Security News Highlights

11/21/14

“In an unexpected move Friday, China’s central bank cut interest rates. The rate cut is intended to jump start slowing growth. China’s economic growth fell to a five-year low last quarter. Manufacturing and other key economic indicators have been weak.”

Global markets rallied on the move, and U.S. stocks opened the trading day up sharply.

The Chinese and European central banks’ moves are a sign global economies are in very different places than their U.S. counterpart. “Here we have two other very large central banks joining Japan in being very aggressive in trying to get out of the deflationary trap, trying to make things grow faster while in the U.S. the Federal Reserve is looking for an opportunity to do the opposite,” Yahoo Finance Senior Columnist Michael Santoli says.

The S&P 500gained 1.2% to 2,063.50 this week, a new record high, while the Dow Jones Industrial Average rose 1% to 17,810.06, also a record. The Nasdaq Composite advanced 0.5% to 4,712.97, its highest close since March 2000 and the small-company Russell 2000 ticked up 0.1% to 1,172.42

Intel (Nasdaq: INTC) $36.46. Intel moving to new highs early after the company announced Thursday that its board of directors has approved an increase in its cash dividend to 96 cents-per-share on an annual basis, a 6-cent increase, beginning with the dividend that will be declared in the first quarter of 2015. Intel also provided the 2015 business outlook: revenue growth is expected in the mid-single digits; gross margin percentage: 62 percent, plus or minus two points; and R&D plus MG&A spending: spending as a percent of revenue is expected to be down with spending of approximately $20 billion, plus or minus $400 million

Foot Locker (NYSE: FL) $59.19. Foot Locker popped early, but saw pressure the rest of the session Friday after it reported Q3 EPS of $0.82, $0.03 better than the analyst estimate of $0.79. Revenue for the quarter came in at $1.73 billion versus the consensus estimate of $1.72 billion. Third quarter comparable-store sales increased 6.9 percent, said Foot Locker

Berry Plastics Group (NYSE: BERY) $27.87. Berry Plastics Group reported Q4 EPS of $0.24, $0.13 worse than the analyst estimate of $0.37. Revenue for the quarter came in at $1.31 billion versus the consensus estimate of $1.33 billion. Shares rose as much as 5.7 percent on the session.

Intuit (Nasdaq: INTU) $95.42. Intuit reported Q1 EPS of ($0.10), $0.10 better than the analyst estimate of ($0.20). Revenue for the quarter came in at $672 million versus the consensus estimate of $620.8 million. The company said it expects Q1 2014 EPS of ($0.11) – ($0.13) and revenue of $780 – $800 million, versus the consensus EPS estimate of ($0.11) and revenue of $767.5 million.52-Week Low:Lexicon Pharma (Nasdaq: LXRX) $0.90. Lexicon Pharma announced the pricing of its previously announced underwritten public offering of $50,000,000 of shares of its common stock pursuant to an effective shelf registration statement. The offering will consist of 49,751,244 shares of common stock at a public offering price of $1.005 per share. The company also announced that it has priced its offering of $80,000,000 aggregate principal amount of 5.25% Convertible Senior Notes due 2021 in a private offering within the United States. The Convertible Notes were offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Lexicon has also granted the initial purchasers an option to purchase up to an additional $15,000,000 aggregate principal amount of the Convertible Notes on the same terms and conditions, solely to cover over-allotments. Lexicon expects to close the offering on November 26, 2014, subject to the satisfaction of customary closing conditions.

