Analyst Picks and Pans

Analyst Picks and Pans: Textron, Novavax, NICE Systems


Textron (TXT)

Goldman Sachs upgrades to buy from neutral

Each of Textron's businesses are near bottom and will likely start turning up, Goldman Sachs analyst Noah Poponak said on Sept. 2 as he upgraded the diversified conglomerate.

In a client note, he said Textron's Cessna aircraft unit, Textron's industrial business and even its troubled financial unit "are at or near trough and likely turning the corner."

Corporate jet business will likely continue to improve in the second half of this year and in 2010, and Textron's industrials business "could surprise to the upside" in the near term, Poponak said. In addition, credit and capital markets are improving, spurring potential asset sales and improved liquidity, he said.

Textron manufactures Cessna planes, Bell helicopters and turf maintenance equipment. Its finance arm, which finances new and used Cessna business jets, golf courses and vacation-resort developments, has been particularly hard hit by the recession.

Novavax (NVAX)

Oppenheimer & Co. downgrades to perform from outperform

Oppenheimer & Co. analyst Dr. Brian Abrahams downgraded the shares of the biotechnology company on Sept. 2 after its stock climbed past his $6 price target.

"Progress with both seasonal and pandemic vaccines, as well as the potential application of Novavax's technology against H1N1 (swine) flu, has led to substantial upside for shares over the past several months," he wrote in a note to investors.

The shares, which closed at $6.65 on Sept. 1, have more than tripled in value since June.

The analyst said positive midstage study data on the company's 3-in-1 flu vaccine generally validates the company's technology. The vaccine is aimed at swine flu and two other strains of influenza. "We expect Novavax will remain in high focus, particularly entering the flu season, when there are likely to be numerous pandemic flu headlines," he said.

NICE Systems (NICE)

William Blair & Co. upgrades to outperform from market perform

William Blair analyst Jonathan Ho upgraded NICE Systems on Sept. 2 after the Israeli security systems company said it acquired Fortent, a company that makes software for preventing money laundering and other financial crimes.

Nice announced its $73.5 million, cash acquisition of New York-based Fortent on Aug. 31.

William Blair analyst Jonathan Ho said the deal will "significantly strengthen NICE's market position, generating a projected $100 million in revenue."

"We believe the Fortent acquisition offers the benefit of a new growth engine for the business in an attractive market," Ho said. He added that NICE has a history of "strong acquisitions" and could use this one to build a broader customer base.

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