believes bad news regarding recent pressures is now reflected in the stock price. In his view, earnings per share (EPS) estimates have fully come down sufficiently that current consensus estimates are realistic, and he expects 2010 to clearly mark a bottom.

Lastly, Wadewitz expects gradual improvement in transport demand data points to drive upside for the stock while potential bankruptcy of YRC Worldwide (YRCW) provides another possible catalyst. He has a $66 price target on the shares.Starbucks Corp. (SBUX)

R.W. Baird upgrades to outperform from neutral

Baird analyst David Tarantino said on June 23 he has more confidence in the near-term outlook following his recent field research, which points to an improvement in category traffic trends in the company's third quarter. Tarantino says that while visibility related to a full-scale turnaround remains low, he thinks the downward risk/reward on Starbucks has become more attractive based on prospects for better traffic, cost savings initiatives to lead to upward EPS estimate revisions.

The analyst raised his target price on Starbucks to $17 from $15.