Molycorp, Inc. (NYSE: MCP) $1.12. On November 20, 2014, Molycorp, Inc., entered into an exchange agreement with a holder of the Company s 6.00% convertible senior notes due 2017 (the 2017 Notes ) and 5.50% convertible senior notes due 2018 (the 2018 Notes , and together the with the 2017 Notes, the Notes ) pursuant to which such holder agreed to exchange $27 million in aggregate principal amount of the 2017 Notes and $11 million in aggregate principal amount of the 2018 Notes for up to a maximum of 15,056,603 shares, but not less than 11,239,436 shares, of the Company s common stock, par value $0.001 per share (the Common Stock ). The Company will also pay the holder accrued but unpaid interest through the date of completion of the exchange in cash. The aggregate amount of shares of Common Stock to be issued in the exchange will have an agreed-upon value of $15,960,000. The actual number of shares of Common Stock to be issued in the exchange is based on a seven-day volume-weighted average price per share of the Common Stock for the period ending December 2, 2014, subject to an agreed per share floor and cap price.

Amedica Corporation (Nasdaq: AMDA) $0.90. Amedica announced that it has priced a firm commitment underwritten public offering of 11,441,646 units at a price to the public of $1.14 per unit for gross proceeds of approximately $13.0 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by Amedica. Each unit consists of one share of Amedica common stock and one warrant to purchase one share of common stock. The warrants have an exercise price of $1.48 per share, may be exercised on a cashless basis and will expire five years from the date of issuance. In addition, Amedica has granted the underwriters a 45-day option to purchase up to 1,716,246 additional shares of common stock, and/or 1,716,246 additional warrants, or any combination thereof, solely to cover over-allotments, if any. The offering is expected to close on or about November 26, 2014, subject to customary closing conditions

MOL Global, Inc. (Nasdaq: MOLG) $4.29. MOL Global hit after it announced that Mr. Allan Wong, who joined the Company in August 2014, has tendered his resignation as the Group Chief Financial Officer of the Company, effective immediately, due to personal reasons. The company also rescheduled the date it plans to release its third quarter 2014 financial results to Wednesday, December 3, 2014 before market opens.

Datawatch Corp (NASDAQ: DWCH) 16.8% LOWER; reported Q3 EPS of ($0.18), $0.01 better than the analyst estimate of ($0.19). Revenue for the quarter came in at $9.05 million versus the consensus estimate of $10.17 million.

Second Sight Medical Products, (NASDAQ: EYES) 13.2% HIGHER; after gaining 122% in its IPO debut today shares are continuing higher.

Caesars Entertainment (NASDAQ: CZR) 11.4% HIGHER; proposal said to turn operating unit into REIT. According to Bloomberg, Caesars’ plan would turn Caesars Entertainment Operating Company into a property company which would own Caesars’ casinos and would also manage them.

Jumei Int’l (NYSE: JMEI) 9% LOWER; reported Q3 EPS of $0.14, in-line with the analyst estimate of $0.14. Revenue for the quarter came in at $157.7 million versus the consensus estimate of $168.8 million.

America’s Car Mart (NASDAQ: CRMT) 9% HIGHER; reported Q2 EPS of $0.83, $0.17 better than the analyst estimate of $0.66. Revenue for the quarter came in at $133.8 million versus the consensus estimate of $120.7 million.

RGS Energy (NASDAQ: RGSE) 8.5% LOWER; reported Q3 EPS of ($0.09), $0.04 better than the analyst estimate of ($0.13). Revenue for the quarter came in at $18.9 million versus the consensus estimate of $35.1 million.

Bon-Ton Stores (NASDAQ: BONT) 8.2% LOWER; reported Q3 EPS of ($0.57), which may not compare with the analyst estimate of $0.10. Revenue for the quarter came in at $642.7 million versus the consensus estimate of $670.4 million. Adjusted EBITDA was $28.37 million, from $38.44 million posted in Q313.

Hillenbrand (NYSE: HI) 8% LOWER; reported Q4 EPS of $0.61, in-line with the analyst estimate of $0.61. Revenue for the quarter came in at $468.7 million versus the consensus estimate of $469.1 million. Hillenbrand sees FY2014 EPS of $2.05-$2.15, versus the consensus of $2.23.

