Sandler O'Neill cuts estimates

Sandler O'Neill analyst Mark Fitzgibbon said on Apr. 21 that Northern Trust reported $0.61 first-quarter earnings per share, vs. his $0.97 estimate and the Wall Street consensus forecast of $0.96. Fitzgibbon said the EPS miss was due to weaker-than-expected fee income across the board and weaker interest income. The analyst noted that credit continued to slip with nonperforming assets rising 72%, while non-interest revenues fell 21%.

Fitzgibbon believes Northern Trust's assets under custody [AUC] and assets under management [AUM] will remain under pressure; he cut his $3.25 2009 EPS estimate to $2.45, and his $3.41 forecast for 2010 to $2.79. Although he thinks headwinds will persist for all trust banks well into the next year, Fitzgibbon believes a lot of bad news is already baked into Northern Trust's stock; he kept his hold rating.

Barrick Gold (ABX)

Thomas Weisel Partners upgrades to overweight from market weight

Thomas Weisel Partners analyst Heather Douglas attributed recent underperformance in Barrick shares to a temporary loss of direction after the Canada-based company transitioned to a new CEO, Aaron Regent, in January. She also cited the impact of a higher-than-expected cost outlook for 2009. Douglas raised her rating on the stock based on the current share price, which she said "represents a good entry point" in an Apr. 21 note.

Given the company's financial flexibility and management strength, Douglas said she expects the company to regain momentum. She said possible catalysts for growth this year include acquisitions to renew its project pipeline, operating improvements and cost savings. Douglas maintained a share price target of $40.

Apollo Group (APOL)

Lincoln Educational Services (LINC)

ITT Educational Services (ESI)

Credit Suisse downgrades each to neutral from outperform

Credit Suisse analyst Kelly Flynn said on Apr. 23 that she cut her ratings on Apollo, Lincoln, and ITT on concerns a more challenging legal/regulatory environment could hinder long-term growth and hold back valuation multiples in the near term. She removed Apollo from the firm's US Focus List.

Although she expects enrollment growth to remain strong for the next few quarters, Flynn believes consensus earnings estimates for ITT and Apollo are approaching levels that leave less room for upside than have been seen in several quarters.

Penn National Gaming (PENN)

Morgan Joseph cuts to hold from buy

Justin Sebastiano of Morgan Joseph started Penn with a buy rating in March on the premise that investors were not fully accounting for the Wyomissing, Pa.-based company's solid balance sheet or its well-run casinos and racinos, which are racetracks that have casinos. Since that time the market has caught up, according to the analyst, and the gap between Penn's stock price and his $25 price target has narrowed.

"Let us be clear, Penn National is still one of our favorite casino operators, but the stock is not, at these levels," Sebastiano wrote in a client note Apr. 21.

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