Stock Picks: Corning, Boston Beer

Corning Inc. (GLW)

Calyon Securities upgrades to buy from outperform; raises estimates, price target

After meetings with various Corning managers, Calyon analyst Steven Fox upgraded shares of the company on Dec. 16 on the expectation that its business is likely to pick up momentum "sooner than the Street is currently modeling", according to a Dec. 16 note to clients.

Fox cited recent retail trends in more mature markets, "benign" pricing on LCD panels, "surprising" LCD industry consolidation, and positive consumer trends out of China, which he thinks may drive a faster than normal start to 2010.

Fox raised his earnings forecast for 2010 to $1.65 per share from $1.59. He also raised his price target on the shares to $25 from $18.50.

Boston Beer Co. (SAM)

Deutsche Bank keeps hold; raises estimates, price target

Deutsche Bank analyst Andrew Kieley said in a Dec. 16 note that Boston Beer's new fourth-quarter earnings guidance of 40 cents to 70 cents per share (up from 10 cents-40 cents) topped his Street-high estimate of 45 cents and analysts' consensus view of 43 cents. Kieley said his new EPS estimate range is based on favorable near-term commodity costs, along with continued improvement in gross margins as the craft brewer "optimizes" its Lehigh, Mass., brewery.

The analyst said that the company's new guidance suggests volume trends remain "reasonably good" in the fourth quarter, with the higher earnings forecast appearing to be attributable to better costs, vs. major revenue acceleration.

Kieley raised his $2.10 per share 2009 earnings estimate to $2.25, and his 2010 forecast from $2.26 to $2.42. He also hiked his price target from $45 to $47. Magellan Health Services Inc. (MGLN)

Deutsche Bank upgrades to buy from hold

Deutsche Bank analyst Scott Fidel on Dec. 16 upgraded shares of Magellan Health Services a day after the health care outsourcing company raised its 2009 profit outlook and offered 2010 guidance.

In a note to clients, Fidel cited rising revenue and earnings growth prospects for next year, as well as the stock's "discounted valuation" compared to its five-year historical average.

Fidel also said the Avon, Conn., company has limited exposure to risk from the health care overhaul measures being debated by Congress.

"Given the solid outlook for 2010, we believe (Magellan) shares may be poised for a rebound as investors take a closer look at small-cap stocks that have not participated in the market rally this year yet are showing positive revenue and earnings momentum," Fidel wrote. Annaly Capital Management (NLY)

RBC Capital Markets Corp. upgrades to top pick

RBC Capital analyst Jason Arnold upgraded shares of Annaly Capital on Dec. 16, saying he expects performance for the New York City-based mortgage real estate investment trust to be at the upper end of its peer group in the year ahead.

In a Dec. 16 note, Arnold said Annaly's average borrowing costs are expected to trend lower (aided by swap repricing), while market rates should also remain low, supporting strong earnings performance.

"We believe those calling for near- term underperformance of the shares are missing the big picture," the analyst wrote in a note.

On Dec. 15, Bank of America Merrill Lynch analyst Kenneth Bruce downgraded Annally shares to "underperform", saying the downside risk associated with falling prices of mortgage-backed securities (MBS) "is no longer compensated for by an adequate dividend yield."

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