El Pollo Loco (NASDAQ: LOCO) 7.7% LOWER; announced the pricing of its public follow-on offering by certain of the Company’s stockholders of 6,000,000 shares of the Company’s common stock at a price of $27.00 per share.

GoPro, Inc. (NASDAQ: GPRO) 6.8% LOWER; announced the pricing of its follow-on public offering of 10,360,500 shares of its Class A common stock at a price to the public of $75.00 per share

Williams-Sonoma (NYSE: WSM) 6.7% HIGHER; reported Q3 EPS of $0.68, $0.05 better than the analyst estimate of $0.63. Revenue for the quarter came in at $1.14 billion versus the consensus estimate of $1.2 billion. Williams-Sonoma sees FY2014 EPS of $1.42-$1.50, versus the consensus of $1.53. Williams-Sonoma sees FY2014 revenue of $1.525-1.575 billion, versus the consensus of $1.57 billion. Comparable brand revenue growth in Q4 14 is expected to be in the range of 4% to 6%.

Best Buy (NYSE: BBY) 6.3% HIGHER; reported Q3 EPS of $0.32, $0.07 better than the analyst estimate of $0.25. Revenue was $9.38 billion, versus consensus estimates of $9.11 billion. Comps rose 2.2 percent, versus estimates calling for a drop of 2 percent.

Mobileye (NYSE: MBLY) 6% HIGHER; reported Q3 EPS of $0.04, in-line with the analyst estimate of $0.04. Revenue for the quarter came in at $34.7 million versus the consensus estimate of $30.3 million.

Walker & Dunlop, Inc. (NYSE: WD) 5.2% LOWER; announced today the commencement of an underwritten offering of 2,000,000 shares of its common stock, par value $0.01 per share, held by funds managed by affiliates of Fortress Investment Group LLC (NYSE: FIG). The Company will not receive any proceeds from this offering.

Semtech (NASDAQ: SMTC) 4.9% LOWER; reported Q3 EPS of $0.46, $0.01 better than the analyst estimate of $0.45. Revenue for the quarter came in at $148.9 million versus the consensus estimate of $146.9 million. Semtech sees Q4 2014 EPS of $0.32-$0.34, versus the consensus of $0.41. Semtech sees Q4 2014 revenue of $125-132 million, versus the consensus of $140.0 million.

Novavax (NASDAQ: NVAX) 4.6% HIGHER; announced that the U.S. Food and Drug Administration (FDA) has granted Fast Track Designation to Novavax’ RSV F-Protein nanoparticle vaccine candidate (RSV F vaccine) for protection of infants via maternal immunization.

salesforce.com (NYSE: CRM) 4.2% LOWER; reported Q3 EPS of $0.14, $0.01 better than the analyst estimate of $0.13. Revenue for the quarter came in at $1.38 billion versus the consensus estimate of $1.37 billion. salesforce.com sees FY2015 revenue of $5.365-5.37 billion, versus the consensus of $5.37 billion. The company also initiates FY16 revenue of approximately $6.45-$6.50 billion, versus the consensus of $6.66 billion.

Cloud Peak Energy Inc. (NYSE: CLD) 4.1% HIGHER; announced that it has terminated the public offering of shares of its mandatory convertible preferred stock previously announced on November 18, 2014. The termination results from an assessment by CPE Inc. s management that current market conditions are not conducive for an offering on terms that would be in the best interests of CPE Inc. s stockholders. As a result of this termination, no shares will be sold pursuant to the offering.

Independence Realty Trust (NYSE: IRT) 3.4% LOWER; announced that it has commenced an underwritten public offering of 6,000,000 shares of common stock. The Company expects to grant the underwriter a 30-day option to purchase up to 900,000 additional shares of common stock.

Dollar Tree (NASDAQ: DLTR) 3.4% HIGHER; reported Q3 EPS of $0.69, $0.05 better than the analyst estimate of $0.64. Revenue for the quarter came in at $2.1 billion versus the consensus estimate of $2.06 billion. Consolidated same-store sales increased 5.9% compared to a 3.1% increase in the prior-year period.

