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Upgrades/Downgrades: MSFT, CCL, RFMD, Dry Bulk Shipping Friday, June 19, 2:37 PM ET
Goldman Sachs added Microsoft (NASDAQ:MSFT) to their Conviction Buy List this morning and upped their price target from $25 to $29. The firm expects new products and the eventual rebound in IT spending to drive revenue and boost earnings in 2010. Furthermore, Microsoft announced they are committed to gaining market share from Google in the internet search business. They plan on investing up to ten percent of operating income to improve the visibility of their search engine Bing.
Shares of Microsoft climbed this morning over three percent on the upgrade from Goldman.
Shares of cruise liner Carnival (NYSE:CCL) received a boost this morning when Wachovia upgraded the stock to Outperform. Management at Carnival announced that pricing has improved since March and Wachovia's independent surveys in May and June have confirmed this. Additionally, analysts at Wachovia feel that the valuation of the stock is favorable compared to peers. Shares of Carnival have fallen about three percent since mid-April while shares of Royal Caribbean (NYSE:RCL) have climbed over twenty four percent in the same period.
In afternoon trading, shares of Carnival were trading more than seven percent higher on very heavy volume.
UBS downgraded shares of RF Micro Devices (NASDAQ:RFMD) from Buy to Neutral on valuation concerns. While the firm sees long-term potential for the stock from the recovering economy and restructuring moves, they see "no near-term catalysts with the potential to meaningfully change fundamentals.
Despite the downgrade from UBS, shares were trading higher today by more than two percent.
And FBR Capital downgraded the entire dry bulk shipping sector to Underweight from Market Weight. Analysts at the firm see spot prices for Capesize vessels falling from the current rate of $90,000 per day to under $30,000 per day by the end of 2009. The firm believes that rates have climbed in recent months as the Chinese have grown their stockpiles of iron ore in attempts to gain leverage in negotiations with mining companies for lower prices in 2010. FBR does not see the dry bulk shipping sector improving until at least 2013.
On the sector downgrade, shares of Diana Shipping (NYSE:DSX) fell almost two percent while shares of Navios Maritime Holdings (NYSE:NM) fell a little more than one and a half percent.
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