Analyst Comments

Moody's Investors Service (NYSE: MCO) announced it has downgraded Sprint Nextel's (NYSE: S) Corporate Family Rating to Ba2 from Ba1. Moody's believes the company's ability to slow the deterioration of its earnings is taking longer than originally anticipated. Consequently, the company's leverage is likely to deteriorate before stabilizing.

The outlook for Sprint Nextel's ratings is negative.

Moody's analyst sees continuing challenges in stabilizing its post-paid wireless operations amid intense competition and slowing industry growth.

Moody's affirmed the Baa2 rating of the company's bank credit facility due to the full repayment of revolving loans recently announced by the company.

Moody's also affirmed the Ba2 rating of Nextel Communications's (Nextel) debt, reflecting the structural seniority of these notes relative to other unsecured debt,

The Company has implemented cost reductions and efficiency gains, including a significantly reduced headcount, coupled with very low capital investment has allowed the company to increase its cash balances by over $2.2 billion while keeping debt levels flat so far this year. However, we expect liquidity to deteriorate from very strong levels as the company funds recently announced strategic initiatives, including its recently announced $1.2 billion investment in Clearwire (Nasdaq: CLWR) and the acquisitions of Virgin Mobile and iPCS, and free cash flow generation becomes more difficult.

"The continued negative outlook for Sprint's ratings reflects Moody's concerns about Sprint's ability to stabilize its operating performance and earnings in the face of a maturing market and fierce competition,
especially from AT&T (NYSE: T) and Verizon (NYSE: VZ)", said Moody's analyst.

Moody's has affirmed Sprint Nextel's SGL-1 speculative grade liquidity rating reflecting our expectation that the company will sustain very good liquidity over the next twelve months, proforma for the three
transactions noted above which are expected to require about $2.0 billion of cash.

Rating Changes include the following:

Issuer: Sprint Nextel Corporation
Corporate Family Rating, Downgraded to Ba2 from Ba1
Probability of Default Rating, Downgraded to Ba2 from Ba1
Speculative Grade Liquidity Rating, Affirmed at SGL-1
Senior Unsecured Bank Credit Facility, Affirmed Baa2, LGD2 - 12%
Senior Unsecured Regular Bond/Debenture, Downgraded to Ba3, LGD5 -
74%, from Ba2, LGD5 - 78%

Issuer: NEXTEL Communications, Inc.
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2, LGD3 - 39%

Issuer: Sprint Capital Corporation
Senior Unsecured Regular Bond/Debenture, Downgraded to Ba3, LGD5 -
74%, from Ba2, LGD5 - 78%

[SM]

As Fox Business reported a little earlier this morning, Rochdale's controversial banking analyst, Dick Bove, said that BofA's (NYSE: BAC) Chairman and former CEO, Ken Lewis, could return to the position of CEO.

For some months, BofA has been doing a thorough search to find a replacement for the high profile banking exec. While traders and the media have been feverishly speculating as to whether the candidates would come from inside or outside the firm, it now looks like Lewis has snuck his way back into talks, according to Bove.

Bove said that he believes BofA shareholders want Ken Lewis back in the busy CEO position.

Shares of BofA are trading around $16.03 today, currently down 0.3% from yesterday's closing price.

Many media companies will feel an impact from the announcement by Oprah Winfrey Friday, that her widely popular daytime talk show will be leaving the air in September 2011. Oprah, 55, plans to turn her attention to the new cable network that she is planning to launch in association with Discovery Communications Inc (NASDAQ: DISCA).

"The Oprah Winfrey Show," which debuted in 1986 as a Chicago-based local broadcast that quickly spawned into a media empire. The show is seen in more than 140 countries around the world, as it is one of the television industry's largest money-makers.

The show has long been the financial anchor of local daytime television station through the syndication of CBS Corp. (NYSE: CBS). As advertisers have cut back on money spent for television promoting, ad rates for Oprah's show have remained largely unchanged as 7.1 million viewer tune in per day on average.

The success of the show has allowed her to launch a magazine bearing her name, a book club, and the female-geared Oxygen cable network.

The loss of the Oprah Book club will surely have an impact of the publishing industry as her seal of approval on various book titles have been making instant bestsellers since she began recommending reading material in 1996. Books that are promoted by Oprah bear a seal of approval which is essentially a license to print money for publishers who are lucky enough to receive it.

"She has an integrity and connectivity to her viewership that is unmatched by any other television broadcast personality,” said Stuart Applebaum, a spokesman for Bertelsmann AG's Random House publishing. "Happily she enjoys reading books and wants to persuade her viewership to enjoy them as much as she does."

Oprah plans to be involved with every aspect of programming on "The Oprah Winfrey Network," which is set to be a 50-50 partnership with Discovery. OWN will replace the lowly Discovery Health Channel.

Analysts at Wedbush see a annual revenue loss of $50 million at CBS, noting that slumping ratings for the show would likely have an impact on the advertising rates in the future. The loss of the show could allow local stations to expand regional news coverage, which would save stations money, due to the subtraction of Oprah’s substantial license fees. Wedbush maintains a Neutral rating and a $13 price target.

Shares of CBS are down 2.86 percent to $12.93 in current market movement. Shares of Discovery are down 1.32 percent to $30.71.

Pali Research issued a note suggesting that MetroPCS (NYSE: PCS) should offer and Leap Wireless (Nasdaq: LEAP) should accept a deal to give LEAP shareholders 3.0 shares of PCS for each LEAP share.

The firm said a merger would unlock $2.0 billion of value from the increased strategic positioning of its combined spectrum position as well as the more than $200 million of annual cost synergies that could be achieved.

Pali Research said "investors should establish a paired trade position by shorting MetroPCS shares against a long position in Leap in a ratio of Leap's stock price to that of MetroPCS because we believe it’s reasonable that these companies will merge at a ratio that is at least 20% more than the current ratio of 2.1."

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Piper Jaffray & Co. reiterates an Overweight rating on American Superconductor (Nasdaq: AMSC), price target $45.

Piper analyst says, "We reiterate our Overweight rating on increased visibility into China wind growth. Using a sum of the parts valuation, we value the AMSC Power Systems business at $44, based on ~34x our CY2010 segment GAAP EPS estimate of $1.30 (from $1.29) – a premium with the leading wind peer multiple of ~23x given its higher growth and margin. Also, AMSC is essentially insulated from the credit crisis affecting the European and North American wind industry and is not at risk of delayed US stimulus spending. We value Superconductors business at $1, based on EV of ~4x CY10 segment revenue of $9.2M given the strategic value and long term potential."

To see all the upgrades/downgrades on shares of AMSC, visit our Analyst Ratings page.

American Superconductor Corporation provides megawatt-scale wind turbine designs and electrical control systems.