Market Maker Picks – direction in the market as the large institutions announce their positions, give recommendations and their insight to stocks.

AEGIS:

• YRCW – announced that it has launched an amendment to its MaTerm Loan Credit Agreement, and provided preliminary revenue and EBITDA figures for full year 2016. While this is not yet a ‘done deal’, it is the beginning of a process which should remove much of the concern by investors about a potential covenant violation in 2017/2018

BANK AMERICA:

• VOD downgraded to neutral – Unrelenting headwinds accelerate the need for change. VOD has suffered multiple headwinds in the past 6m that are unlikely to abate in the near-term

BERNSTEIN:

• VALE upgraded MP to OP – What we find now in Vale is a very different beast altogether to the beaten up, capex heavy and debt-laden proposition we once did. Indeed, we believe that we have reached an inflection point for the company; cash generation and rapid de-gearing is the agenda henceforth

BMO CAPITAL:

• Paper & Packaging: PKG and IP upgraded MP to outperform and boosting price targets for IP, PKG and KS and updating earnings estimates – Box demand remains healthy in January. December’s operating rate was a robust 97%, inventories are lean and input costs are trending higher. Monday’s unexpected outage at IP’s 500K/ton mill in Pensacola will increase supply uncertainty in a tightening market. We expect producers to announce a $50/ton spring containerboard price hike over the next 3-4 weeks
• CNI – We have made no changes to our forward assumptions. Against an improving demand backdrop, best-in-class marketing and operating model, CN Rail should continue to deliver strong risk-adjusted returns
• COF – Following COF’s 4Q16 beat, we raise our forward EPS estimates (by less than 1%) from higher expected NII, and we raise our target price to $103. COF shares offer upside potential to both valuation (COF is a regional bank valued as if it were still a specialty mono-line credit card lender) and forward earnings (from policy changes proposed by the Trump administration); we continue to prefer COF over all the other specialty finance stocks that we cover.

BREAN:

• MIME init buy and $27 tgt

BTIG:

• ISRG – believe ISRG has the experts to pull this transformation off, we like the plan, and expect significant success and improved patient outcomes in many areas over the next 3-10 years, but feel the increased near term spend will keep shares range bound over the next 12 months
• PRGO – lowered our CY17 EPS revenue and EPS forecasts (now $5.55B and $6.93 – from $5.63B and $7.56) to reflect sustained competitive pressure with the Co.’s generic Rx segment

CANTOR:

• GOOGL – maintain an Overweight rating on GOOGL as we head into 4Q16 earnings on Thursday, January 26th. We expect results in line with Street estimates, with a bias to the upside even as the company lapses tough Y/Y comps. We believe results will show solid growth in both top and bottom lines
• EGLT – We applaud EGLT for having three approved products in their portfolio, including one with proprietary technology. But abuse-deterrent formulations (ADFs) have historically had slow launches, with small sales forces struggling for share. Our initial thesis was predicated on a strong AD label to differentiate in the market. Given the ARYMO label and current market dynamics, we are recalibrating our launch numbers and expectations around pipeline assets; cut tgt to $15

CHARDAN:

• AST – Reiterate Our BUY Rating and 12 Month Price Target of $5.50: We believe that Asterias has the potential to become a significant competitor in the emerging fields of cell therapy and regenerative medicine. Over the next year, we believe that clinical trial updates from its three cell therapy initiatives could serve as positive catalysts for the stock

CITIGROUP:

• PSXP upgraded neutral to buy
• OKE downgraded to neutral from buy
• CONE downgraded neutral to sell
• AA upgraded to buy from neutral
• JCOM downgraded buy to neutral
• QCOM added to catalyst watch list and removed INTC

CLSA:

• COH downgraded to OP from buy

DAVIDSON:

• ANET init buy and $118 tgt – With ANET’s decision to bring manufacturing into the US, we believe the company has mitigated its legal exposure, and continues on a path to sustained growth. That path could even include some short-cuts if a number of pending rulings over the next seven months go in the company’s favor

DEUTSCHE BANK:

• AA upgraded to hold from sell on commodity momentum – commodity prices are proving to be a boon with the Alumina segment more-than-doubling EBITDA margins QoQ to ~$48/ton.
• AIG – We continue to believe the operational goals at AIG are difficult to achieve, but acknowledge a significant buyback plan offers support for the stock at this valuation. Maintain Hold
• GLW – is our Top Large Cap Idea on 2 multi-year growth drivers that are yet to be fully baked into consensus: 1) The Optical Super Cycle – driven by strength in Fiber to the Home and Cloud Optical; 2) Auto Glass. We highlight setup for continued moderate Displays pricing in FY17, plus a solid capital return story. Raising PT: $28 to $30

FBR CAPITAL:

• VZ downgraded OP to MP citing weak Q4 results

GOLDMAN SACHS:

• HCP upgraded neutral to buy within the context of our Neutral net lease coverage view, and raise our 12-month target price to $35 from $29
• AMZN – reiterate our Buy (CL) on AMZN as incremental investment in fulfillment and AWS capacity should drive potential revenue growth acceleration and lower 3rd-party fulfillment expenses in 4Q and beyond

