MORNING COFFEE

Warren Buffett Releases Shareholder Letter. Warren Buffets’s Berkshire Hathaway's (BRK.A/BRK.B) Q4 earnings rose 43% to $4.38B, and its large matrix of businesses showed increasing improvement.  Growth in the company’s book value, the measure Warren Buffett has used to compare his company's performance against the market, increased 13% for the year, less than the S&P 500's 15.1% return in 2010. Warren Buffett also commented on the company's Burlington Northern acquisition, saying it has gone "even better than I expected," the company has replenished the $22 billion in cash used for the acquisition. In his annual letter to shareholders, Buffett mentioned that he is actively looking for other “major” acquisitions saying "our elephant gun has been reloaded, and my trigger finger is itchy."

Earning Reports

Kenneth Cole (KCP): Reported EPS of -$0.13 per shares, missing estimates by -$0.44.

Almost Family (AFAM): Reported EPS of $0.79 beating estimates by +0.01.

·         Futures at 7:00: Dow +0.1%. S&P 0.0%. Nasdaq +0.1%. Crude -0.05% to $97.83. Gold +0.1% to $1410.80.

·         Europe: London -0.3%. Paris +0.2%. Frankfurt +0.4%.

·         Asia: Japan +0.9% to 10624. Hong Kong +1.4% to 23338. China +0.9% to 2905. India +0.7% to 17823.

MORNING COFFEE

Mr. Can You Spare Some Change. Problems continue at the two largest mortgage companies, even after sucking up billions in government aid to keep them afloat.  Fannie Mae (FNMA) and Freddie Mac (FMCC) both once again posted quarterly losses.  Fannie Mae Reported a Q4 loss of $2.1 billion and a full-year loss of $21.7 billion. Freddie Mac reported a Q4 loss of $1.7 billion and a full-year loss of $19.8 billion.  In addition to the losses Fannie Mae asked for an additional $2.6 billion in federal aid and Freddie Mac asked for another $500 million in federal aid.  Together Fannie and Freddie are expected to cost taxpayers as much as $259 billion.

Upgrades

Fifth Third (FITB): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $14.00 to $17.00.

Downgrades

Cinemark (CNK): Wedbush lowered their rating from Outperform to Neutral and placed a target price of $20.00 on the company.

Coverage Reiterated/Price Target Changed

Chipotle Mexican Grill (CMG): Argus reiterated their Buy rating on the company and raised their target price from $270.00 to $300.00.

Salesforce.com (CRM): Stifel Nicolaus reiterated their Buy rating on the company and raised their target price from $160.00 to $170.00.

Applied Materials (AMAT): Stifel Nicolaus reiterated their Buy rating and raised their target price from $160.00 to $170.00.

Potash (POT): RBC Capital Markets reiterated their Outperform rating on the company and raised their target price from $204.00 to $222.00.

Transocean (RIG): FBR Capital reiterated their Outperform rating on the company and raised their target price from $96.00 to $103.00.

Earning Reports

Applied Materials (AMAT): Reported FQ1 EPS of $0.36 beating estimates by +$0.03 on revenue of $2.7 billion, beating estimates by +$0.08 billion.

Autodesk (ADSK): Reported Q4 EPS of $0.35 beating estimates by +$0.01 on revenue of $528 million, beating estimates by +$13.2 million.

Deckers Outdoor (DECK): Reported Q4 EPS of $2.27 beating estimates by +$0.28 on revenue of $430.1 million, beating estimates by +$36.6 million.

Gap (GPS): Reported Q4 EPS of $0.60 beating estimates by +$0.03 on revenue of $4.36 billion, beating estimates by +$0.1 billion.

Salesforce.com (CRM): Reported Q4 EPS of $0.31 beating estimates by +$0.05 on revenue of $456 million, in-line with estimates.

·         Futures at 7:00: Dow +0.55%. S&P +0.6%. Nasdaq +0.7%. Crude +0.6% to $97.87. Gold -0.9% to $1403.20.

·         Europe: London +0.3%. Paris +1.4%. Frankfurt +0.5%.

·         Asia: Japan +0.7% to 10527. Hong Kong +1.8% to 23012. China 0.0%. India +0.4% to 17701.

MORNING COFFEE

Oil Continues Its Climb. Oil futures are up another +3% this morning, passing the $100 barrier and trading around $101 per barrel (7:00 ET).  Yesterday Oil hit a high of $103.41 before falling back. The IEA, which is meeting today and tomorrow, said it will be discussing the “oil-market situation” and the impact of continued unrest in Libya.