Perrigo (NYSE: PRGO) 2.8% LOWER; announced that it is commencing a registered public offering of $900,000,000 of its ordinary shares, subject to market and other conditions.

JetBlue Airways (NASDAQ: JBLU) 2.3% HIGHER; Credit Suisse upgraded from Underperform to Neutral

Keurig Green Mountain (NASDAQ: GMCR) 1.6% LOWER; reported Q4 EPS of $0.90, $0.13 better than the analyst estimate of $0.77. Revenue for the quarter came in at $1.2 billion versus the consensus estimate of $1.16 billion.

Groupon, Inc. (NASDAQ: GRPN) 1.5% HIGHER; insider buying

Yahoo! (Nasdaq: YHOO) 1% HIGHER; the company and Mozilla Corporation announced a strategic five-year partnership that makes Yahoo the default search experience for Firefox in the United States on mobile and desktop. The agreement also provides a framework for exploring future product integrations and distribution opportunities to other markets

Overall, MBLY says it’s pleased with its strong Q3 results, driven by the ongoing demand for its complex technology. During the quarter, the company successfully won programs for its EyeQ System-on-Chip in several new models with new and existing OEM customers. The company believes it offers best-of-breed mono-camera technology, which bundles multiple applications into a single package. Looking ahead, Mobileye says it remains in a position to benefit from the ongoing move toward increased regulation of ADAS. As regulators and safety organizations continue to increase the types and functions of ADAS applications required to maintain high safety ratings, ADAS will become standard on more vehicle models and the market will continue to expand significantly. 

In sum, this was another good quarter for MBLY. The company made its IPO debut on August 1 (priced at $25). So this is its second quarter as a public company and both quarters were pretty similar in terms of performance relative to expectations. With that said, it’s not clear why the stock is down this morning. It could be that margins came in a bit lower relative to the year ago period. Also, the +70% YoY revenue growth was not as robust as the +90% achieved in Q2. Also, OEM revenue growth was good at +60% but it was not nearly as high as the +115% seen in Q2.

With that said, it’s not clear why the stock is down this morning. It could be that margins came in a bit lower relative to the year ago period. Also, the +70% YoY revenue growth was not as robust as the +90% achieved in Q2. Also, OEM revenue growth was good at +60% but it was not nearly as high as the +115% seen in Q2

U.S. RESEARCH ROUNDUP-Apple, Target, Yum Brands

10:22 AM ET, 11/20/2014 – Reuters

Nov 20 (Reuters) – Wall Street securities analysts revised their ratings and price targets

on several U.S.-listed companies, including Denbury Resources and International Paper

HIGHLIGHTS

• Apple : Piper Jaffray, Evercore ISI raise target price to $135
• Target : Susquehanna, Jefferies raise target price on the stock
• Denbury Resources : Barclays cuts to equal weight from overweight
• International Paper : Wells Fargo starts with market perform
• Yum Brands : Janney raises to buy from neutral

Following is a summary of research actions on U.S. companies reported by Reuters on Thursday.

