- S&P reiterates buy recommendation on shares of Polo Ralph Lauren (RL)
September-quarter EPS of $1.58, vs. $1.09, beats our $0.96 estimate. Sales rose 10%, EBIT margin rose 250 bps with improvements on cost of goods sold and SG&A. Tax rate was down 520 bps. Retail comp-store sales rose 5%, ranging from 4% decline at Club Monaco to an 8% rise at factory stores. Business slowed mid-September, continuing into October, and we cut December-quarter and March-quarter EPS estimates to $0.87 and $0.62, from $0.98 and $0.76. Long-term strategy is intact with near-term marketshare opportunities despite reduced discretionary spending and store traffic. We raise our fiscal year 2009 (March) EPS estimate $0.35 to $4.00. -M. Driscoll-CFA - S&P reiterates buy opinion on shares of IAC/Interactivecorp (IACI)
After adjustments for certain non-recurring and non-cash items, IACI posts third quarter EPS of $0.25, vs. $0.17, $0.05 above our forecast. This year's figure excludes $0.39 related to the August spin-offs and a loss from debt extinguishment. Media and advertising revenues were weak, in our view, reflecting a de-emphasis on certain network partners and reduced marketing activity. Given economic challenges, we are cutting our EPS estimates for 2008 to $0.90 from $0.95, and 2009 to $1.10 from $1.20. Based on revised peer analysis, we are lowering our 12-month target price to $21 from $26. -S. Kessler - S&P reiterates buy opinion on shares of Medco Health Solutions (MHS)
Third quarter operating EPS of $0.63, vs. $0.44, meets our estimate. Revenue grew 15% on 5.6% rise in adjusted scripts. We see MHS benefiting from clients seeking to control drug spend amid soft economy. We like its strong account retention, $5.4 billion in net new 2008 sales and $4.9 billion gained so far for 2009. We are encouraged by its 22% higher EBITDA/adjusted script. We see more expansion in generic drug penetration, but at slower pace, since new accounts have low mail penetration. Adjusting our model, we trim our 2008 EPS estimate $0.02 to $2.33, 2009's $0.03 to $2.77, but keep our $49 target price. -P. Seligman - Baird expects Thor Industries (THO) to benefit from industry consolidation and the eventual recovery. Shares were upgraded to Neutral from Underperform.
- Jefferies upgraded SPSS Inc. (SPSS) to Buy from Hold on valuation and believes the company's cost cuts will be positive for EPS. The company's target was lowered to $28 from $29.
- Bank of America upgraded shares of Entergy (ETR) to Buy from Neutral on valuation and believes the company is unlikely to spin-off Enexus by year-end. They believe a spin-off in 2009 or no spin at all suggests a higher share price from current levels. The company's target was raised to $104 from $101.50.
- AMN Healthcare (AMN) was upgraded to hold from Sell at Citigroup.
- Argus upgraded Choice Hotels (CHH) to Hold from Sell.
- Transdigm Group (TDG) was lifted to Buy from Neutral at UBS.
- Bernstein Research raised its rating on Fifth Third Bancorp (FITB.O), Regions Financial Corp (RF.N) and Comerica Bank (CMA.N) to "outperform" from "market perform", all on valuation
Bernstein said it raised Fifth Third, Regions Financial and Comerica as they looked undervalued compared with expected 2010 earnings.
"Looking out 12 months, we believe the market will focus on a sequentially better 2010 and more normal tangible returns of 16 to 18 percent," it said.
Bernstein said it saw a peak in charge-offs in the third quarter of 2009 at the earliest.
- S&P reiterates sell opinion on shares of General Motors (GM)
We think the Obama presidential victory and the coming shift in party representation in Congress increases in the likelihood of additional financial assistance to the automotive industry, above the already approved $25 billion in loans. Our expectation reflects the number of direct and indirect jobs at risk from the industry, as domestic automakers struggle amid a deep industry recession. Separately, on Nov. 7 we expect GM to post a third quarter loss per of $5.98, vs. an adjusted $2.80 loss, and for Ford (F; 2.19) to lose $0.89 per share, vs. a $0.19 loss. -E. Levy-CFA - Bernstein Research downgraded Synovus Financial Corp (SNV.N) and Marshall & Ilsley Corp (MI.N) to "market perform" from "outperform"
The brokerage cut its ratings of Synovus and Marshall & Ilsley "on both valuations approaching our price targets and prolonged weakness in residential construction portfolios, where losses are likely to exceed our prior forecast," it said in a note to clients. - Deutsche Bank AG cut Southern Copper Corp. (PCU) to sell
Southern Copper Corp., the world’s seventh-largest producer of the metal, was cut to “sell” at Deutsche Bank AG after a rally pushed up its market valuation.
Phoenix-based Southern Copper’s American depositary receipts have risen 70 percent to $16.77 in the last six days, lifting the price-to-earnings ratio to 8 from 4.7. That compares with a 39 percent gain by rival Freeport-McMoRan Copper & Gold Inc.’s and a 14 percent rise in copper prices, Deutsche analysts including Jorge Beristain wrote in a note to clients today.
They downgraded Southern Copper’s rating from “hold,” maintaining a price estimate of $10. - Deutsche Bank Analysts cut their verdict on Nordex AG (NGX) to sell from hold.
German renewable energy stocks slumped in Frankfurt after Deutsche Bank AG recommended investors sell shares in companies including Q-Cells SE and Nordex AG, because of risks from tighter global credit.
