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TheStreet Notes: A Daily Briefing of Wall Street Research and Analyst Actions
Updated from 8:34 a.m. EST
Second Edition
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Change In Ratings | Stock Comments / EPS Changes | Strategy Calls / Market Calls | Economics | Meetings | View Archived StreetNotes
AFLAC
(AFL / NYSE)
ABN Amro
Initiating coverage with a BUY rating and $35 target; AFL's US business is the principal reason to buy the stock in 2002, in our view. The company's successful duck ads are driving agent recruiting, the leading indicator of future sales growth.
American Int'l Group Inc
(AIG / NYSE)
ABN Amro
Initiating coverage with a BUY rating, $100 target and 2001-2003 EPS estimates of $2.82, $3.46 and $3.95. We believe the valuation is attractive and the near and long-term outlook has improved significantly given the hardening P&C market & a US recovery.
Anadarko Petroleum Corp.
(APC / NYSE)
Bank of America Montgomery
Lowering 2002 EPS and price target estimates to $3.39 and $76 per share, based on lower forecast production growth.
Anadarko Petroleum Corp.
(APC / NYSE)
Lehman Bros
Lowering 2002 EPS to $0.80 reflecting APC's recent guidance on lower production estimates for 2002, due to falling oil and gas prices. Lowered price target to $48, maintain Marker Perform rating.
Anadarko Petroleum Corp.
(APC / NYSE)
ABN Amro
Downgrading from ADD to HOLD, lowering our 2002 EPS estimate from $1.85 to $1.64, our 2003 EPS estimate from $2.94 to $2.60 and our target from $63 to $53 after the company pre-announced 4Q01 well below our estimate. 2002 production is now expected to be flat with 2001 levels.
America West Holdings
(AWA / NYSE)
Goldman Sachs
Upgrade to Outperform from Neutral. More than sufficient liquidity to outlast downturn, thanks to Government grant.
Ball Corporation
(BLL / NYSE)
Merrill Lynch
Initiating coverage with a near-term Buy and long-term Strong Buy rating, and $79 price target. The company will continue to see margin growth in 2002, which should lead to 40% year/year EPS improvement.
Crown Cork & Seal Co. Inc
(CCK / NYSE)
Merrill Lynch
Initiating coverage with a Neutral rating. We believe the company's asbestos liabilities will weigh heavily on CCK's shaky financial structure.
Clear Channel Communic.
(CCU / NYSE)
Morgan Stanley Co.
Initiating coverage with a Strong Buy rating and a $64 price target. CCU is the largest US radio group, where it still has room for multiple expansion relative to its 20x historical average multiple.
Cablevision Systems Corp.
(CVC / NYSE)
Weisel Partners
Initiate w/ Attractive & $55 target; Leading MSO serves cable's top markets; Digital cable svc could serve as near-term catalyst.
Delphi Financial Group
(DFG / NYSE)
ABN Amro
Upgrading from HOLD to BUY and raising our target from $34 to $38 driven by stronger earnings growth from its excess workers' compensation business and relatively inexpensive valuation.
Dollar General Corp.
(DG / NYSE)
NEWS
announced audited restated financial statements for its fiscal years 2000 (restated from 62c to 51c/share (ex-litigation charges)), 1999 (restated from 65c to 55c/share), and 1998 (restated from 54c to 45c/share).
Dollar General Corp.
(DG / NYSE)
Deutsche Banc Alex Brown
Downgrading from Buy to Market Perform, following the company's restatement of prior earnings. The overall decline of $0.30 per share over a 3-year period weas worse than we had previously expected. We would advise that investors transfer funds into FDO as an alternative.
Dollar General Corp.
(DG / NYSE)
Credit Suisse First Boston
Lowering EPS estimates to $0.60 in fiscal 2002 and $0.74, to reflect the company's restatement of prior results. Maintaining annual growth expectations.
Dollar General Corp.
(DG / NYSE)
Morgan Stanley Co.
Downgrading from Outperform to Neutral based on surprisingly lower earning power, reduced estimates, management credibility issues and announcement of SEC investigation.
Entercom Communications
(ETM / NYSE)
Morgan Stanley Co.
Initiating coverage with a Neutral rating where our discounted cash flow looks compelling, however ETM is within 20% of its peak multiple. Prefer to build positions at a discount to its average multiple of 17x.
E*TRADE Group
(ET / NYSE)
Deutsche Banc Alex Brown
Raising 2002 earnings estimate to $0.47 per share, to match the company's new guidance. Maintain Buy rating and $14 price target, although the stock is trading at a premium to its peers.
E*TRADE Group
(ET / NYSE)
NEWS
reported fourth quarter earnings of 7c/share, above the 4c forecast, and the 2c/share reported in the same period last year.
E*TRADE Group
(ET / NYSE)
Robertson Stephens
Downgrade from Strong Buy to Buy based on valuation. Solid fundamentals in 4Q results. Beat the street by 3c. Raising 2002 EPS from 40c to 45c. Continues to be our top pick. Raising target from $13 to $15.
E*TRADE Group
(ET / NYSE)
Goldman Sachs
Reported 4Q EPS of 7c, 3c ahead of consensus. Strong activity from its mortgage business. Raising 2002 EPS by 8c to 46c. Brokerage still lackluster.
FreeMarkets
(FMKT / Nasdaq)
Bear Stearns
Initiating coverage with a Neutral rating and a 12-month price target of $25. Business model reaching inflection point.