Stock entries are in alphabetical order

• 3D Systems Corp : Jefferies cuts price target to $42; rating buy
• Actavis : RBC raises price target to $323 from $291; rating top pick
• Adept Technology : Canaccord Genuity starts with buy
• AeroVironment : Canaccord Genuity starts with hold
• Alexandria Real Estate : Baird cuts to neutral from outperform
• Allscripts Healthcare Solutions : RBC cuts to sector perform from outperform
• Allscripts Healthcare Solutions : RBC cuts price target to $13 from $17
• ANI Pharmaceuticals Inc : Roth Capital raises target price to $65; rating buy
• Apache Corp : Imperial Capital starts with outperform rating; price target $92
• Apple Inc : Evercore ISI raises target price to $135 from $125; rating buy
• Apple Inc : Piper Jaffray raises target price to $135 from $120; rating overweight
• Apple Inc : Morgan Stanley raises price target to $126
• Argo Group : KBW raises to outperform from market perform
• Argo Group : KBW raises target price to $64 from $60
• ASML Holding : JP Morgan raises target price to $116 from $103; rating overweight
• athenahealth Inc : RBC cuts to underperform from sector perform
• athenahealth Inc : RBC cuts price target to $80 from $115
• Bioscrip Inc : Barrington starts with outperform rating; target price $8
• Blackstone Group : Credit Suisse raises price target to $39 from $38; outperform
• Boston Properties : Baird cuts to neutral from outperform
• Capital One Financial : Bernstein raises target price to $102 from $92; outperform
• Cerner Corp : RBC raises target price to $75 from $66; rating outperform
• Chevron : HSBC cuts price target to $131 from $140; rating overweight
• Cliffs Natural Resources : Deutsche Bank cuts to hold from buy- Theflyonthewall.com
• Cognex : Canaccord Genuity starts with buy
• Computer Programs and Systems : RBC cuts to sector perform from outperform
• Computer Programs and Systems : RBC cuts price target to $61 from $75
• Constellium : SocGen cuts target price to $25 from $33; rating buy
• Constellium : Citigroup cuts to neutral from buy – Theflyonthewall.com
• Copa Holdings SA : Buckingham cuts target price to $147 from $165; buy rating
• Credit Acceptance : JMP Securities cuts to market underperform from market perform
• Cubist Pharmaceuticals :Credit Suisse cuts to neutral from outperform-Benzinga.com
• Deere : BMO cuts price target to $78 from $83; rating market perform
• Denbury Resources Inc : Barclays cuts to equal weight from overweight
• Denbury Resources Inc : Barclays cuts target price to $11 from $15
• Denny’s Corp : Stephens raises target price to $10 from $9; rating overweight
• Diamond Offshore : Cowen and Company cuts target to $34 from $38; market perform
• Diamond Offshore : Susquehanna cuts price target to $40 from $43; rating neutral
• Diamond Offshore : Iberia Capital cuts target price to $33 from $36; underperform
• Dollar Tree Inc : Deutsche Bank raises target price to $69 from $66; rating buy
• Dr Pepper Snapple Group : UBS raises price target to $71 from $69; rating neutral
• Dupont Fabros : Macquarie raises to outperform from neutral; target to $36 from $31
• Ecopetrol : Deutsche Bank starts with hold; price target $26
• E-House China Holdings : Brean Capital cuts target price to $16 from $20; rating buy
• E-House China Holdings : Oppenheimer cuts to perform rating – Streetinsider.com
• Electronic Arts : Cowen and Company raises price target to $48 from $44; outperform
• Equity Residential : Barclays raises target price to $75 from $71;rating overweight
• Faro Technologies : Canaccord Genuity starts with buy
• Fidelity & Guaranty : RBC raises price target to $26 from $24; rating outperform