The credit crisis should curb demand as ``restrictive'' financing limits the number of new wind farms or solar parks, Deutsche Bank analysts including Alexander Karnick wrote in a note to investors yesterday. Pricier and tighter capital should also drive down selling prices for renewable energy products as the industry enters a supply glut, according to the note.
``We anticipate oversupply, falling average selling prices, production cuts, liquidity issues and industry consolidation,'' the Frankfurt-based analysts wrote.
Deutsche Bank now says investors should sell their Q-Cells stock, compared to a previous ``buy'' recommendation. The analysts cut their verdict on Nordex to ``sell'' from ``hold.'' - Goldman Sachs downgrades Microchip Tech (MCHP) to sell
Goldman Sachs is out with a interesting downgrade to Sell on Microchip Tech (MCHP) noting their checks indicate the market is starting to shift away from its core strengths, leading them to reevaluate the story. Firm says they have done extensive field work on the microcontroller market, prompted in part by Microchip’s proposal on October 2, 2008, to acquire Atmel’s MCU business. They have conducted more than a dozen meetings and calls with industry participants and contacts. They also spent two full days at the Embedded Systems conference in Boston on October 27-28, meeting with dozens of companies in the MCU ecosystem to garner insight into the state of the market. The slowdown in Microchip’s core growth and impact from increasing competition in MCUs is at the center of the downgrade to Sell from Neutral as well as a reduction in estimates and price target.
GSCO expects Microchip’s growth to be negatively affected by the following three points:- checks suggest an increasing pace of upgrades away from 8 bit to 16 and 32 bit, driven in part by ARM-based products;
- Microchip is underexposed to fast-growing applications such as touch control and ultra low power;
- Increasing competition, especially from large diversified companies (STM, TXN Freescale), which may lead to pricing and gross margin pressure in addition to slower growth. These factors, combined with what they view as an unwarranted 20% premium valuation in MCHP relative to its peers, lead the firm to a more negative stance on the stock. Firm adds that MCHP has outperformed the SOX by 20% in the past year and by 40% from the market low in 2002. They are lowering 6-month price target to $21 from $26.
- Merriman downgraded shares of Emcore (EMKR) to Neutral from Buy on expectations reduced spending on network infrastructure and analog/cable components over the next two quarters could keep shares range bound. The firm believes Street estimates for the company's fiber optics business unit are too aggressive.
- Stephens cut Dean Foods (DF) to Equal Weight from Overweight following the company's Q3 earnings miss and lowered their target to $20 from $26.
- Argus downgraded Replidyne (RDYN) to Hold from Buy following the company's agreement to be acquired by Cardiovascular Systems.
- Blue Nile (NILE) and Fossil (FOSL) were downgraded to Underweight from Neutral at JP Morgan.
- Citigroup cut Health Net (HNT) to Sell from Hold.
- iPCS Inc. (IPCS) was lowered to Hold from Buy at Jefferies.
- S&P maintains hold opinion on shares of Time Warner Inc. (TWX)
Before $0.01 net one-time charges, third quarter EPS of $0.31, vs. $0.24, beats our and Street estimates by $0.01 and $0.04. We think third quarter benefited from Time Warner Cable (TWC; 21.00) and Turner Networks (TNT, TBS, HBO), which bucked industry trends on both higher revenues and lower program costs. Film studio was hampered by comparisons, though starting to see savings from New Line reorganization. Amid eroding subscriber base, AOL's notable 6% ads drop could complicate its near-term strategy. Sharply deteriorating Publishing trends prompted a deeper restructuring. - T. Amobi - CPA, CFA
INITIATION :
- Jefferies expects Nestle (NSRGY) to navigate the consumer slowdown through its "dominant brands" and easing input costs. Shares were initiated with a Buy rating.
- KeyBanc initiated Knight Transportation (KNX) with a Buy rating and $19 target. The firm is positive on the regional truckload market, Knight's strong financial position, and above average growth, among other reasons.
- Cytec Industries (CYT) was assumed with a Hold rating and $34 target at Citigroup. The firm prefers to stay on the sidelines given the near-term headwinds in the aerospace space.
- HSN Inc. (HSNI) was started at JP Morgan with an Underweight rating and $6 target.
- Credit Suisse assumed Equitable Resources (EQT) with an Outperform rating.
- Brink's Home Security (CFL) was initiated with an Overweight rating at Morgan Stanley.
Related Posts :
Sources :
- BusinessWeek: S&P Picks and Pans: Time Warner, Medco, GM, IAC/InterActiveCorp, Polo Ralph Lauren, November 5, 2008 10:24am EST
- BloggingStocks: Analyst calls: ETR, THO, AMN, DF, FOSL, NSRGY . . ., November 5, 2008 11:45am EST
- Reuters: UPDATE 1-Bernstein cuts Synovus, Marshall & Ilsley on value, November 5, 2008 8:59am EST
- Bloomberg: Southern Copper Cut to ‘Sell’ at Deutsche Bank After 70% Surge, November 5, 2008 07:38 EST
- Bloomberg: Renewable Energy Stocks Fall as Deutsche Bank Points to Risk, November 5, 2008 05:38 EST
- iStockAnalyst: Microchip Tech (NASDAQ:MCHP) Downgraded To Sell At Goldman Sachs, November 05, 2008 8:52 AM
This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.
You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.
No comments:
Post a Comment