Henry Schein
(HSIC / Nasdaq)
Goldman Sachs
Upgrade to Trading Buy from Outperform and setting a $48 target based on valuation. Raising 2002 EPS from $2.48 to $2.50.
Instinet Group
(INET / Nasdaq)
Goldman Sachs
Initiating coverage with Neutral rating. Top ECN. Solid volume growth. Too volatile to recommend at this time. 95% of revenue from agency stock trades. Summer launch of SuperSoes and NASDAQ Super Montage this year could help.
Jefferson-Pilot Corp.
(JP / NYSE)
ABN Amro
Initiate with an ADD and $54 target; Although the stock appears expensive relative to its life insurance peers, adjustments need to be made for the Communications business and equity investments, which represent about 20% of the firm's market capitalization.
Kimco Realty Corp.
(KIM / NYSE)
Salomon Smith Barney
Downgrade from Outperform to Neutral on KMart concerns. Removing from Blue Chip list. KMart is Kimco's largest tenant. Lowering target from $35 to $31.
Linear Technology Corp.
(LLTC / Nasdaq)
Merrill Lynch
Lowering our near-term rating from Strong Buy to Buy. Also reducing estimates and price target to $45 per share, as the company is facing increased pricing competition from MXIM.
Mediacom Communications
(MCCC / Nasdaq)
Weisel Partners
Initiate with Attractive & $23 target; Leading cable consolidator in non-metro markets
Nationwide Fncl. Svcs.
(NFS / NYSE)
ABN Amro
Upgrading from ADD to BUY & raising 2001-2002 EPS estimates and price target from $44 to $50. We expect greater earnings momentum as consumer savings trends improve, perhaps in late 2002.
Niagara Mohawk Holdings
(NMK / NYSE)
Deutsche Banc Alex Brown
Downgrading from Buy to Market Perform, based on valuation. There is little upside remaining in the stock, given the company's agreement to be purchased by NGG.
Nortel Networks Corp.
(NT / NYSE)
Piper Jaffray
Initiating coverage with a Neutral rating and $8.50 target. Attractive relative to group, not attractive relative to broader market. Positioned to gain share.
New Plan Excel Realty Tr.
(NXL / NYSE)
Bank of America Montgomery
Upgrading to Market Perform from Underperform based on management's continued success in executing its new strategy, improved quality of the company's portfolio, and increased FFO per share and the resulting decreased payout ratio.
Owens-Illinois
(OI / NYSE)
Merrill Lynch
Initiating coverage with a Strong Buy rating and $16 price target. We believe the world's-leading bottle manufacturer can grow earnings by 24% in 2002.
Oracle Corporation
(ORCL / Nasdaq)
Prudential Securities
Assuming coverage with a hold rating and an $18 price target. the core database products have a technology edge and are entrenched at customers. The overall demand picture in iT appears to have bottomed, and ORCL should be a beneficiary.
Principal Financial
(PFG / Nasdaq)
ABN Amro
Initiating with a BUY rating and $30 target. We believe PFG is well positioned to benefit from increased penetration of the pension market, rising asset values, and higher consumer savings as the economy strengthens.
Priority Healthcare Corp.
(PHCC / Nasdaq)
Goldman Sachs
Downgrade from Outperformer to Neutral. SGP limiting enrollment in Hep-C combo therapy. PHCC's concentration on Hep-C market remains a risk factor. Lowering 2002 EPS from $1 to 95c.
Aramark
(RMK / Nasdaq)
Goldman Sachs
Initiating coverage on Recommended List. Leading food service, uniform and facilities mgmt. outsourcer. Target $32.
Radio One
(ROIAK / Nasdaq)
Morgan Stanley Co.
Initiating coverage with a Neutral grade. Urban format focus gives ROIA strong young demos, and stellar rating growth. Prefer to build positions at a discount to its average historical multiple of 17x.
UAL Corporation
(UAL / NYSE)
Credit Suisse First Boston
Upgrading from Hold to Buy, with a $23 price target. We believe the company will show relatively higher year/year EPS growth in 2002, aided by a lower revenue base. Employees own 55% of the company, which we believe will motivate the company to be prudent about labor costs.
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Advance Auto Parts
(AAP / NYSE)
Salomon Smith Barney
Raising target from $55 to $60 and 2002 EPS from $1.85 to $2.13 based on upwardly revised guidance. Reiterate Buy.
Advance Auto Parts
(AAP / NYSE)
Lehman Bros
Raising 2002 and 2003 EPS estimates to $2.15 and $2.75. AAP raised 2002 guidance as a result on the successful integration thus far of the acquired Discount Auto chain. Maintain Strong Buy and a $60 price target.
Arch Coal
(ACI / NYSE)
Morgan Stanley Co.
Cut 2002 EPS estimates and price target to $1.60 and $30, as a higher average cost per ton is expected, which reflect our new estimates.
Barnes & Noble
(BKS / NYSE)
Credit Suisse First Boston
Raising price target to $44 per share. We believe the company's spin-out of its video game retail chain will help unlock equity value. Reiterate Buy rating.
BP p.l.c.
(BP / NYSE)
Morgan Stanley Co.
Substantially decreased 2002 EPS esimates based on lower forecasts for commodity prices and refining margins.
Brocade Communications
(BRCD / Nasdaq)
Dain Rauscher
Raising price target to $45 from $35 reflecting improving sector visibility.