• First Horizon National : Jefferies raises target price to $13 from $12; rating hold
• Franklin Street : Baird raises to outperform rating
• FTI Consulting : Avondale adds to Avondale Partners conviction buy list
• Galena Biopharma Inc : MLV & Co raises target price to $5 from $3; rating buy
• GoPro Inc : JP Morgan raises target price to $70 from $66; rating neutral
• Habit Restaurants Inc : Wedbush starts with outperform; price target $24
• Home Depot Inc : Wedbush raises target price to $105 from $90; rating neutral
• International Paper : Wells Fargo starts with market perform
• iRobot : Canaccord Genuity starts with buy
• Isis Pharmaceuticals :Piper Jaffray raises target price to $62 from $53;overweight
• Jack in the Box : Buckingham raises price target to $76 from $64; rating neutral
• Jack in the Box : Jefferies raises target price to $80 from $71; rating buy
• Jack In The Box : Susquehanna raises price target to $70 from $69; rating neutral
• Jack In The Box : Wedbush raises target price to $91 from $88; rating outperform
• Jetblue Airways : Deutsche Bank raises target price to $17 from $13; rating buy
• JetBlue Airways :Credit Suisse ups to neutral from underperform-Theflyonthewall.com
• JetBlue Airways : Buckingham raises target price to $17 from $16; buy rating
• King Digital Entertainment : Deutsche Bank raises target to $16 from $13; hold
• Kuka : Canaccord Genuity starts with hold
• L Brands : Cowen raises price target to $83 from $74; rating outperform
• Lifeway Foods Inc : Imperial Capital raises price target to $17 from $16; in-line
• Ligand Pharmaceuticals : Cantor raises target price to $46 from $43; rating hold
• Lowe’s Companies : Jefferies raises target price to $61 from $58; rating hold
• Lowe’s Companies : Barclays raises target price to $60 from $49; equal weight
• Lowe’s Companies : Wedbush raises price target to $66 from $50; rating neutral
• Macerich Co : BMO cuts to market perform from outperform
• Macerich Co : BMO raises target price to $76 from $74
• Macerich Co : Deutsche Bank raises price target to $78 from $70; rating buy
• Macerich Co : MLV & Co raises target price to $80; rating buy
• Macerich Co : Jefferies raises price target to $80 from $67; rating hold
• Markwest Energy Partners : Global Hunter Securities cuts target to $79 from $80
• MeadWestvaco : Wells Fargo starts with market perform rating
• Medicines Co : Credit Suisse raises to outperform – Theflyonthewall.com
• Mercer International : RBC raises price target to $17 from $15; rating outperform
• Midcoast Energy Partners : Global Hunter Securities cuts target to $18 from $21
• Nielsen NV : Bernstein raises target price to $51 from $49; rating outperform
• Nord Anglia Education : Credit Suisse cuts target to $21 from $25; outperform
• Nord Anglia Education : BMO cuts target price to $21 from $24; rating outperform
• Ocwen Financial Corp : KBW cuts price target to $20 from $22; rating market perform
• Oplink Communications : B.Riley cuts to neutral from buy
• Oplink Communications : B.Riley cuts target price to $24.25 from $26.25
• PetSmart Inc : Jefferies raise target price to $78 from $70; rating hold
• PetSmart Inc : Barclays raises target price to $72 from $70; rating equal weight
• Pharmerica Corp : Barrington starts with an outperform rating; $30 target price
• Plains All American Pipeline : Global Hunter Securities cuts target to $60 from $64
• Primerica Inc : SunTrust raises price target to $62 from $50
• Primerica Inc : SunTrust raises to buy from neutral
• Primero Mining Corp : RBC cuts price target to $6 from $7; rating outperform
• Public Storage : Barclays raises target price to $216 from $212; rating overweight