White House Pushes For Mortgage Relief. Reports say that the White House is pushing banks to spend billions of dollars reducing mortgage principals on underwater mortgages as a settlement for the breakdown in mortgage servicing. In addition, some state attorneys general are looking to get banks to pay more than $20 billion in civil fines or fund a similar amount in loan modifications for troubled borrowers. Reports say the settlement would cover 14 servicers, including Bank of America (BAC), JPMorgan (JPM) and Wells Fargo (WFC).

Upgrades

Biogen Idec (BIIB): RBC Capital Markets raised their rating from Sector Perform to Outperform and raised their target price from $60.00 to $70.00.

Flextronics (FLEX): Collins Stewart raised their rating from Hold to Buy and raised their target price from $8.00 to $11.00.

Downgrades

Celgene (CELG): RBC Capital Markets lowered their rating from Outperform to Sector Perform and lowered their target price from $68.00 to $55.00.

Coverage Initiated

Sprint Nextel (S): Kaufman Bros initiated coverage with a Buy rating and target price of $6.25.

Coverage Reiterated/Price Target Change

Herbalife (HLF): Wedbush reiterated their Outperform rating and raised their target price from $72.00 to $87.00.

Priceline.com (PCLN): RBC Capital Markets reiterated their Outperform rating and raised their target price from $450.00 to $565.00.

Priceline.com (PCLN): The Benchmark Company reiterated their Buy rating and raised their target price from $504.00 to $570.00.

Earning Reports

DISH Network (DISH): Reported Q4 EPS of $0.56 beating estimates by +$0.02 on revenue of $3.2 billion, in-line with estimates.

Ensco International (ESV): Reported Q4 EPS of $0.9 beating estimates by +$0.02 on revenue of $408 million, beating estimates by +$8 million.

Foster Wheeler (FWLT): Reported Q4 EPS of $0.31 missing estimates by -$0.15 on revenue of $1.21 billon, beating estimates by +$0.2 billion.

 

General Motors (GM): Reported EPS of $0.31 missing estimates by -$0.15.

Sears (SHLD): Reported Q4 EPS of $3.67 beating estimates by +$0.10 on revenue of $13.1 billion, beating estimates by +$0.2 billion.

Target (TGT): Reported EPS of 1.38 missing estimates by -0.02.

Transocean (RIG): Reported Q4 EPS of $0.83 missing estimates by -$0.06 on revenue of $2.16 billion, missing estimates by -$0.14 billion.

·         Futures at 7:00: Dow -0.45%. S&P -0.6%. Nasdaq -0.6%. Crude +3% to $101.03. Gold +0.2% to $1417.10.

·         Europe: London -0.3%. Paris -0.4%. Frankfurt -1.0%.

·         Asia: Japan -1.2% to 10453. Hong Kong -1.3% to 22601. China +0.6% to 2879. India -3.0% to 17632.

MORNING COFFEE

Libya in Crisis. Military analysts say that Libyan leader Muammar Gaddafi’s regime will fall in a matter of days.  The crisis has caused Libya to close all their ports and foreign oil companies have suspended their operations.  Additionally, Eni S.p.A. (E) closed an important pipeline that brings natural gas from Libya to Italy.  The protest in Libya may have left over 1000 demonstrators killed by government forces.  The growing unrest in the entire Mideast sent markets lower worldwide and oil higher. Crude futures were up nearly 9% yesterday to $93.57.

Upgrades

Honeywell (HON): Argus raised their rating from Hold to Buy.

L-3 Comms (LLL): Argus raised their rating from Sell to Hold.

Coverage Reiterated/Price Target Changed

Medtronic (MDT): RBC Capital Markets reiterated their Sector Perform rating and raised their target price from $37.00 to $39.00.

Deckers Outdoor (DECK): RBC Capital Markets reiterated their Outperform rating and raised their target price from $60.00 to $102.00.

Earning Reports

DIRECTV (DTV): Reported EPS of $0.74 beating estimates by +$0.11.

Hewlett-Packard (HPQ): Reported FQ1 EPS of $1.36 beating estimates by +$0.07 on revenue of $32.3 billion, missing estimates by -$0.65 billion.

Lowe's (LOW): Reported Q4 EPS of $0.21 beating estimates by +$0.03 on revenue of $10.4 billion, in-line with estimates.

SkyWest (SKYW): Reported EPS of $0.67 beating estimates by +$0.34.

TJX (TJX): Reported EPS of $1.05 beating estimates by +$0.03.