Continental Airlines
(CAL / NYSE)
Credit Suisse First Boston
Raising loss estimates and price target to $35 per share. We belive margins are expanding, because of improving sales and falling gas prices.
Check Point Software Tech
(CHKP / Nasdaq)
NEWS
reported fourth quarter earnings of 30c/share, a penny above the Street forecast. Revenues were $140.43 million, versus $122.53 million a year ago.
Delta Air Lines
(DAL / NYSE)
Credit Suisse First Boston
Reducing loss estimates, but raising our price target to $36 per share. We now expect the company to lose $8.45 per share in fiscal 2001.
EchoStar Communications
(DISH / Nasdaq)
Deutsche Banc Alex Brown
We expect the company to report strong fourth quarter results, extending its lead in the satelite industry. Reiterate Strong Buy rating.
EMC Corporation
(EMC / NYSE)
Dain Rauscher
New price target of $18 reflects improved sector visibility.
Emulex Corporation
(EMLX / Nasdaq)
Dain Rauscher
New price target of $50 (up from $45) reflects growing growth visibility.
Fannie Mae
(FNM / NYSE)
Prudential Securities
reported 4Q01 EPS of $1.40. Operating earnings were nearly thirty cents above consensus. Results reflected solid book of business growth (up 16%), margin expansion (up 11 bp) and lower operating expenses. The outlook for growth remains solid. Raising '02 and '03 EPS ests. by $0.10 each to $6.00 and $6.80.
Fannie Mae
(FNM / NYSE)
Goldman Sachs
Raising 2002 EPS from $6.05 to $6.15. Reiterate Recommended List rating. Never better positioned. Strong earnings growth into 2003. Low credit costs. Target $100.
Goldcorp
(GG / NYSE)
Morgan Stanley Co.
Raised price target to $15, based on fair market vause estimate of $14.39 per share. GG's reserve upside potential remains promising.
Corning Incorporated
(GLW / NYSE)
NEWS
announced that it will take pre-tax operating charges of approximately $178 million ($109 million after-tax), in the fourth quarter, resulting in a loss of 28c to 29c/share, versus prior guidance, calling for a loss of 20c to 25c/share.
Corning Incorporated
(GLW / NYSE)
Warburg Dillon Read
Lowering 2001 earnings estimate to $0.18 per share, to reflect the company's new guidance. Maintain Hold rating.
Gap
(GPS / NYSE)
NEWS
Moody's Investors Service lowered its credit rating on GPS long and short-term debt ratings one notch each, to Baa3 and Prime-3 from Baa2 and Prime-2.
Goldman Sachs Group
(GS / NYSE)
Warburg Dillon Read
Raising our fiscal 2002 estimate to $4.58 per share, to reflect the elimination of amortization expenses. Maintain Hold rating.
Harley-Davidson
(HDI / NYSE)
Lehman Bros
Raising price target to $60, emphasizing confidence in Harley's business over the next 12-months. After visiting 15 dealers across TX, it was evident that business is strong as each one sold bikes at a premium.
hi/fn inc.
(HIFN / Nasdaq)
SG Cowen
Introducing 2003 EPS estimate of $0.19, based from drastically reduced industry projections, and acceleration in growth of networking business. Believe downside risk is limited. Maintain Buy rating.
Intel Corporation
(INTC / Nasdaq)
Merrill Lynch
We believe the company will meet or exceed fourth quarter estimates. Maintaining 2002 EPS estimates above consensus at $0.70 per share. Reiterate Buy rating and $40 price target.
J.C. Penney Company
(JCP / NYSE)
JP Morgan Chase & Co.
Expecting overall Jan comps up 5%-7%. Reiterate Buy and $30 price target. Stock has been down 10% in 2 days on drugstore industry issues, we believe Eckerd turnaround remains on track.
L-3 Communications Hldgs.
(LLL / NYSE)
Lehman Bros
Raising 2002 and 2003 estimates by $0.28 and $0.43, due to L-3's recent purchase of AIS spy plane franchise.
Loews Corporation
(LTR / NYSE)
Prudential Securities
Based on pricing information contained in S-3, increasing target price to $70 from $63. Valuation was based on extremely conservative multiples. The new price target is still reasonable on a relative multiple basis vs. historical trading ranges
McDATA Corporation
(MCDTA / Nasdaq)
Dain Rauscher
Raising price target to $40 from $35. Reflects our expectations for strong revenue and margin trends.
Medtronic
(MDT / NYSE)
Weisel Partners
Receives FDA approval for Activa; Further augment's Neuro, Spine & Diabetes franchise; Reiterate Buy.
Marvell Technology Group
(MRVL / Nasdaq)
Credit Suisse First Boston
Raising estimates and price target to $47 per share. We now expect the company to earn $0.36 in fiscal 2003, based on recent channel checks.
NVIDIA Corporation
(NVDA / Nasdaq)
Morgan Stanley Co.
Increasing 2002 EPS estimates to $1.50 in view of an excellent execution and strong demand across all its major product lines.
QLogic Corporation
(QLGC / Nasdaq)
Dain Rauscher
New $60 price target (up from $50) reflects improving fundamental trends at key customers.
Rent-A-Center Inc
(RCII / Nasdaq)
Lehman Bros
Uping fourth quarter and 2002 EPS estimates to $0.69 and $3.65, reflecting RCII's positive EPS guidance, as a result of better-than-expected sales and the implementation of margin enhancement initiatives.
Ross Stores
(ROST / Nasdaq)
Morgan Stanley Co.