• Quality Systems Inc : RBC cuts to sector perform from outperform
• Quality Systems Inc : RBC cuts price target to $15 from $18
• Rayonier Inc : D.A. Davidson raises to buy from neutral rating
• Regeneron Pharmaceuticals : Brean raises target price to $450 from $390;rating buy
• RGS Energy : Roth cuts price target to $0.80; rating neutral
• com : Canaccord Genuity raises target price to $70 from $65; rating buy
• com : Pivotal Research raises target price to $74 from $71; rating buy
• com : Wedbush cuts target price to $58 from $61; rating neutral
• Sapient Corp : Stifel cuts to hold from buy
• Semtech Corp : RBC cuts target price to $30 from $32; rating outperform
• Stage Stores : SunTrust Robinson raises target price to $22 from $20; rating buy
• Stage Stores : Buckingham raises target price to $18 from $16; neutral rating
• Staples Inc : JP Morgan raises target price to $13 from $11; rating neutral
• Staples Inc : Barclays raises target price to $13 from $10; rating equal weight
• Staples Inc : Jefferies raises target price to $12.75 from $12; rating hold
• Streamline Health : Cowen and Company raises to outperform from market perform
• Streamline Health : Cowen and Company raises target price to $6 from $5
• Synergy Pharmaceuticals : Cantor raises price target to $8.50 from $8; rating buy
• Synergy Pharmaceuticals : Aegis adjusts price target to $10 from $20; rating buy
• Targa Resources Partners : Global Hunter Securities raises to buy from accumulate
• Targa Resources Partners : Global Hunter Securities cuts target to $70 from $73
• Targa Resources Corp : Global Hunter Securities cuts target to $142 from $153
• Target Corp : Susquehanna raises target price to $64 from $60; rating neutral
• Target Corp : Jefferies raises target price to $65 from $59; rating hold
• Target Corp : Barclays raises target price to $75 from $70; rating overweight
• Target Corp : BMO raises target price to $75 from $69; rating outperform
• Tech Data Corp : Raymond James cuts price target to $67 from $72; outperform
• Teekay Corp : Global Hunter Securities cuts target price to $71 from $75; rating buy
• Teekay LNG Partners LP : Global Hunter Securities cuts target price to $45 from $47
• Teekay Offshore Partners : Global Hunter Securities cuts target to $30 from $36
• Textron Inc : Jefferies raises target price to $52 from $46; rating buy
• Truecar Inc : RBC raises to outperform from sector perform
• Truecar Inc : RBC raises target price to $23 from $18
• Viacom Inc : Bernstein raises target price to $72 from $71; rating underperform
• Vipshop Holdings : HSBC cuts to neutral from overweight
• Vipshop Holdings : HSBC cuts target price to $24 from $27.7
• Vipshop Holdings : Macquarie raises target price to $28 from $27; outperform
• Western Gas Equity Partners : Global Hunter Securities ups target to $74 from $71
• Williams-Sonoma : Barclays raises target price to $75 from $62; rating equal weight
• Williams-Sonoma : CRT Capital raises target price to $75 from $72; fair value
• Williams-Sonoma : Morgan Stanley raises price target to $80 from $74; equal weight
• Williams-Sonoma : RBC raises price target to $72 from $65; rating sector perform
• Williams-Sonoma : SunTrust Robinson raises target price to $85 from $83; rating buy
• Williams-Sonoma : BB&T Capital raises target price to $77 from $74; rating buy
• Williams-Sonoma : Janney raises fair value to $56 from $50; rating neutral
• Williams-Sonoma : RBC raises target price to $72 from $65; rating sector perform
• YPF : Deutsche Bank starts with buy; price target $40
• Yum Brands : Janney raises to buy from neutral
• Zoetis : William Blair cuts to market perform from outperfor

