This Just In: More Upgrades and Downgrades

At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." While the pinstripe-and-wingtip crowd is entitled to its opinions, we've got some pretty sharp stock pickers down here on Main Street, too. (And we're not always impressed with how Wall Street does its job.)

Given this, perhaps we shouldn't be giving virtual ink to "news" of analyst upgrades and downgrades. And we wouldn't -- if that were all we were doing. Fortunately, in "This Just In," we don't simply tell you what the analysts said. We also show you whether they know what they're talking about.

Today, our top trio of newsmakers includes two blue chips that have just had their price targets smashed to crumbs: Procter & Gamble (NYS: PG) and ConocoPhillips (NYS: COP) . And on the good news side of the ledger, we'll find out why one analyst thinks he's dug up a bargain at Silver Wheaton (NYS: SLW) .

Tide goes out for Procter & Gamble
First up, the company behind such venerable brands as Tide, Pampers, and Duracell has been struggling to make headway with consumers of late. In these hard economic times, its premium brands just aren't attracting dollars, with the result that last quarter's sales grew an anemic 1.5% (while earnings were down 10 times as much).

Recognizing this, analysts at Caris & Co. -- who were never that hot for the stock to begin with -- sliced another $4 off their price target for the "average"-rated stock this morning. Their new target, $62 a stub, suggests the best investors can hope to achieve is about a 5% profit from this stock over the next 12 months. Hardly inspiring, but is Caris right to be so pessimistic?

Actually, yes, it probably is. You see, even after a declining price and lagging the S&P 500 for the past year, P&G shares are still just as richly priced as its products on the shelves. At more than 18 times trailing earnings, the stock doesn't look like a bargain based on its sub-7% projected growth rate. Worse, P&G's actual free cash flow is even lower than the profits it claims to be earning.

Mind you, I'm not saying Procter & Gamble is a bad company, exactly, just that at this price, it's not yet a good bargain.

Drilling for value
A better bargain may be found in the shares of the little company whose target price just got whacked by analysts at Oppenheimer. Maybe you've heard of it? ConocoPhillips.

With oil prices plunging, and analysts pessimistic about future profits at the company, Oppenheimer took an ax to its previous prediction that Conoco would soon be worth $90 a share. The analyst now thinks $65 is more likely. (Oppy's not alone in such pessimism about oil. Just this morning, analysts at RBC Capital Markets made similar snips to the target prices of Patterson-UTI (NAS: PTEN) and Precision Drilling (NYS: PDS) and downgraded those two stocks to "sector perform.")

In contrast, Oppenheimer still rates Conoco an "outperform," and I think you can see why. Priced at less than six times earnings, Conoco shares are exceedingly cheap today. Indeed, if the stock grows not at all, it might be worth paying this price just to capture the company's 4.9% dividend yield, a full 1.1 percentage points higher than P&G's divvy, by the way.

There's silver in them thar hills!
But if you really want to make out like a bandit, the best idea of all may be the stock that RBC upgraded. Turning its divining rod toward precious metals, RBC initiated coverage of miner Silver Wheaton with an "outperform" rating and a $43 price target.

Now, with the stock trading for just $26 and change, this probably sounds like an aggressive target to you, but, in fact, it might be conservative. Priced at just 16 times earnings, and with strong free cash flow that backs up more than 91% of reported income, Silver Wheaton is expected to run circles around P&G and Conoco in any growth race. Consensus targets suggest the stock could grow earnings as much as 23% per year over the next five years.

Any value investor will tell you that's a good growth rate for the price Silver Wheaton shares fetch. Any bank depositor will tell you the 1.4% dividend payout isn't too shabby, either. As for me, I think the shares are cheap enough that I'm willing to go on record predicting this stock will outperform the market. I could be wrong, though, so feel free to follow along on my CAPS page (and laugh, if appropriate) and see how the pick works out.

Whose advice should you take -- mine, or that of "professional" analysts like Caris, Oppenheimer, and RBC?Check out my track record on Motley Fool CAPS, andcompare it to theirs. Decide for yourself whom to believe.

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The Motley Fool owns shares of Precision Drilling, andMotley Fool newsletter serviceshave recommended buying shares of Procter & Gamble, but Fool contributorRich Smithdoes not own (or short) shares of any company named above. You can find him on CAPS, publicly pontificating under the handleTMFDitty, where he's currently ranked No. 334 out of more than 180,000 members. The Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors.

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