Increasing price target and 2003 EPS estimates to $40 and $2.10. ROST's unit growth will continue to accelerate, enhancing company's ability to compete on a national scale. Reiterate Strong Buy.
Sun Microsystems
(SUNW / Nasdaq)
Credit Suisse First Boston
Lowering earnings estimates ahead of Friday's announcement. The company should meet December quarter expectations, but we believe the company will lower its forward guidance. Inventory appears to be building up in the retail channel, and we now expect the company to lose $0.14 per share in fiscal 2002. Maintain Buy rating.
Stilwell Financial
(SV / NYSE)
Bank of America Montgomery
Raising price target to $33 as we see momentum building that should lead to further improvement of its relative valuation.
Tyco Int'l. (NEW)
(TYC / NYSE)
NEWS
reported first quarter earnings of 74c/share, a 17% improvement from pro forma earnings of 63c/share in the same period last year. The estimate was 73c/share. For the second quarter, the company sees earnings of 80c to 82c/share, below the 86c/share forecast. Full year 2002 earnings are expected to come in at $3.70/share. The estimate was $3.67/share.
United Rentals
(URI / NYSE)
Deutsche Banc Alex Brown
Lowering fiscal 2002 EPS estimate to $1.95, as we believe the company will be a late-cycle beneficiary of the economic recovery. Maintain Buy rating.
Vitesse Semiconductor
(VTSS / Nasdaq)
Lehman Bros
Believe that CPE poduct cycle plays should continue to outperform pure-play telecom companies, where Vitesse is poised to have near-term earnings outperformance. Currently, 43% of revenues are in storage; we are cautiously optimistic and initiating a $15 price target.
WorldCom Group
(WCOM / Nasdaq)
Credit Suisse First Boston
Lowering estimates and price target to $12 per share. We now expect the company to post cash EPS of $0.92, as the long-distance fundamentals continue to erode. Maintain Hold rating.
WMS Industries
(WMS / NYSE)
Prudential Securities
Lowering FQ202 revenues to $46.3 million from $62.4 million and our EPS to $0.10 from $0.30. Lowering price target to $22. Maintaining Buy rating. Heightened regulatory scrutiny (following a former software bug) in a number of jurisdictions unexpectedly impacted slot machine sales.
Exxon Mobil Corporation
(XOM / NYSE)
Morgan Stanley Co.
Cut 2002 EPS estimates to $1.85 to reflect lower forecasts for commodity prices and refining margins.
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Piper Jaffray (Transport Equipment and Photonics)
Expanding coverage of LU, NT, TLAB, CIEN, ONIS and TELM. All Neutral except LU which is Underperform. Reovery expected. Challenges remain through 2003.
Warburg Dillon Read (Restaurants)
Initiating coverage on the industry, with a Neutral stance. We believe long-term fundamentals are attractive, but that valuations are currently too high. Our two Buy-rated stocks are MCD and EAT.
Credit Suisse First Boston (Airlines)
Recent meetings with top industry managers lead us to believe the company will recover in 2002. Booked load factors should begin to show year/year improvement in the coming months.
Bear Stearns (Sentiment)
Technicals improve again: bullish sentiment SPX 17%, NDX 16%, 5 day moving average still stuck at 45 and 47%. EQUITY P/C up to .8 which is bullish, SPX P/C up small to 1.4. Both SPX and NDX broke down through the 40 day moving average.
Lehman Bros (Cosmetics; Household and Personal Care)
The estimated calendar 2002 impact from foreign exchange rates has slightly worsened for most of our companies, due to the devaluation of the Argentine Peso and the weak performance of European and Japanese currencies. Current analysis captures each company's translation exposure. There may be further downside risk to 2002 given a hard-currency line in 15% of raw material costs. Company hardest hit in our universe is Dial, resulting in a lowered 2002 EPS estimates to $0.98. Othere companies affected are Gillete, P&G and Clorox, where estimates are already built in.
Deutsche Banc Alex Brown (Pharmaceuticals)
We believe fourth quarter EPS will grow 8.7% indsutry-wide, leveraged from 3.1% top-line improvement. The outlook for 2002 is bleak, as generic companies will take further market share. Maintain Neutral stance on the group.
Deutsche Banc Alex Brown (Cable)
We believe the companies in our universe will report in-line quarterly results, despite weak advertising conditions. We expect double-digit EBITDA growth in 2002, and believe that valuations remain attractive. Maintaining Overweight rating.
Credit Suisse First Boston (Aerospace/Defense)
We believe the firms in our universe will meet or beat fourth quarter estimates, but the key will be to watch for changes to 2002 EPS guidance. Our top picks remain RTN, ATK, and LLL.
Morgan Stanley Co. (Strategy)
We believe the next big move in stocks is down, not up. Investors should rotate into more stable areas, like utilities, energy and healthcare.
Credit Suisse First Boston (Chip Equipment)
We believe the order bottom is finally in place, and that forward guidance will be flat to slightly higher. Our favorite stocks are KLAC, CYMI, and TER.
Deutsche Banc Alex Brown (Wireless Services)
We would take advantage of the recent weakness in this group to add to positions. Our top picks remain NXTL, NXTP, and WWCA.
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Oscillator: 0.4
8:30 a.m. Advanced Retail Sales (Dec) -1.3%
8:30 a.m. Retail Sales Less Autos (Dec) 0.0%
4:00 p.m. Treasury Secretary Paul O'Neill is scheduled to address the the National Retail Federation in New York City.
