Apple Inc. (NASDAQ:AAPL): Jefferies cut its price target for Apple shares by $25 to $450 after lowering its 2014 fiscal year earnings estimate for the company to $37.95 from $38.78, well below the consensus estimate of $42.66. Jefferies says its channel checks indicate that second-half iPhone build plans are being cut due to “terrible” fingerprint sensor yields. The firm adds that the iPhone 5c is being priced like Apple’s previous-generation handsets rather than a new, lower level. Jefferies believes Apple is taking the “higher price/lower market share option” for both its new iPhones and reiterates a Hold rating on the stock.
Transocean Ltd. (NYSE:RIG): Bernstein downgraded Transocean to Market Perform from Outperform and lowered the Offshore Drillers sector to Neutral. The analyst believes supply growth is about to outpace demand growth, driving utilization rates lower. Additionally, Bernstein expects rates to be driven down by rig-on-rig competition for both legacy and new rigs, and the firm thinks the industry is transitioning to down-cycle bifurcation and, ultimately, a full correction.
Safeway (NYSE:SWY): Credit Suisse upgraded Safeway two notches, to Outperform from Underperform, to reflect low valuation and an under-appreciated opportunity to unlock value. Following recent management meetings, the analyst believes the company’s new CEO is considering options to unlock shareholder value that include divestitures in weaker markets. The firms notes that the sale of Southern California assets could yield a 20 percent upside. The price target on the shares has been raised to $34 from $26.
Covidien (NYSE:COV): William Blair said Covidien’s fundamental outlook remains compelling after the company’s operating margin outlook missed Street projections. The firm recommends buying the stock on weakness and keeps an Outperform rating on the name.