Toll Brothers (TOL): Reported FQ1 EPS of $0.02 beating estimates by +$0.09 on revenue of $334 million, beating estimates by +$17 million.

·         Futures at 7:00: Dow +0.4%. S&P +0.4%. Nasdaq +0.5%. Gold +0.1% to $1401.90.

·         Europe: London -0.5%. Paris +0.2%. Frankfurt -0.3%.

·         Asia: Japan -0.8% to 10579.1. Hong Kong -0.4% to 22907. China +0.3% to 2863. India -0.6% to 18178.

MORNING COFFEE

Oil Rises and Stocks Tumble over Libya. Concerns over Libya's violent crackdown on protestors sent world markets lower and oil prices higher.  Benchmark crude for March delivery was up $7.88 a barrel, or 9.1 percent, to $94.08 as traders became concerned over how the crisis will end and what the impact on the North African country's oil production will be.

Upgrades

Time Warner (TWX): The Benchmark Company raised their rating from Hold to Buy and raised their target price from $39.00 to $44.00.

Coverage Reiterated/Price Target Changed

Oceaneering Intl (OII): RBC Capital Markets reiterated their Outperform rating and raised their target price from $85.00 to $89.00.

DIRECTV (DTV): Kaufman Bros reiterated their Buy rating and raised their target price from $49.00 to $54.00.

Oracle (ORCL): FBR Capital reiterated their Outperform rating and raised their target price from $36.00 to $38.00.

Earning Reports

Cracker Barrel (CBRL): Reported FQ2 EPS of $1.20 missing estimates by -$0.01 on revenue of $640.3 million.

Hormel Foods (HRL): Reported Q1 EPS of $0.55 beating estimates by +$0.12.

Medtronic (MDT): Reported EPS of $0.86 beating estimates by +$0.02.

Wal-Mart (WMT): Reported EPS of $1.34 beating estimates by +$0.03.

·         Futures at 8:36am: S&P 500 -1.18%.  NASDAQ -1.48%.  Dow -0.53%.  Gold +14.8 to $1403.40. Oil +6.78 to $92.98

·         Europe: London -0.53%. Paris -1.02%. Frankfurt +0.10%.

·         Asia: Japan -1.78%. Hong Kong -2.11%. China -2.62%.  India -0.77%.

MORNING COFFEE

Mideast Riots Spread.  Calls for government reforms that began in Tunisia and spread to Egypt are now spreading across the entire Middle East.  Violent riots have erupted in Iran, Bahrain, Iraq, Libya, Jordan and Yemen.  Additionally, demonstrations are continuing in Egypt led by the Muslim Brotherhood, more than $1 million people were at the demonstration that called for the release of all political prisoners.  Events could escalate today as people gather for Friday prayers.  The spread of violence has many predicting a huge spike in oil prices and a flock to the safety of gold and US treasuries.

China Acts To Halt Inflation.  China announced that it was raising its reserve requirements by 0.5% to 19.5%, this was the second hike this year. Last week China raised its key interest rate by 0.25%.  Government officials are trying to get a handle on rising inflation in the country.

Upgrades

Brocade (BRCD): Wunderlich raised their rating from Hold to Buy and raised their target price from $6.00 to $8.00.

Zimmer Holdings (ZMH): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $66.00 to $71.00.

Downgrades

ValueClick (VCLK): The Benchmark Company lowered their rating from Buy to Hold and placed a target price of $18.00 on the company.

Coverage Initiated

Laboratory Corp (LH): Collins Stewart initiated coverage with a Buy rating and target price of $103.00.

Coverage Reiterated/Price Target Changed

Lowe's (LOW): Oppenheimer reiterated their Outperform rating and raised their target price from $28.00 to $34.00.

Home Depot (HD): Oppenheimer reiterated their Outperform rating and raised their target price from $37.00 to $45.00.

       

Intuit (INTU): Oppenheimer reiterated their Outperform rating and raised their target price from $52.00 to $58.00.

Intuit (INTU): ISI Group reiterated their Hold rating and raised their target price from $50.00 to $53.00.

Earning Reports

Calpine (CPN): Reported Q4 EPS of -$0.38 missing estimates by -$0.28 on revenue of $1.47 billion, beating estimates by +$0.13 billion.

Aruba Networks (ARUN): Reported FQ2 EPS of $0.14 beating estimates by +$0.01 on revenue of $93.9 million, beating estimates by +$6 million.