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Click Here for the legal disclaimer.Change In Ratings | Stock Comments / EPS Changes | Strategy Calls / Market Calls | Economics | Meetings | View Archived StreetNotes
AFLAC
(AFL / NYSE)
ABN Amro
Initiating coverage with a BUY rating and $35 target; AFL's US business is the principal reason to buy the stock in 2002, in our view. The company's successful duck ads are driving agent recruiting, the leading indicator of future sales growth.
American Int'l Group Inc
(AIG / NYSE)
ABN Amro
Initiating coverage with a BUY rating, $100 target and 2001-2003 EPS estimates of $2.82, $3.46 and $3.95. We believe the valuation is attractive and the near and long-term outlook has improved significantly given the hardening P&C market & a US recovery.
Anadarko Petroleum Corp.
(APC / NYSE)
Bank of America Montgomery
Lowering 2002 EPS and price target estimates to $3.39 and $76 per share, based on lower forecast production growth.
Anadarko Petroleum Corp.
(APC / NYSE)
Lehman Bros
Lowering 2002 EPS to $0.80 reflecting APC's recent guidance on lower production estimates for 2002, due to falling oil and gas prices. Lowered price target to $48, maintain Marker Perform rating.
Anadarko Petroleum Corp.
(APC / NYSE)
ABN Amro
Downgrading from ADD to HOLD, lowering our 2002 EPS estimate from $1.85 to $1.64, our 2003 EPS estimate from $2.94 to $2.60 and our target from $63 to $53 after the company pre-announced 4Q01 well below our estimate. 2002 production is now expected to be flat with 2001 levels.
America West Holdings
(AWA / NYSE)
Goldman Sachs
Upgrade to Outperform from Neutral. More than sufficient liquidity to outlast downturn, thanks to Government grant.
Ball Corporation
(BLL / NYSE)
Merrill Lynch
Initiating coverage with a near-term Buy and long-term Strong Buy rating, and $79 price target. The company will continue to see margin growth in 2002, which should lead to 40% year/year EPS improvement.
Crown Cork & Seal Co. Inc
(CCK / NYSE)
Merrill Lynch
Initiating coverage with a Neutral rating. We believe the company's asbestos liabilities will weigh heavily on CCK's shaky financial structure.
Clear Channel Communic.
(CCU / NYSE)
Morgan Stanley Co.
Initiating coverage with a Strong Buy rating and a $64 price target. CCU is the largest US radio group, where it still has room for multiple expansion relative to its 20x historical average multiple.
Cablevision Systems Corp.
(CVC / NYSE)
Weisel Partners
Initiate w/ Attractive & $55 target; Leading MSO serves cable's top markets; Digital cable svc could serve as near-term catalyst.
Delphi Financial Group
(DFG / NYSE)
ABN Amro
Upgrading from HOLD to BUY and raising our target from $34 to $38 driven by stronger earnings growth from its excess workers' compensation business and relatively inexpensive valuation.
Dollar General Corp.
(DG / NYSE)
NEWS
announced audited restated financial statements for its fiscal years 2000 (restated from 62c to 51c/share (ex-litigation charges)), 1999 (restated from 65c to 55c/share), and 1998 (restated from 54c to 45c/share).
Dollar General Corp.
(DG / NYSE)
Deutsche Banc Alex Brown
Downgrading from Buy to Market Perform, following the company's restatement of prior earnings. The overall decline of $0.30 per share over a 3-year period weas worse than we had previously expected. We would advise that investors transfer funds into FDO as an alternative.
Dollar General Corp.
(DG / NYSE)
Credit Suisse First Boston
Lowering EPS estimates to $0.60 in fiscal 2002 and $0.74, to reflect the company's restatement of prior results. Maintaining annual growth expectations.
Dollar General Corp.
(DG / NYSE)
Morgan Stanley Co.
Downgrading from Outperform to Neutral based on surprisingly lower earning power, reduced estimates, management credibility issues and announcement of SEC investigation.
Entercom Communications
(ETM / NYSE)
Morgan Stanley Co.
Initiating coverage with a Neutral rating where our discounted cash flow looks compelling, however ETM is within 20% of its peak multiple. Prefer to build positions at a discount to its average multiple of 17x.
E*TRADE Group
(ET / NYSE)
Deutsche Banc Alex Brown
Raising 2002 earnings estimate to $0.47 per share, to match the company's new guidance. Maintain Buy rating and $14 price target, although the stock is trading at a premium to its peers.
E*TRADE Group
(ET / NYSE)
NEWS
reported fourth quarter earnings of 7c/share, above the 4c forecast, and the 2c/share reported in the same period last year.
E*TRADE Group
(ET / NYSE)
Robertson Stephens
Downgrade from Strong Buy to Buy based on valuation. Solid fundamentals in 4Q results. Beat the street by 3c. Raising 2002 EPS from 40c to 45c. Continues to be our top pick. Raising target from $13 to $15.
E*TRADE Group
(ET / NYSE)
Goldman Sachs
Reported 4Q EPS of 7c, 3c ahead of consensus. Strong activity from its mortgage business. Raising 2002 EPS by 8c to 46c. Brokerage still lackluster.
FreeMarkets
(FMKT / Nasdaq)
Bear Stearns
Initiating coverage with a Neutral rating and a 12-month price target of $25. Business model reaching inflection point.