GUGGENHEIM:

• GOGO init buy and $14 tgt
• ENT init buy and $12 tgt

JEFFERIES:

• CTL upgraded underperform to hold

JP MORGAN:

• AKS downgraded OW to neutral – should see more cost headwinds in 2017 due to LIFO charges and outage expenses, even though it had significant success in lowering costs; still positive on steels
• Airlines: JBLU upgraded to OW from neutral and downgraded LUV to neutral from OW – understand certain investors’ aversion to international risk and a preference for significant domestic bias. But just as all domestic airlines are not created equal, neither are they equally valued. JetBlue is cheapest. Granted, we can identify flaws and inferiorities, but none that warrant a five-turn P/E discount to LUV and SAVE, in our view

KEEFE BRUYETTE:

• BPOP downgraded OP to MP

KEYBANC:

• POST – reiterate our Overweight rating on POST with our analysis suggesting the downside case on MFI (Michael Foods) is diminishing with egg market fundamentals inflecting
• HCA – reiterate our Overweight rating on HCA as we are encouraged with HCA’s stable operating results (as evidenced by recent pre-announcement) and as the Affordable Care Act repeal and replace process continues to point toward a soft landing
• Utilities – Ahead of C4Q earnings season for our Utilities coverage, we highlight DTE (Overweight, $101PT) & POR (Sector Weight) as names that could be potential downside surprises vs. current expectations. We do not see any upside surprises this quarter, which we attribute to the fact that temperatures were still generally below normal, which we believe capped potential upside. Additionally, we highlight MDU (Overweight, $31PT) and VVC (Overweight, $62PT) as names to focus on around guidance.

LONGBOW:

• PII – reiterating our UP rating on PII shares after the completion of our 4Q dealer survey revealed weak ORV sales trends and continued ORV share losses despite PII being the most promotionally aggressive ORV manufacturer over the past 3 months. We believe PII will miss their implied 4Q ORV sales guidance of up low single digits, which will lead to below-consensus earnings in 4Q16
• HZO – believe management raising guidance for FY17 echoes the strength we have seen in the industry through our dealer checks. We come away from this earnings call feeling very confident on HZO’s FY17 earnings potential and reiterate our BUY rating on the shares

MACQUARIE:

• FITB downgraded OP to neutral citing relative share outperformance over the past year

MKM PARTNERS:

• ILG – Westin Nanea receives certificate of occupancy; provides more clarity around 4Q earnings. ILG announced the company received the necessary permits for the first two buildings of the Nanea project in late 2016. This is a positive announcement for ILG as there was some uncertainty around the timing to receive the certificate of completion
• TRV – lowering our 2017 estimate to $9.85 from $10.00 and introducing our 2018 estimate of $10.85. We are maintaining our Neutral rating for the shares with a fair value estimate of $115
• DHI – raising our fair value estimate on DHI to $33 from $32, as we have slightly raised our EPS estimates. However, we remain Neutral on DHI. We see 1Q17 as a very encouraging start to the year but would like to see some evidence that the momentum has continued into the spring selling season before potentially becoming more constructive on the shares

MIZUHO:

• CVLT – think risk-reward remains attractive at current levels and we continue to see upside to n-t estimates on better uptake of cloud solutions and ongoing execution initiatives. Maintaining Buy rating and $62 PT
• CA – remain on the sidelines on n-t growth headwinds, slower profitability gains on integration costs and limited valuation upside. Maintain Neutral rating and $34 PT
• QCOM – We take a look at the impact on QCOM if Apple walks away, and we believe the pullback factors in much of the impact. Nonetheless, we continue to see the NXPI deal still on track. While we have not heard back from QCOM, we wanted to give our take on the litigation

MORGAN STANLEY:

• CRI – initiate at OW with a $103 PT –saying Carter’s dominates US baby apparel. Multiple growth levers now include a partnership with Amazon, and our work confirms that margins can expand. We see 22% upside to our PT and 58% in our bull case
• GM tgt raised to $42 – we make GM our top pick in US autos as we update our model following management’s 2017 guidance targeting $6 to $6.50 of EPS. We raise our 2017 est. to $6.32 from $6.09 on Brazil and a lower share count
• BABA – Raise PT to US$140 from US$130 as we lift F17-F19e EPS 7-11% to reflect stronger core commerce growth on top of the sustained growth in cloud and other new initiatives
• STX – Raise PT to $40 from $37 – Emerging strength in high capacity consumer HDDs and continued cost savings drive our estimates and PT higher
• TXN – Raise PT to $74 from $68 – TI reported a solid quarter, above consensus estimates but basically in line with our preview and expectations. Newly released annual market exposures shows acceleration in autos which grew >20% last year

NOMURA:

• MPEL upgraded reduce to neutral

PACIFIC CREST:

• CTSH – expect Cognizant to provide clarity on its capital allocation (buybacks and/or dividends) and margin leverage in addition to FY2017 guidance in its early February earnings report. We believe the stock will react positively as investors have been looking for Cognizant to manage its overall financials (beyond just revenue growth). At 15.3x CY17E EPS estimates, we are buyers

