Stock Picks: Visa, Exxon Mobil, RadioShack

Visa Inc. (V)

R.W. Baird upgrades to outperform from neutral; raises price target

Shares of Visa Inc. climbed in premarket trading Dec. 14 as analyst David Koning of R.W. Baird upgraded the payments processor, citing improved transaction levels, volume and international travel. Koning also increased his share price target to $100 from $88.

"We expect reaccelerating growth over the next couple quarters, along with annual earnings-per-share growth of more than 20 percent over the next couple years, and expect both to drive strong stock performance over the next year," Koning wrote in a note to clients.

The analyst indicated that retail sales are getting better and international travel is not down as much as it was a year ago, which is helping Visa's business.

Additionally, on Dec. 11, Standard & Poor's said Visa will be added to the S&P 500 index after market close on Dec. 18. Visa, based in San Francisco, will replace telecommunications and network equipment company Ciena Corp. on the index.

Exxon Mobil Corp. (XOM)

Standard & Poor's Equity Research reiterates strong buy

Exxon Mobil agreed to buy U.S. gas producer XTO Energy (XTO) in an all-stock deal valued at $41 billion (including $10 billion in debt) on Dec. 11. S&P equity analyst Tina Vital said in a Dec. 11 note that she likes the deal, which she views as fairly valued.

Vital believes XTO's assets will compliment Exxon Mobil's growth plans in unconventional gas, adding that "XOM's technical expertise will unlock additional XTO’s resource potential".

Vital kept her price target for Exxon Mobil at $88.

RadioShack Corp. (RSH)

Barclays upgrades to overweight from equal-weight

Barclays analyst Michael Lasser said on Dec. 14 that he upgrades shares of RadioShack Corp. as he believes that the Fort Worth-based electronics retailer will see outsized earnings gains next year by accruing benefits of several steps it has taken in recent months. Lasser said he believes RadioShack's moves will lead to sharp increases in return on invested capital and free cash flow in coming quarters, which will drive the stock price higher.

During 2010, Lasser expects the company to benefit from the addition of T-Mobile as a wireless partner; a nationwide rollout of the iPhone in its stores; the launching of a new branding campaign; and other extensions to its business model such as managing wireless kiosks in Target stores.

Lasser has a $25 price target on the shares.

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