Henry Schein
(HSIC / Nasdaq)
Goldman Sachs
Upgrade to Trading Buy from Outperform and setting a $48 target based on valuation. Raising 2002 EPS from $2.48 to $2.50.
Instinet Group
(INET / Nasdaq)
Goldman Sachs
Initiating coverage with Neutral rating. Top ECN. Solid volume growth. Too volatile to recommend at this time. 95% of revenue from agency stock trades. Summer launch of SuperSoes and NASDAQ Super Montage this year could help.
Jefferson-Pilot Corp.
(JP / NYSE)
ABN Amro
Initiate with an ADD and $54 target; Although the stock appears expensive relative to its life insurance peers, adjustments need to be made for the Communications business and equity investments, which represent about 20% of the firm's market capitalization.
Kimco Realty Corp.
(KIM / NYSE)
Salomon Smith Barney
Downgrade from Outperform to Neutral on KMart concerns. Removing from Blue Chip list. KMart is Kimco's largest tenant. Lowering target from $35 to $31.
Linear Technology Corp.
(LLTC / Nasdaq)
Merrill Lynch
Lowering our near-term rating from Strong Buy to Buy. Also reducing estimates and price target to $45 per share, as the company is facing increased pricing competition from MXIM.
Mediacom Communications
(MCCC / Nasdaq)
Weisel Partners
Initiate with Attractive & $23 target; Leading cable consolidator in non-metro markets
Nationwide Fncl. Svcs.
(NFS / NYSE)
ABN Amro
Upgrading from ADD to BUY & raising 2001-2002 EPS estimates and price target from $44 to $50. We expect greater earnings momentum as consumer savings trends improve, perhaps in late 2002.
Niagara Mohawk Holdings
(NMK / NYSE)
Deutsche Banc Alex Brown
Downgrading from Buy to Market Perform, based on valuation. There is little upside remaining in the stock, given the company's agreement to be purchased by NGG.
Nortel Networks Corp.
(NT / NYSE)
Piper Jaffray
Initiating coverage with a Neutral rating and $8.50 target. Attractive relative to group, not attractive relative to broader market. Positioned to gain share.
New Plan Excel Realty Tr.
(NXL / NYSE)
Bank of America Montgomery
Upgrading to Market Perform from Underperform based on management's continued success in executing its new strategy, improved quality of the company's portfolio, and increased FFO per share and the resulting decreased payout ratio.
Owens-Illinois
(OI / NYSE)
Merrill Lynch
Initiating coverage with a Strong Buy rating and $16 price target. We believe the world's-leading bottle manufacturer can grow earnings by 24% in 2002.
Oracle Corporation
(ORCL / Nasdaq)
Prudential Securities
Assuming coverage with a hold rating and an $18 price target. the core database products have a technology edge and are entrenched at customers. The overall demand picture in iT appears to have bottomed, and ORCL should be a beneficiary.
Principal Financial
(PFG / Nasdaq)
ABN Amro
Initiating with a BUY rating and $30 target. We believe PFG is well positioned to benefit from increased penetration of the pension market, rising asset values, and higher consumer savings as the economy strengthens.
Priority Healthcare Corp.
(PHCC / Nasdaq)
Goldman Sachs
Downgrade from Outperformer to Neutral. SGP limiting enrollment in Hep-C combo therapy. PHCC's concentration on Hep-C market remains a risk factor. Lowering 2002 EPS from $1 to 95c.
Aramark
(RMK / Nasdaq)
Goldman Sachs
Initiating coverage on Recommended List. Leading food service, uniform and facilities mgmt. outsourcer. Target $32.
Radio One
(ROIAK / Nasdaq)
Morgan Stanley Co.
Initiating coverage with a Neutral grade. Urban format focus gives ROIA strong young demos, and stellar rating growth. Prefer to build positions at a discount to its average historical multiple of 17x.
UAL Corporation
(UAL / NYSE)
Credit Suisse First Boston
Upgrading from Hold to Buy, with a $23 price target. We believe the company will show relatively higher year/year EPS growth in 2002, aided by a lower revenue base. Employees own 55% of the company, which we believe will motivate the company to be prudent about labor costs.
back to top Advance Auto Parts
(AAP / NYSE)
Salomon Smith Barney
Raising target from $55 to $60 and 2002 EPS from $1.85 to $2.13 based on upwardly revised guidance. Reiterate Buy.
Advance Auto Parts
(AAP / NYSE)
Lehman Bros
Raising 2002 and 2003 EPS estimates to $2.15 and $2.75. AAP raised 2002 guidance as a result on the successful integration thus far of the acquired Discount Auto chain. Maintain Strong Buy and a $60 price target.
Arch Coal
(ACI / NYSE)
Morgan Stanley Co.
Cut 2002 EPS estimates and price target to $1.60 and $30, as a higher average cost per ton is expected, which reflect our new estimates.
Barnes & Noble
(BKS / NYSE)
Credit Suisse First Boston
Raising price target to $44 per share. We believe the company's spin-out of its video game retail chain will help unlock equity value. Reiterate Buy rating.
BP p.l.c.
(BP / NYSE)
Morgan Stanley Co.
Substantially decreased 2002 EPS esimates based on lower forecasts for commodity prices and refining margins.
Brocade Communications
(BRCD / Nasdaq)
Dain Rauscher
Raising price target to $45 from $35 reflecting improving sector visibility.
Continental Airlines
(CAL / NYSE)
Credit Suisse First Boston
Raising loss estimates and price target to $35 per share. We belive margins are expanding, because of improving sales and falling gas prices.
