Bullish on Toro debt

Toro's strong annual financial results last month have benefitted its bond rating. Moody's Investors Services affirmed the company's Baa3 senior unsecured rating and revised the rating outlook from negative to stable. Approximately $225 million in Toro debt is affected by the rating.

Moody analysts Paul Aran and Andris Kalnins wrote favorably of the Bloomington-based company's management through the economic downturn as it continued to invest in new products. When golf and landscape contractor markets turned around, Toro was able to capitalize. Annual revenue for the year ended Oct. 31 grew last year by 11 percent to $1.7 billion and diluted earnings per share rose 61 percent to $2.79 per share.

"Going forward, we believe the company's revenues will continue to increase along with improving economic conditions in the U.S. and Asia," Aran and Kalnins wrote. "However, expenses may be pressured by rising commodities costs. Overall, we believe the company has achieved a level of operating and financial flexibility that should enable it to sustain ... [a] Baa3 rating."

Scott Berg an analyst for Minneapolis-based Feltl and Co. has initiated coverage on St. Paul's Lawson Software. The software company traded at a 52-week high last week of $10.04. Berg has initiated his coverage with a "buy" rating and a $12 price target. "Lawson is a market leader in the Enterprise Resource Planning (ERP) software space, with unique growth opportunities within health care IT and the hyper-growth Human Capital Management software markets," Berg wrote. "We believe these growth opportunities will allow the company to grow faster than the overall ERP market."