Analysts Upgrades and Downgrades: PSUN, CEDC, AXL, TSLA, THQI
Thursday, December 08, 2021 9:45 AM

As the U.S. market started Thursday’s trading on a negative note, several stocks were either upgraded or downgraded by analysts and rating agencies. Some notable stocks are discussed here.

Pacific Sunwear of California Inc. (Nasdaq: PSUN), which operates as a retailer rooted in the action sports, fashion, and music influences of the California lifestyle, is upgraded to Neutral from its previous rating of Underweight while reaffirming its price target of $2. In its fiscal 2011 third quarter, PSUN reported a wider loss, hurt by lower revenues and one-time charges. Nonetheless, loss per share for the quarter was lower than Wall Street estimates, and revenues also topped expectations. Shares of PSUN jumped 36.30 percent, or $0.49, to trade at $1.83.

Central European Distribution Corp. (Nasdaq: CEDC), which produces, imports, and distributes alcoholic beverages in Poland, Hungary, and the Russian Federation, is raised to Buy from Underperform by analysts at Jefferies, with a price target of $6.80, up from $1.60. CEDC announced that its Board of Directors has received a letter, dated December 6, 2011, from Russian Standard Corporation outlining a general proposal to acquire an additional approximately 19.9 percent of the Company's pre-dilution outstanding shares in exchange for assets of Roust Inc., a leading Russian importer of premium spirits, and to assist CEDC in restructuring its outstanding indebtedness. Shares of CEDC gained 11.15 percent, or $0.59, to trade at $5.66.

American Axle & Manufacturing Holdings Inc. (NYSE: AXL), which is engaged in the manufacture, engineering, design, and validation of driveline and drive-train systems, and related components and chassis modules for automotive industry, is upgraded to Buy from Hold by analysts at Deutsche Bank, with a price target of $16.50. They state that they have begun to see AXL’s focused exposure to North America as a positive in the current macro environment, and believe that investors could soon begin to look ahead to AXL’s strong backlog and potential positives from the early-2013. Shares of AXL added 3.34 percent, or $0.30, to trade at $9.28.

Tesla Motors, Inc. (Nasdaq: TSLA), which designs, develops, manufactures, and sells electric vehicles and advanced electric vehicle power-train components, is downgraded to Underweight from Overweight by analysts at Morgan Stanley. They state that Tesla shareholders are long a near-dated call option on Model S launch and a longer-dated call on mass EV adoption. The former has appreciated handsomely while the latter is declining, they add. Shares of TSAL were down 7.84 percent, or $2.68, to trade at $31.51.

THQ Inc. (Nasdaq: THQI), which develops, publishes, and distributes interactive entertainment software for various game systems, personal computers, wireless devices, and the Internet, is lowered to Hold from Buy by analysts at Brean Murray Carret & Co. They state that THQ’s announcement that fiscal Q3 FY2012 revenues could come in 25 percent below guidance of $510-$550 million due to weaker-than-expected uDraw sales is likely to result in a liquidity crunch, putting the THQ's viability into question. On the other, shares have already pulled back to the point where they are trading at an option value for the company actually not going out of business, they add. Shares of THQI slumped 19.68 percent, or $0.29, to trade at $1.17.