Check Point Software Tech
(CHKP / Nasdaq)
NEWS
reported fourth quarter earnings of 30c/share, a penny above the Street forecast. Revenues were $140.43 million, versus $122.53 million a year ago.
Delta Air Lines
(DAL / NYSE)
Credit Suisse First Boston
Reducing loss estimates, but raising our price target to $36 per share. We now expect the company to lose $8.45 per share in fiscal 2001.
EchoStar Communications
(DISH / Nasdaq)
Deutsche Banc Alex Brown
We expect the company to report strong fourth quarter results, extending its lead in the satelite industry. Reiterate Strong Buy rating.
EMC Corporation
(EMC / NYSE)
Dain Rauscher
New price target of $18 reflects improved sector visibility.
Emulex Corporation
(EMLX / Nasdaq)
Dain Rauscher
New price target of $50 (up from $45) reflects growing growth visibility.
Fannie Mae
(FNM / NYSE)
Prudential Securities
reported 4Q01 EPS of $1.40. Operating earnings were nearly thirty cents above consensus. Results reflected solid book of business growth (up 16%), margin expansion (up 11 bp) and lower operating expenses. The outlook for growth remains solid. Raising '02 and '03 EPS ests. by $0.10 each to $6.00 and $6.80.
Fannie Mae
(FNM / NYSE)
Goldman Sachs
Raising 2002 EPS from $6.05 to $6.15. Reiterate Recommended List rating. Never better positioned. Strong earnings growth into 2003. Low credit costs. Target $100.
Goldcorp
(GG / NYSE)
Morgan Stanley Co.
Raised price target to $15, based on fair market vause estimate of $14.39 per share. GG's reserve upside potential remains promising.
Corning Incorporated
(GLW / NYSE)
NEWS
announced that it will take pre-tax operating charges of approximately $178 million ($109 million after-tax), in the fourth quarter, resulting in a loss of 28c to 29c/share, versus prior guidance, calling for a loss of 20c to 25c/share.
Corning Incorporated
(GLW / NYSE)
Warburg Dillon Read
Lowering 2001 earnings estimate to $0.18 per share, to reflect the company's new guidance. Maintain Hold rating.
Gap
(GPS / NYSE)
NEWS
Moody's Investors Service lowered its credit rating on GPS long and short-term debt ratings one notch each, to Baa3 and Prime-3 from Baa2 and Prime-2.
Goldman Sachs Group
(GS / NYSE)
Warburg Dillon Read
Raising our fiscal 2002 estimate to $4.58 per share, to reflect the elimination of amortization expenses. Maintain Hold rating.
Harley-Davidson
(HDI / NYSE)
Lehman Bros
Raising price target to $60, emphasizing confidence in Harley's business over the next 12-months. After visiting 15 dealers across TX, it was evident that business is strong as each one sold bikes at a premium.
hi/fn inc.
(HIFN / Nasdaq)
SG Cowen
Introducing 2003 EPS estimate of $0.19, based from drastically reduced industry projections, and acceleration in growth of networking business. Believe downside risk is limited. Maintain Buy rating.
Intel Corporation
(INTC / Nasdaq)
Merrill Lynch
We believe the company will meet or exceed fourth quarter estimates. Maintaining 2002 EPS estimates above consensus at $0.70 per share. Reiterate Buy rating and $40 price target.
J.C. Penney Company
(JCP / NYSE)
JP Morgan Chase & Co.
Expecting overall Jan comps up 5%-7%. Reiterate Buy and $30 price target. Stock has been down 10% in 2 days on drugstore industry issues, we believe Eckerd turnaround remains on track.
L-3 Communications Hldgs.
(LLL / NYSE)
Lehman Bros
Raising 2002 and 2003 estimates by $0.28 and $0.43, due to L-3's recent purchase of AIS spy plane franchise.
Loews Corporation
(LTR / NYSE)
Prudential Securities
Based on pricing information contained in S-3, increasing target price to $70 from $63. Valuation was based on extremely conservative multiples. The new price target is still reasonable on a relative multiple basis vs. historical trading ranges
McDATA Corporation
(MCDTA / Nasdaq)
Dain Rauscher
Raising price target to $40 from $35. Reflects our expectations for strong revenue and margin trends.
Medtronic
(MDT / NYSE)
Weisel Partners
Receives FDA approval for Activa; Further augment's Neuro, Spine & Diabetes franchise; Reiterate Buy.
Marvell Technology Group
(MRVL / Nasdaq)
Credit Suisse First Boston
Raising estimates and price target to $47 per share. We now expect the company to earn $0.36 in fiscal 2003, based on recent channel checks.
NVIDIA Corporation
(NVDA / Nasdaq)
Morgan Stanley Co.
Increasing 2002 EPS estimates to $1.50 in view of an excellent execution and strong demand across all its major product lines.
QLogic Corporation
(QLGC / Nasdaq)
Dain Rauscher
New $60 price target (up from $50) reflects improving fundamental trends at key customers.
Rent-A-Center Inc
(RCII / Nasdaq)
Lehman Bros
Uping fourth quarter and 2002 EPS estimates to $0.69 and $3.65, reflecting RCII's positive EPS guidance, as a result of better-than-expected sales and the implementation of margin enhancement initiatives.
Ross Stores
(ROST / Nasdaq)
Morgan Stanley Co.
