MORNING COFFEE

Foreclosure Sales Continue to Climb. Home sales and prices are continuing to suffer.  Sales of foreclosed homes accounted for 28% of all home sales in Q1.  In some areas of the country it’s even worse.  In Nevada, foreclosures account for 53% of homes sold in the state.  In both California and Arizona foreclosures accounted for 45% of sales.  The three year inventory of foreclosed homes is also pressuring prices lower.  On average bank owned properties are selling for a 35% discount to comparable properties.  In New York the discount to REO was 53% and in Illinois, Ohio and Wisconsin the discount was nearly 50%.

Upgrades

Aeropostale (ARO): FBR Capital raised their rating from Underperform to Market Perform and placed a target price of $20.00 on the company. Pre-market: 18.58 +0.23 (1.25%)

American Eagle (AEO): FBR Capital raised their rating from Market Perform to Outperform and placed a target price of $17.00 on the company. Pre-market: 13.22 +0.20 (1.54%)

Comerica (CMA): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $43.00 on the company. Pre-market: 35.65 +0.49 (1.39%)

Oracle (ORCL): ThinkEquity raised their rating from Hold to Buy and raised their target price from $34.00 to $40.00. Pre-market: 33.20 +0.21 (0.64%)

Coverage Initiated

Medifast (MED): Janney Monntgomery Scott initiated coverage with a Buy rating.

Tupperware (TUP): Janney Monntgomery Scott initiated coverage with a Neutral rating and target price of $65.00 on the company.

Earning Reports

Big Lots (BIG): Reported FQ1 EPS of $0.70 beating estimates by +$0.01 on revenue of $1.2 billion, in-line. Pre-market: 30.80 -1.53 (-4.73%)

Guess? (GES): Reported Q1 EPS of $0.55 beating estimates by +$0.11 on revenue of $592 million, beating estimates by +$24 million. Pre-market: 45.14 +5.04 (12.57%)

Tiffany (TIF): Reported Q1 EPS of $0.67 beating estimates by +$0.10 on revenue of $761 million, beating estimates by +$57 million.  The company also raised their FY'12 EPS outlook to $3.45-3.55. Pre-market: 73.80 +3.76 (5.37%) 

Toronto Dominion Bank (TD): Reported FQ2 EPS of $1.59 missing estimates by -$0.01. Pre-market: 86.70 -0.08 (-0.09%)  

·         Futures at 9:00: Dow +0.15%. S&P +0.05%. Nasdaq -0.19%. Crude -0.2% to $101. Gold -0.27% to $1522.60.

·         Europe: London +0.43%. Paris -0.04%. Frankfurt -0.54%.

·         Asia: Japan +1.5% to 9562. Hong Kong +0.7% to 22901. China -0.2% to 2735. India +1.1% to 18045.