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Brokerage Beat: M&T Bank Corporation, Yingli Green Energy Holding Co., and STEC, Inc.

On the heels of a solid earnings report, Needham rewarded STEC with an upgrade

by 11/3/2010 2:30:09 PM
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Financial firm M&T Bank Corporation (MTB), solar concern Yingli Green Energy Holding Co. (YGE), and flash-storage sultan STEC, Inc. (STEC) were all on analysts' radar today. However, to put today's fresh brokerage attention into perspective, we have to consider each stock's technical and sentiment backdrops.

First up, M&T Bank Corporation (MTB) has been a favorite among bullish brokerage firms this week, after the company agreed to buy beleaguered Wilmington Trust Corp. (WL) at a bargain-basement price. More specifically, the deal values WL at $3.85 per share, representing a steep 46% discount to the stock's closing price of $7.11 on Friday.

In light of the merger-and-acquisition news, analysts at both KBW and Credit Suisse boosted their price targets on MTB to $79 and $90, respectively, on Tuesday. Echoing that trend, RBC Capital upgraded the shares to "outperform" from "sector perform" just this morning.

MTB analystsFrom a broader sentiment standpoint, there could be plenty more analyst affection in store for MTB. According to Zacks, only two of the 18 analysts following the stock consider it worthy of a "buy" or better endorsement. Plus, Thomson Reuters pegs the average 12-month price target on the equity at $84.69, implying expected upside of just 7% to MTB's intraday high of $79.25.

Elsewhere, short sellers have been flocking to the bearish bandwagon in droves lately. In fact, short interest on the stock skyrocketed by almost 95% during just the past month, and now accounts for 16.2% of the security's total available float. What's more, at MTB's average pace of trading, it would take more than four sessions for all of these pessimistic positions to unwind.

Technically speaking, MTB has advanced more than 5.7% so far this week, finishing Monday's session north of its 10-day and 20-day moving averages for the first time in more than a month. From a longer-term perspective, though, the equity could run into a speed bump in the overhead $82 neighborhood, home to its 10-month moving average. This trendline acted as support from August 2009 until September 2010, and could now switch roles to serve as resistance.

Should the shares of MTB extend their recent rally above this moving average, though, an unwinding of skepticism could work to the stock's advantage. Another dose of upgrades and/or price-target boosts, or a significant short-squeeze situation, could act as catalysts even higher for the security.

Moving on, Wedbush lifted its price target on Yingli Green Energy Holding Co. (YGE) to $12 from $11, according to Briefing.com. However, Wedbush's revised target is still relatively conservative compared to the consensus target of $14.66, as calculated by Thomson Reuters. This target not only represents a premium of 22% to YGE's current range near $12 a share, but also rests in territory the stock hasn't charted since mid-January.

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