The Top 8 Analyst Calls of the Week (ALU, AA, APC, AAPL, ATML, GLD, IAU, KGC, NFLX, POT)

This week’s “Top Analyst Calls” is a much more inclusive list than it has been of late, and this week have selected “8 Top Analyst Calls of the Week” rather than just five as we normally choose.  The reason is that there are so many calls in the first few weeks of the new year as analysts tweak their price targets and estimates for the next quarter and out to two years.  As you will note, these are more theme-based because of multiple calls on the same topic and issue in many cases.

There is a unlikely source showing the breakdown of the Alcatel-Lucent (NYSE: ALU) turnaround and a duel in Alcoa, Inc. (NYSE: AA) ahead of earnings.  Some caution has arisen in Anadarko Petroleum Corporation (NYSE: APC).  Apple Inc. (NASDAQ: AAPL) and Atmel Corporation (NASDAQ: ATML) have seen many updates.  We have a three-in-one for Gold after five straight down-days in the ETF via calls in SPDR Gold Shares (NYSE: GLD), iShares Gold Trust (NYSE: IAU), and Kinross Gold Corporation (NYSE: KGC).  We also have a big standout call that was seen on Netflix, Inc. (NASDAQ: NFLX) and some adjustments coming to targets in Potash Corp. of Saskatchewan (NYSE: POT).

On all eight of these grouped calls we have consolidated each down as best as we could, shown the impact and the performance, highlighted the concurrent data, shown how the calls compare to a consensus, and added in color and commentary where applicable.

Alcatel-Lucent (NYSE: ALU) is not one you see many analyst calls on today, and Motley Fool is certainly far from our first stop of research.  All that being said, Alcatel-Lucent stood out this last week in a note titled “Is Alcatel-Lucent the Perfect Stock?” Sounds promising, but it is far from it.  Dan Caplinger lined it up on ten data points to see if it fit the criteria and Alcatel-Lucent did not score a single point.  This was a “stay the hell away” call, and if it is close to accurate then that long-awaited turnaround is just not going to be seen this year.  Alcatel closed out 2010 a week ago at $2.96 and it closed out this last week at $2.98 after having closed once at $3.00 and once more at $3.01 earlier in the week.  Oddly enough, Thomson Reuters shows a consensus price target of roughly $4.00.

Alcoa, Inc. (NYSE: AA) is due with earnings on Monday after the close to kick off the 2011 earnings season for Q4-2010 and the Q1-2011 and Full Year 2011 guidance.  Now that shares have run up so much, Citigroup downgraded the stock to HOLD from BUY as the shares approached its $17 price target.  This was on the heels of an opposite call from Deutsche Bank on Monday, making this an analyst duel for the earnings anticipation for Monday.  Alcoa shares closed out 2010 at $15.39 a week ago, but the stock closed out the week at $16.42 this last week.

Anadarko Petroleum Corporation (NYSE: APC) took yet another downgrade this week.  Wells Fargo removed its Outperform rating and gave a lower “Market Perform” rating.  The call was on “valuation.”  Again, Anadarko remains a possible buyout target according to Wall Street traders and the price talk (or more like hope) is closer to $90…. This call is the second such downgrade we have seen after the rumors surfaced.  As noted in last weekend’s top analyst reviews of the week before, Bank of America/Merrill Lynch says that more like $110 is a better starting point in a break-up or buyout valuation.  Anadarko shares closed out 2010 at $76.16 just a week ago and shares closed out this last week at $74.67.

Apple Inc. (NASDAQ: AAPL) is one that almost everyone loves and there were many calls this week.  Shares closed the week at $336.12 with a market cap of $308 billion versus the 2010 close out price the Friday before of $322.56.  All of this is ahead of earnings this month and ahead of the Verizon iPhone, meaning many more formal targets are likely to be lifted this week.  The consensus target from Thomson Reuters is now almost $375.00 and that is likely to adjust higher as all the analysts play catch-up.  Some of the key analyst calls in Apple that we saw this last week were as follows:

• Wedbush started Apple as Outperform with a $405 target;
• Deutsche Bank added Apple to its Short-Term Buy List with a $410 target;
• ISI raised its target to $400;
• Oppenheimer raised its target to $385.

Atmel Corporation (NASDAQ: ATML) had a good week having closed out 2010 at $12.32 and closing out Friday at $13.49.  In fact, after looking at the data it shows that Atmel has closed up for 7 consecutive trading sessions.  Not bad, not at all.  Analysts are playing catch-up as Thomson Reuters shows a consensus target still down at $12.25 that likely has a lag.  Its 52-week trading range is $4.29 to $13.90 for gains of close to 150% for 2010. There were three calls this week that helped to drive shares, with one negative call:

• Wedbush started it with an “Outperform” rating sand a $18.50 target;
• Goldman Sachs is still way behind but raised its target to $10.00 from $7.25;
• Gleacher & Co. cut it to Neutral from Buy on valuation.

GOLD IN THEM THAR HILLS…… Gold was in the gutter this week, and we have three different instruments that which are all a part of the same trend rolled into one. SPDR Gold Shares (NYSE: GLD), iShares Gold Trust (NYSE: IAU), and Kinross Gold Corporation (NYSE: KGC) as one of our top gold stocks for 2011 all culminate into the three-in-one here.  Our technical analysis affiliate is Adam Hewison of INO and his short audio-video shows that $1,362.00 per ounce on spot gold is the level to watch intermediate and long-term is still up, but near-term we are at key levels despite gold being oversold in a trading range for the last several months.  Hewison hopes we are close to a bounce and current support has to be watched short-term.  The other big call on gold was the “still bullish S&P call” on energy and materials, where S&P surmised that gold would finish 2011 around the $1,600.00 per ounce level.  If that holds true, then there would be implied targets of roughly $158 to $159 on SPDR Gold Shares (NYSE: GLD) and targets of roughly $15.80 to $15.90 on the iShares Gold Trust (NYSE: IAU).  As far as Kinross Gold Corporation (NYSE: KGC), that $18.10 level we spotted on Tuesday as our level (with hedges) ended up at $17.52 on Friday.  If gold makes it back to $1600 an ounce, only execution faltering would prevent Kinross from challenging well above $20.00 per share.

Netflix, Inc. (NASDAQ: NFLX) was back in the target zone for analysts this week.  They key call which stood out the most was an initiation of coverage from Gabelli & Co. with a SELL rating and a $144 price target objective on the stock.  Oddly enough, Netflix closed out 2010 at $175.70 and closed out this last week at $179.30.  The implications of the call made it the standout because many feel that the stock is overvalued even if it hits its growth targets.  Thomson Reuters lists a mean target consensus on Netflix of $148.22.

Potash Corp. of Saskatchewan (NYSE: POT) may be on the heels of Mosaic and Monsanto earnings gains this last week but there are three key analyst calls that are effectively the same trends.  The analyst community is deciding that the busted merger is “oh so 2010” and ratcheting targets higher.  If what came from Mosaic and then from Monsanto remains, then Potash Corp. with its biggest market cap of peers is going to be a hot-bed in 2011.  Three calls came this week, all above the $161.50 rough target as a consensus that makes us believe more target price hikes are coming:

• Boenning & Scattergood started coverage at “Outperform” with a $190 price target;
• Canaccord Genuity raised its target to $185 from $175;
• UBS raised its target to $185 from $165.

You can expect another busy week of analyst upgrades and downgrades in the week ahead.  It is not just over earnings season.  Many research units at key brokerage firms were all but shut down for the last two weeks of December.

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JON C. OGG