Each morning we cover numerous analyst upgrades, downgrades, and initiations from Wall Street research firms which we think will have an impact on stocks and sectors.  After each week we review those research calls and other research calls to see which ones really stood out or which ones had the most impact on each company and sector.  With a week of a 500 point drop on the DJIA in a day and almost 700 points down for the week, let’s just say that some of the calls can look a bit distorted.

The top analyst research calls of the week were as follows: Bank of America Corporation (NYSE: BAC); Brocade Communications Systems, Inc. (NASDAQ: BRCD); Dendreon Corporation (NASDAQ: DNDN); Dollar General Corporation (NYSE: DG); LinkedIn Corporation (NYSE: LNKD); Petrohawk Energy Corporation (NYSE: HK); Potash Corp. of Saskatchewan (NYSE: POT); RadioShack Corporation (NYSE: RSH); SanDisk Corporation (NASDAQ: SNDK); and Symantec Corporation (NASDAQ: SYMC).  We also highlighted some other key research calls which may have gotten lost in the market shuffle this week as follows: McDonald’s Corporation (NYSE: MCD); Teva Pharmaceutical Industries Limited (NASDAQ: TEVA); TravelCenters of America LLC (AMEX: TA); Wal-Mart Stores Inc. (NYSE: WMT); and Yahoo! Inc. (NASDAQ: YHOO).

Each call has been shown in the research summery along with a price target, and color or background data has been added if applicable.

The first measure is one we had already assumed was coming sooner or later.  The S&P downgrade of the United States to “AA+” from “AAA.”  Earlier this week we handicapped the other Triple-A nations and pointed to the other countries that would soon be at-risk as well.  Warren Buffett has chimed in noting that the impact should be limited.

Bank of America Corporation (NYSE: BAC) was an interesting downgrade on Friday, where Wells Fargo cut its rating to Cut to Market Perform from Outperform.  It just could not take the pain any longer.  As a reminder, our own theory is that one big bank upgrades or downgrades a rival bank they are really issuing the same call on their own bank.  S&P Equity Research also cut its rating on BoFA on Friday to Hold from “Strong Buy.”  Whoops! BofA was as high as $10.05 on Monday, but shares closed down at $8.17 on Friday.

Brocade Communications Systems, Inc. (NASDAQ: BRCD) tanked some 28% on Friday to hit a new 52-week low of $3.52 at the closing price but hitting $3.28 during the trading day.  Janney Capital threw in the towel and cut the rating to “Neutral” from “Buy.”  This is just one more bull losing faith and now the hope of a buyout cannot occur for quite some time.

Dendreon Corporation (NASDAQ: DNDN) was the unexpected implosion of the week.  Had it not been for a deadly stock market, this would have garnered far more media coverage as the biotech disappointment of the year.  The news caught us off guard and it caught almost all of the analyst community as you can see with this whole spread of analyst downgrades in unison.  By the way, some solid applause should be given to Credit Suisse since it has been very negative all along on this one.

Dollar General Corporation (NYSE: DG) has more than 30% upside if BMO is correct.  It started coverage of the king of dollar stores as Outperform with a $40.00 price target.  This is one of our ten stocks to own for the next decade, but we would note that the consensus target from Thomson Reuters is currently about $37.25 but the $40 target is still well short of the $49.00 ‘street high’ target out there.

LinkedIn Corporation (NYSE: LNKD) lost one more of its bullish cheerleaders.  Morgan Stanley cut its rating to “Equal Weight” from Overweight due to just how realistic a $9 billion valuation is whether it has grown 20% more in a short period of time or not.  This downgrade came after the online social networking site for business beat earnings and said sales had more than doubled.  Morgan Stanley was one of the book-runners of the LinkedIn IPO.

Petrohawk Energy Corporation (NYSE: HK) has lost one of its bullish firms after one massive rally.  Petrohawk is in the process of being acquired by BHP for about $12.1 billion, but some investors have said they think it is worth more.  Credit Suisse does not think so as it cut the rating to “Neutral” from “Outperform.”  In short, “Take your money and run” is what they are saying after nearly a 200% rise in the last year due to the buyout.

Potash Corp. of Saskatchewan (NYSE: POT) was given another bullish call with an implied 20% upside to it.  Zacks raised the rating to “outperform” and gave a $63.00 price target as it called it the notorious “Bull of the Day” on Friday.  The call is actually conservative for the bulls because the Thomson Reuters consensus price target is almost $69.00 as of Friday.

RadioShack Corporation (NYSE: RSH) can use all the help it can and perhaps the Verizon pact is one help.  What is offering at least some added fuel to the perpetual turnaround is that Goldman Sachs raised the rating to Buy and added the electronics retailer to its prized “Conviction Buy List.”  Unfortunately, the timing was a bit unlucky considering that the call was on Monday and the market tanked hard this week.  The call also only added 1% to the stock and shares still slid to $13.18 by Friday versus $13.92 before the upgrade was issued.  The target price was set at $18.00, representing more than 35% upside

SanDisk Corporation (NASDAQ: SNDK) is the leader of flash memory as far as being an independent pure-play producer is concerned.  Oppenheimer sees its rise continuing ahead as it initiated coverage of the company with an “Outperform” rating late in the week and gave a $65.00 price target.  That is more than 60% upside, even if the company is not immune to the woes of the technology sector today.

Symantec Corporation (NASDAQ: SYMC) has been dead money for longer than anyone could imagine.  It needs all the help it can get and the new chairman announcement may only be the first step.  FBR Capital Markets updated its analyst coverage late in the week and raised the rating to “Outperform” from “Market Perform” and raised the price target to $21.00 per share.  Keep in mind that each and every time that Symantec has risen above $20.00 it has not lasted for very long.

Here are some runner-up calls from earlier in the week that should still matter for longer-term investors which have ramifications beyond the week of selling:

McDonald’s Corporation (NYSE: MCD) was raised to Overweight at Piper Jaffray with a new $98.00 price target objective.  Not too shabby considering that McDonald’s has run up and held up in the sell-off and considering that Piper Jaffray was one of the more conservative firms on the stock.

Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) has lost yet one more bull as the MS study situation continues to add pain and suffering.  Oppenheimer cut its rating to “Perform” from “outperform” early in the week.  The pain is growing almost too much here as we were always evaluating Teva for its generic prospects as its real core business in the years ahead.

TravelCenters of America LLC (NYSE: TA) did not hold up well despite a very bullish call this week.  The travel center and gas station and trucker destination hardly has any coverage.  Citigroup initiated coverage early in the week with a BUY rating and an $8.00 price target objective.  Since the market spanked this one during the sell-off, that $8.00 objective now has 73% of upside if the call comes to fruition.

Wal-Mart Stores Inc. (NYSE: WMT) lost one of its few big bulls this last week after Jefferies cut the rating to “Hold” from “Buy” and took the price target down to $56.00 early in the week.  This one actually held up fairly well if you consider the week we saw.

Yahoo! Inc. (NASDAQ: YHOO) was the only repeat member on Gabelli’s Focus Five List of quarterly stock picks that came out this last week.  That list was up about 160% since January of 2006 when they started it.  Not bad at all, and Gabelli sees some 60% upside in the troubled online search and content giant.

As you can tell, the research week was more heavily loaded with end of week coverage.  That is what happens when the DJIA drops close to 700 points in a single week.  The U.S. debt downgrade from S&P after a near-700 point drop in the DJIA for the week will distract many of the great calls.  Without over-simplifying this last week, “Such is life.”

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.