Disproportional Upgrades to Downgrades - What Analysts May be Missing

Take note that over the past few horrible days for stocks, upgrades have greatly outnumbered downgrades. That’s because analysts are seeing the stocks they follow fall further and further from their target prices. What they may be missing though is the reason the market is lower to begin with, which may not be as insignificant to the individual stock stories as the analysts who are enamored by them believe. If the risk free rate is adjusted higher, the cost of capital increases for corporations across the board, and so valuations and price targets should fall universally. Thus, the decline in stocks over the past few days is appropriate due to the scenario risk escalated by S&P.

Disproportional Upgrades to Downgrades

STOCK UPGRADES:

COMPANY	ANALYST’S FIRM	FROM	TO
Ameren (NYSE: AEE)	Wunderlich	Sell	Hold
Archer-Daniels (NYSE: ADM)	Standpoint Research	Hold	Buy
Ares Capital (Nasdaq: ARCC)	Ladenburg Thalmann	Neutral	Buy
Atmel (Nasdaq: ATML)	FBR Capital	Market Perform	Outperform
Bill Barrett (NYSE: BBG)	Canaccord Genuity	Hold	Buy
C.H. Robinson (Nasdaq: CHRW)	Robert W. Baird	Neutral	Outperform
Camden Property (NYSE: CPT)	Robert W. Baird	Neutral	Outperform
Campus Crest Communities (NYSE: CCG)	Robert W. Baird	Neutral	Outperform
Crocs (Nasdaq: CROX)	Standpoint Research	Hold	Buy
EMC (NYSE: EMC)	Auriga	Hold	Buy
Home Properties (NYSE: HME)	Robert W. Baird	Neutral	Outperform
Intel (Nasdaq: INTC)	Standpoint Research	Hold	Buy
Jacobs Engineering (NYSE: JEC)	Standpoint Research	Hold	Buy
NetApp (Nasdaq: NTAP)	Auriga	Hold	Buy
PDC Energy (Nasdaq: PETD)	C.K. Cooper	Hold	Buy
ProAssurance (NYSE: PRA)	Wunderlich	Hold	Buy
Royal Dutch Shell (NYSE: RDS.A)	Oppenheimer	Perform	Outperform
Companhia de saneamento Basico (NYSE: SBS)	Standpoint Research	Hold	Buy
Safeway (NYSE: SWY)	Standpoint Research	Hold	Buy
Starbucks (Nasdaq: SBUX)	Robert W. Baird	Neutral	Outperform
Transdigm Group (NYSE: TDG)	KeyBanc Capital Markets	Hold	Buy
True Religion (Nasdaq: TRLG)	Standpoint Research	Hold	Buy
UDR (NYSE: UDR)	Robert W. Baird	Neutral	Outperform
Wells Fargo (NYSE: WFC)	Sterne Agee	Neutral	Buy
YUM! Brands (NYSE: YUM)	Robert W. Baird	Neutral	Outperform

STOCK DOWNGRADES:

COMPANY	ANALYST	FROM	TO
Argonaut Group (Nasdaq: AGII)	RBC Capital Markets	Outperform	Sector Perform
Cheesecake Factory (Nasdaq: CAKE)	Robert W. Baird	Outperform	Neutral
CSX (NYSE: CSX)	Robert W. Baird	Outperform	Neutral
Interline Brands (NYSE: IBI)	BB&T Capital Markets	Buy	Hold
JB Hunt Transport (Nasdaq: JBHT)	Robert W. Baird	Outperform	Neutral
Summit Hotel (NYSE: INN)	KeyBanc Capital Markets	Buy	Hold
Sunpower (NasdaqGS: SPWRA)	Brigantine	Hold	Sell
Texas Instruments (NYSE: TXN)	FBR Capital	Outperform	Market Perform
Texas Roadhouse (Nasdaq: TXRH)	Robert W. Baird	Outperform	Neutral
Veolia Environnement (NYSE: VE)	Brean Murray	Buy	Hold

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