PIPER JAFFRAY:

• Oil drillers – RIG and NE both upgraded to neutral from underweight – significant multiple expansion that is evident in the offshore driller stocks has prompted us to examine alternative valuation theories, with specific focus on earnings power estimates associated with a mid-cycle recovery scenario that isn’t yet tangible within our 2017-’19 forecasting period

RAYMOND JAMES:

• VZ downgraded OP to MP
• SFNC downgraded to underperform

RBC CAPITAL:

• VZ – downgraded to sector perform – 4Q16 results were mixed, and the 2017 outlook reflects a challenging fundamental back group in light of continuing industry competition. We are trimming our estimates and price target and downgrading to Sector Perform
• USFD init OP and $32 tgt – think its EV/NTM EBITDA valuation discount to peers is unwarranted. USFD is also embarking on a productivity plan that will drive internal efficiency
• SYY init sector perform and $47 tgt – While we think the $500m three-year EBIT growth goal is achievable/raisable, we believe this is already factored into consensus numbers
• PFGC init sector perform and $24 tgt – PFGC’s beverage/snack business will offset some restaurant weakness, and the new Red Lobster win will drive additional growth. Lastly, given 1H results, we believe there is some risk to PFGC’s 2H17 EBITDA guidance
• VSAT init underperform and $42 tgt
• TXN – While we realize there will be some concerns around the sustainability of the current demand trends, we do think compares remain easy for H1:17 and TXN should benefit from personal electronics ramp in H2:17. Maintain OP and adjusting our price target to $84 (prior $80).

SUSQUEHANNA:

• RCL – Bullish commentary from management on the company’s booked position and long-term growth prospects, along with an acceleration in repurchases in 2017, and recent improvements in demand will drive shares higher. We are raising our 12-month price target from $95 to $99

STIFEL:

• STAY upgraded hold to buy

SUNTRUST:

• MBLY – recommends buying Mobileye’s stock at current levels, saying that the company’s U.S. after-market business appears to be gaining steam

TELSEY:

• AEO upgraded MP to OP – Based on what we see as a compelling valuation against an outlook for continued earnings growth
• KATE downgraded OP to MP – stock has jumped 32% over the past month following persistent press reports of a possible takeout. Strategic deals of this scope in the group have been few and far between lately, while financial deals have struggled to raise the necessary funding in the mall-based fashion group, in our view
• LULU – maintain OP – see the LULU set-up as an opportunity for 2017. Product margin expansion can continue through improved supply chain efficiencies, while expense investments should begin to leverage this year. Comp trends remain strong and are driven by full priced selling.
• COH – While the industry continues to absorb the pain of restructuring the wholesale channel, given COH’s relatively light exposure, we see the improving DTC business as more influential to the investment thesis going forward. We maintain our Outperform rating and $49 price target

UBS:

• CSX upgraded to buy as Analysis Points to Further Upside despite Recent Step Up; PT to $57. OR + Buyback frame points to potential EPS of ~$3.50 – $4.00/share CSX stock has performed strongly in 2017 rising 30% (vs the S&P 500 +2%) and yet when we run the numbers on EPS scenarios under potential leadership of Hunter Harrison we still arrive at further attractive upside

WEDBUSH:

• ISRG – We remain upbeat on the prospects of the robotic surgery market due to ISRG’s healthy procedure momentum, stable system shipments, and new product investments. In addition, ISRG announced an accelerated stock repurchase program of $2 billion
• SKX – making slight adjustments to our estimates and increasing our price target to $25 from $23 as we roll out our FY18 estimates. Near-term, we believe the 4Q, despite some ebb and flow late in the quarter, was generally solid vs. our initial expectations. As we look to FY17, our view remains unchanged.
• BABA – Maintain NEUTRAL rating and raising price target to $100 from $90 as we roll the multiple to FY18

WELLS FARGO:

• Machinery – says checks, sequential demand improvement which is positive but unclear how sustainable this improvement will be in short term, short term positive for CMI, CAT, and DE
• ATH – reit OP as potential upside in sales and EPS from Dept of Labor’s new proposal
• MJN – lowering 2017 EPS due to stronger FX and larger dairy cost, lowering value range, see headwinds as temporary and not structural, see 2017 as inflection for headwinds, would be buyers of any post EPS weakness
• WMT resumed MP and value $70-72
• Tobacco – Q4 preview, expect solid q4 margin expansion, MO remains our top pick, think downside risk without a PM merger is limited, still see a 70% probability on a PM/MO combo

WUNDERLICH:

• PII downgraded to hold – Given a potential earnings turnaround appears to remain several quarters away, we recommend investors wait on the sidelines, and are thus lowering our rating from Buy to Hold and our price target from $98 to $85
• CMCSA – remain upbeat on Buy-rated Comcast (CMCSA) and will reassess our $85 price target after the CC tomorrow morning. Beyond its favorable consumer and commercial product roadmap, the installation of Ajit Pai as FCC Chairman also dampens any regulatory cloud, especially for net neutrality issues