The brokerage rated another seven companies at hold, but was downbeat on three software giants — Microsoft (MSFT) , Symantec (SYMC) and Salesforce.com (CRM), which were all started at underperform.

Jefferies said it believes underlying issues at Microsoft are related to “challenging fundamentals.” It blamed “structural headwinds and declining customer relevance” for the poor rating of Symantec, and said high costs and slowing growth are worrisome at Salesforce.

Overall, the brokerage said 2014 was one of the “most promising environments for innovation” in years, saying new services and infrastructures like the cloud, big data, Internet of Things, as well as a growing need for cyber security, have created a “unique time for software.”

Its top picks tend to show a “compelling combination of growth and operational discipline,” as well as under-monetization relative to their potential, the brokerage said.

Large-cap software picks

Adobe Systems Inc. (ADBE) has a market cap of $35 billion. In September, the Photoshop maker forecast disappointing revenue for the December quarter after recording weaker sales in its cloud and digital media business. Its shares fell to a 5-month low of $62.19 on Oct. 15. Since then, they have rallied 13.2% to $70.44 at Thursday’s close.

VMware Inc. (VMW) has a market cap of $35.7 billion. Its shares are off 26% from their 2014 closing high of $111.80 reached on April 1. The company in October forecast revenue between $1.67 billion and $1.71 billion for the fourth quarter, bracketing the consensus view of $1.69 million.

Intuit Inc. (INTU) has a market cap of $25.9 billion. Shares of the maker of tax-preparation software are up 18.8% year-to-date. The company on Thursday posted much better-than-expected sales of $672 million, fueled by growth in QuickBooks subscribers. It is now expecting fiscal 2015 revenue of between $780 million and $800 million, in line with the FactSet consensus of $789 million.

CA Inc. (CA) has a market cap of $13.4 billion. Its shares fell 25% this year before bottoming out at $25.74 on Oct. 15. Since then, they have rallied 17%, closing at $30.10 on Thursday. During its second quarter, CA reported softer revenues but still managed to improve net income by 7% to $256 million. The revenue decline was mostly due to a slowdown in subscriptions, but the company continues to place bets on the fast-growing enterprise cloud market.

Check Point Software Technologies (CHKP) has a market cap of $15.5 billion. Its shares as of Thursday’s close are up 17.8% year-to-date. In October, the company raised full-year estimates after topping profit expectations for the third quarter.

Splunk Inc. (SPLK) has a market cap of $7.8 billion. Its shares fell 32% from a late February high of $95.50 to Thursday’s close of $64.94. However, they are trading up 7% to $69.42 in recent high-volume trade, after the company forecast stronger-than-expected revenue for the current quarter and raised its full-year earnings outlook.

Benefitfocus Inc. (BNFT) has a market cap of $583 million. The company posted a 30% year-over-year improvement in revenue last quarter to $34.2 million. However it more than doubled its non-GAAP loss to $15.7 million from $6 million in the year-earlier period. The enterprise cloud company’s shares fell 70% from a 52-week high of $76 on Jan. 16 to a close of $22.82 on Thursday.

Paycom Software Inc. (PAYC) has a market value of $1.3 billion. The company, which went public in April, has seen its stock more than double from August lows. They closed at $26.10 on Thursday.

Jefferies also has buy ratings on Qlik Technologies Inc. (QLIK) , RingCentral Inc. (RNG) , SolarWinds Inc. (SWI) C Technologies (SSNC) and Varonis Systems Inc. (VRNS) .

Goldman Sachs reiterated a Conviction Buy rating on Kinder Morgan (NYSE: KMI) with a price target of $50. Yesterday it announced shareholders of Kinder Morgan (NYSE: KMI), Kinder Morgan Energy Partners, L.P. (NYSE: KMP), Kinder Morgan Management (NYSE: KMR) and El Paso Pipeline Partners, L.P. (NYSE: EPB) approved all proposals related to previously announced mergers. Analyst Theodore Durbin warned of volatility due to potential index rebalancing.

“KMI closed down 2.5% on 11/20 vs. SPX/AMZ +0.2%/+0.9%. Given the large amount of shares that will convert and potential index rebalancing implications, we expect increased near-term volatility in KMI. However, we remain positive on KMI fundamentals, and even after solid performance since the August restructuring announcement, still see it as the best value stock among large-cap C-corps,” said Durbin.

“We believe KMI offers a unique combination of offense, with strong 16%/10% dividend growth in 2015E/2016E, and defense via a diversified, largely fee-based cash flow stream. We particularly like its positioning in growing demand for natural gas infrastructure. With its new structure, we believe Kinder will benefit from a lower cost of capital which will allow it to bid more aggressively for organic projects as well as acquisitions. We expect backlog growth above and beyond the $18bn of announced projects, with updates potentially as early as its 4Q earnings call in mid-January and its late January analyst day, which can serve as a positive catalyst for shares,” he added.