Brocade Communications Systems (BRCD): Reported FQ1 EPS of $0.12 beating estimates by +$0.02 on revenue of $546 million, beating estimates by +$3 million.

Clearwire (CLWR): Reported Q4 EPS of -$0.53 beating estimates by +$0.01 on revenue of $181 million, missing estimates by -$12 million.

Intuit (INTU): Reported FQ2 EPS of $0.32 beating estimates by +$0.02 on revenue of $878 million, missing estimates by -$6 million.

Nordstrom (JWN): Reported Q4 EPS of $1.04 beating estimates by +$0.04 on revenue of $2.8 billion, in-line with estimates.

·         Futures at 7:00: Dow 0.0%. S&P -0.1%. Nasdaq -0.1%. Crude -0.2% to $86.17. Gold +0.1% to $1386.60.

·         Europe: London -0.6%. Paris -0.1%. Frankfurt -0.1%.

·         n Asia, Japan +0.1% to 10842.8. Hong Kong +1.3% to 23595. China -0.9% to 2900. India -1.6% to 18212.

MORNING COFFEE

Sanofi Reaches Deal With Genzyme. After months of negotiations, Sanofi-Aventis (SNY) and Genzyme (GENZ) reached a deal to purchase the company.  The French drugmaker will pay $74 pershare in cash for Genzyme.  Sanofi also agreed on a contingent value right which states that Genzyme shareholders will receive as much as an additional $14 per share.  The amount depends on the performance of Genzyme’s experimental multiple-sclerosis drug Lemtrada and production levels of two of the company’s other products. Premarket: SNY +1.4%, GENZ +0.9%.

Upgrades

Valero Energy (VLO): RBC Capital Markets raised their rating from Sector Perform to Top Pick and raised their target price from $26.00 to $35.00.

Canadian National Rail (CNI): RBC Capital Markets raised their rating from Sector Perform to Outperform and placed a target price of $77.00 on the company.

Sprint Nextel (S): Argus raised their rating from Hold to Buy and placed a target price of $7.00 on the company.

Las Vegas Sands (LVS): KeyBanc Capital Markets raised their rating from Hold to Buy and placed a target price of $57.00 on the company.

Downgrades

Marriott (MAR): Hudson Securities lowered their rating from Buy to Hold.

Coverage Initiated

National Oilwell Varco (NOV): Morgan Keegan initiated coverage with an Outperform rating and target price of $95.00.

Halliburton (HAL): Morgan Keegan initiated coverage with an Outperform rating and target price of $65.00.

Coverage Reiterated/Price Target Changed

Hewlett-Packard (HPQ): Wedbush reiterated their Outperform rating and raised their target price from $50.00 to $55.00.

Dell (DELL): Stifel Nicolaus reiterated their Buy rating and raised their target price from $16.00 to $18.00.

Clorox (CLX): RBC Capital Markets reiterated their Outperform rating and raised their target price from $69.00 to $73.00.

Family Dollar (FDO): RBC Capital Markets reiterated their Outperform rating and raised their target price from $49.00 to $60.00.

Family Dollar (FDO): Wedbush reiterated their Neutral rating and raised their target price from $44.00 to $54.00.

Earning Reports

Allscripts-Misys Healthcare Solutions (MDRX): Reported Q4 EPS of $0.20 beating estimates by +$0.02 on revenue of $337 million, in-line with estimates.

Analog Devices (ADI): Reported FQ1 EPS of $0.70 beating estimates by +$0.05 on revenue of $729 million, in-line with estimates.

Dell (DELL): Reported Q4 EPS of $0.53 beating estimates by +$0.16 on revenue of $15.7 billion, in-line with estimates.

ValueClick (VCLK): Reported Q4 EPS of $0.31 beating estimates by +$0.08 on revenue of $129 million, beating estimates by +$5 million.

Devon Energy (DVN): Reported Q4 EPS of $1.57 beating estimates by +$0.16 on revenue of $2.14 billion, missing estimates by -$0.2 billion.

Talisman Energy (TLM): Reported Q4 EPS of $0.08 missing estimates by -$0.07 on revenue of $1.87 billion, beating estimates by +$0.16 billion.

·         Futures at 7:00: Dow +0.3%. S&P +0.4%. Nasdaq +0.25%. Crude +0.3% to $84.60. Gold -0.1% to $1373.

·         Europe: London +0.4%. Paris +0.8%. Frankfurt +0.1%.

·         Asia: Japan +0.6% to 10808. Hong Kong +1.1% to 23157. China +0.9% to 2924. India +0.15%  to 18301.