Increasing price target and 2003 EPS estimates to $40 and $2.10. ROST's unit growth will continue to accelerate, enhancing company's ability to compete on a national scale. Reiterate Strong Buy.
Sun Microsystems
(SUNW / Nasdaq)
Credit Suisse First Boston
Lowering earnings estimates ahead of Friday's announcement. The company should meet December quarter expectations, but we believe the company will lower its forward guidance. Inventory appears to be building up in the retail channel, and we now expect the company to lose $0.14 per share in fiscal 2002. Maintain Buy rating.
Stilwell Financial
(SV / NYSE)
Bank of America Montgomery
Raising price target to $33 as we see momentum building that should lead to further improvement of its relative valuation.
Tyco Int'l. (NEW)
(TYC / NYSE)
NEWS
reported first quarter earnings of 74c/share, a 17% improvement from pro forma earnings of 63c/share in the same period last year. The estimate was 73c/share. For the second quarter, the company sees earnings of 80c to 82c/share, below the 86c/share forecast. Full year 2002 earnings are expected to come in at $3.70/share. The estimate was $3.67/share.
United Rentals
(URI / NYSE)
Deutsche Banc Alex Brown
Lowering fiscal 2002 EPS estimate to $1.95, as we believe the company will be a late-cycle beneficiary of the economic recovery. Maintain Buy rating.
Vitesse Semiconductor
(VTSS / Nasdaq)
Lehman Bros
Believe that CPE poduct cycle plays should continue to outperform pure-play telecom companies, where Vitesse is poised to have near-term earnings outperformance. Currently, 43% of revenues are in storage; we are cautiously optimistic and initiating a $15 price target.
WorldCom Group
(WCOM / Nasdaq)
Credit Suisse First Boston
Lowering estimates and price target to $12 per share. We now expect the company to post cash EPS of $0.92, as the long-distance fundamentals continue to erode. Maintain Hold rating.
WMS Industries
(WMS / NYSE)
Prudential Securities
Lowering FQ202 revenues to $46.3 million from $62.4 million and our EPS to $0.10 from $0.30. Lowering price target to $22. Maintaining Buy rating. Heightened regulatory scrutiny (following a former software bug) in a number of jurisdictions unexpectedly impacted slot machine sales.
Exxon Mobil Corporation
(XOM / NYSE)
Morgan Stanley Co.
Cut 2002 EPS estimates to $1.85 to reflect lower forecasts for commodity prices and refining margins.
back to topPiper Jaffray (Transport Equipment and Photonics)
Expanding coverage of LU, NT, TLAB, CIEN, ONIS and TELM. All Neutral except LU which is Underperform. Reovery expected. Challenges remain through 2003.
Warburg Dillon Read (Restaurants)
Initiating coverage on the industry, with a Neutral stance. We believe long-term fundamentals are attractive, but that valuations are currently too high. Our two Buy-rated stocks are MCD and EAT.
Credit Suisse First Boston (Airlines)
Recent meetings with top industry managers lead us to believe the company will recover in 2002. Booked load factors should begin to show year/year improvement in the coming months.
Bear Stearns (Sentiment)
Technicals improve again: bullish sentiment SPX 17%, NDX 16%, 5 day moving average still stuck at 45 and 47%. EQUITY P/C up to .8 which is bullish, SPX P/C up small to 1.4. Both SPX and NDX broke down through the 40 day moving average.
Lehman Bros (Cosmetics; Household and Personal Care)
The estimated calendar 2002 impact from foreign exchange rates has slightly worsened for most of our companies, due to the devaluation of the Argentine Peso and the weak performance of European and Japanese currencies. Current analysis captures each company's translation exposure. There may be further downside risk to 2002 given a hard-currency line in 15% of raw material costs. Company hardest hit in our universe is Dial, resulting in a lowered 2002 EPS estimates to $0.98. Othere companies affected are Gillete, P&G and Clorox, where estimates are already built in.
Deutsche Banc Alex Brown (Pharmaceuticals)
We believe fourth quarter EPS will grow 8.7% indsutry-wide, leveraged from 3.1% top-line improvement. The outlook for 2002 is bleak, as generic companies will take further market share. Maintain Neutral stance on the group.
Deutsche Banc Alex Brown (Cable)
We believe the companies in our universe will report in-line quarterly results, despite weak advertising conditions. We expect double-digit EBITDA growth in 2002, and believe that valuations remain attractive. Maintaining Overweight rating.
Credit Suisse First Boston (Aerospace/Defense)
We believe the firms in our universe will meet or beat fourth quarter estimates, but the key will be to watch for changes to 2002 EPS guidance. Our top picks remain RTN, ATK, and LLL.
Morgan Stanley Co. (Strategy)
We believe the next big move in stocks is down, not up. Investors should rotate into more stable areas, like utilities, energy and healthcare.
Credit Suisse First Boston (Chip Equipment)
We believe the order bottom is finally in place, and that forward guidance will be flat to slightly higher. Our favorite stocks are KLAC, CYMI, and TER.
Deutsche Banc Alex Brown (Wireless Services)
We would take advantage of the recent weakness in this group to add to positions. Our top picks remain NXTL, NXTP, and WWCA.
back to topOscillator: 0.4
8:30 a.m. Advanced Retail Sales (Dec) -1.3%
8:30 a.m. Retail Sales Less Autos (Dec) 0.0%
4:00 p.m. Treasury Secretary Paul O'Neill is scheduled to address the the National Retail Federation in New York City.
back to topNothing For Today
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