Analyst Actions: Walgreen, Alcoa, Rockwell, Brunswick - TheStreet

Analyst Actions: Walgreen, Alcoa, Rockwell, Brunswick

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Lehman Brothers

commented on retailer

Walgreen

(WAG)

this morning, while taking the unusual two-step of downgrading the stock and lifting its target price.

Analyst Meredith Adler cut Walgreen to outperform from buy but raised the stock's target price 15.8% to $44. Adler's commentary was largely positive, saying the drugstore chain "offered stable, high-teen EPS growth," and "carries little or no risk from the economy, higher fuel prices or currency issues." Still, Adler expressed concerns about the stock's valuation, saying it trades at a very high multiple of 49.1 times Lehman's 2000 estimate and 41.2 times its 2001 earnings-per-share estimate.

The downgrade is based on the stock's valuation, while the target price reflects a "high, but realistic, calendarized 2002

P/E of 39.2x". Lehman also lowered its 2001 EPS estimate to 86 cents from 87 cents, to reflect a new growth rate of 17.4%.

Merrill Lynch

commented on aluminum maker

Alcoa

(AA) - Get Report

in the wake of its earnings pre-announcement. Merrill reiterated the stock as a buy and said it was undervalued at its current price, adding it viewed the mild earnings announcement as a chance to add positions. Merrill said both the industry and company fundamentals are strong.

Lehman said Alcoa's price weakness provided a long-term buying opportunity.

Upgrades

Electronic component manufacturer

Electro Scientific Industries

(ESIO) - Get Report

received a fiscal year 2001 earnings estimate increase to $3.48 from a previous $2.85 from

Credit Suisse First Boston's

analyst John Pitzer.

Projecting growth from the company's increases in capacitor equipment, memory repair and drilling action, Pitzer said his 12-month price target for Electro Scientific was $60. He also raised estimates for fiscal 2002 to $3.90 from $3.42.

Donaldson Lufkin & Jenrette

raised its Electro Scientific first-year earnings-per-share estimate to $3.54 from $2.90.

GP Strategies

(GPX) - Get Report

: UP to buy from hold at

ING Barings

.

Downgrades

Rockwell International

(ROK) - Get Report

: DOWN to hold from buy at ING Barings.

Initiations

Brunswick

(BC) - Get Report

: NEW buy rating at CSFB; price target: $30.

Exar

(EXAR)

: NEW intermediate-term accumulate and long-term buy at Merrill Lynch: 12-to-18 month price target: 135

Parker-Hannafin

(PH) - Get Report

: NEW buy rating at CSFB; price target: 50.