Analyst Picks and Pans: Cisco, Goodrich, Wyndham, Boston Private

Cisco Systems (CSCO)

William Blair upgrades to outperform from market perform

Cisco Systems is winning new deals and benefiting from a broad economic recovery, William Blair analyst Jason Ader said Oct. 7 as he upgraded the company's stock.

"Our analysis suggests that there has been significant pent-up demand building over the last year for Cisco's products ... which has started to loosen up over the past few months," Ader told investors in a note.

Ader said Cisco is benefiting from new projects as well as "overdue network maintenance needs" that customers have been putting off during the recession. "From a competitive standpoint," Ader said, "Cisco has stepped up the pressure and has seen success from bundling and discounting."

He also praised Cisco's recently announced plan to acquire Norway's Tandberg ASA for $3 billion, a move he said will help the company make video communication "ubiquitous" in the business market. Ader said the potential growth of video helps offset some concern about slower growth in Cisco's core networking business.

Goodrich Corp. (GR)

FBR Capital Markets upgrades to outperform from market perform; raises price target

Analyst Patrick J. McCarthy of FBR Capital Markets upgraded airplane parts manufacturer Goodrich Corp. on Oct. 7, saying he expects airline travel to improve next year.

"Last quarter, the company noted that commercial passenger, regional/business travel and cargo markets were still challenging but that its aftermarket business appeared to be stabilizing and incremental end-market data appears to be supporting this as well," he wrote in a client note. "Also, while we are not free and clear from the economic recession's impact on commercial aerospace, signs of a modest recovery in 2010 travel seem to be improving."

Airline capacity is "finally dropping faster than traffic," McCarthy added.

McCarthy raised his price target to $65 from $46. The new target represents a premium of about 22 percent to Tuesday's closing price of $53.09.

Wyndham Worldwide (WYN)

Goldman Sachs upgrades to buy from neutral; raises price target

A move away from timeshare business and an ongoing shift toward a fee-for-service structure prompted Goldman Sachs analyst Steven Kent to upgrade Wyndham Worldwide on Oct. 7.

Kent said in a client note that he recently met with Wydham's management and determined that they are concentrating on selling off existing timeshare inventory and managing the sale of timeshares, condos and apartments as timeshare weeks without taking on more capital exposure.

"Over the next several quarters we expect Wyndham to continue to push itself towards becoming a fee-for-service company while in the meantime, generating significant cash flow as it moderates its timeshare development activities," he wrote.

Kent increased his price target to $26 from $18.

Boston Private Financial Holdings (BPFH)

Fox-Pitt Kelton upgrades to outperform from in line; raises price target

Recent and upcoming unit sales at Boston Private Financial Holdings will give the bank holding company enough cash to repay government bailout funds without a capital raise, Fox-Pitt Kelton analyst Thomas Alonso said on Oct. 7 as he upgraded the shares.

Alonso also increased his target price to $9 from $7 due to expected improvement to the company's capital levels and a lower-risk balance sheet following the sales.

On Oct. 6, Boston Private said it will sell its Westfield Capital Management unit to the division's management team now, rather than in 2014 as previously planned. Boston Private expects to receive cash proceeds of $59 million. The company will also receive 12.5% of Westfield's revenue for 8 years and a $5 million note due in one year.

In September, Boston Private said it sold its Florida-based Gibraltar Private Bank & Trust to a group of private investors for $93 million, as well as Boston-based RINET Co., a wealth advisory firm catering to very high net worth clients, for an undisclosed amount.

The sale of Gibraltar reduced Boston Private's exposure to risky assets, Alonso said. The company's improved capital ratio after the sales means it will likely be able to repay Troubled Asset Relief Program funds from the government, and provides flexibility for "other opportunities," Alonso said.

The Treasury Department gave Boston Private $154 million from TARP in return for preferred stock and warrants.

Before it's here, it's on the Bloomberg Terminal.