TheStreet Notes: A Daily Briefing of Wall Street Research and Analyst Actions

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Change In Ratings | Stock Comments / EPS Changes | Strategy Calls / Market Calls | Economics | Meetings | View Archived StreetNotes

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Artisan Components (ARTI / Nasdaq)
Dain Rauscher
downgrading to Neutral from Buy-Aggressive based on valuation. We expect continued sequential gains in royalty revenue from the introduction of Microsoft's Xbox, we do not see enough improvement to justify an earnings multiple greater than 50x our CY2002 earnings of $0.22 per share.

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Best Buy Company (BBY / NYSE)
Sanford Bernstein
initiating coverage with an outperform rating. We expect earnings growth in excess of 20% annually to continue through FY2006. We are forecasting EPS growth at a 24% CAGR throughFY2006. Revenue growth of 18% will be driven by the continued Best Buy store expansion of 60 stores per year for the next four years.

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Anheuser-Busch Companies (BUD / NYSE)
Weisel Partners
Initiate coverage with a Buy. We strongly emphasize brewing shares. Positive structural changes in the beer industry have produced higher growth rates and favorableeconomics.

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CACI International (CACI / Nasdaq)
Dain Rauscher
Initating coverage with Strong Buy, $84 price target. Revenue from federal government contracts comprise approximately 87% of revenue with 60% of total generated from Department of Defense contracts.

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Circuit City Group (CC / NYSE)
Robertson Stephens
Downgrading to Market Underperform from Market Perform based upon current valuation (including CarMax), unlikely to achieve growth and efficiency implied by current valuations, lack of visibility and observed loss of market share.

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Circuit City Group (CC / NYSE)
Sanford Bernstein
Initiating coverage with an underperform rating. Based on a sum-of-the-parts valuation incorporating separate multiples for the credit card business, the CarMax contribution and the core consumer electronics operations, we estimate that CircuitCity's stock is over-valued by approximately 15%.

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Circuit City Group (CC / NYSE)
Deutsche Banc Alex Brown
We believe the bottom is here, and that revenue will show a sequential improvement this quarter. Maintain Market Perform rating, but we are ready to turn positive again on CC, if the holiday season lives up to its expectations.

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Certicom Corp. (CERT / Nasdaq)
JP Morgan Chase & Co.
Downgrading from long term buy to market perform on declining momentum in core op biz. Expect another Q of tough bkgs, goal for profitability in Oct 02 a Q too aggressive, addt'l headcount reductions suggest no improvement, bulk of revs still from heritage biz and svcs. Ests unchgd.

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Check Point Software Tech (CHKP / Nasdaq)
JP Morgan Chase & Co.
Upgrading from long term buy to Buy, raising PT from $40 to $50 (40x02 $1.29), after IT Security Survey (done with Computer World) indicates IT security spending to grow 43% in 02, firewall/VPN primary beneficiary.

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Mack-Cali Realty Corp. (CLI / NYSE)
Credit Suisse First Boston
Downgrading from Strong Buy to Buy, because of the company's exposure to the New York real estate market.

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Emmis Communications Corp (EMMS / Nasdaq)
Goldman Sachs
Downgrading to Market Outperform from Recommended List following departure of Doyle Rose, President of Emmis Radio. Risk/reward less attractive.

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Equity Office Properties (EOP / NYSE)
Credit Suisse First Boston
Downgrading from Strong Buy to Buy, with a $32 price target.

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Sprint FON Group (FON / NYSE)
Dain Rauscher
Initiating coverage with Neutral; potential upside from the sum of the parts valuation is outweighed by unfavorable revenue and earnings growth prospects. We believe investors should remain on the sidelines for now.

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Genesco (GCO / NYSE)
Smith Barney Shearson
Initiating coverage with an Outperform rating and $22 price target. Significant expansion opportunity (160-170 new stores annually). New store openings will drive earnings growth.

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ICOS Corporation (ICOS / Nasdaq)
Morgan Stanley Co.
Initiating coverage with an Outperform rating and $61 price target.

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ICOS Corporation (ICOS / Nasdaq)
Credit Suisse First Boston
Initiating coverage with a Buy rating and $75 price target. We believe the company can become profitable by 2004.

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ImClone Systems (IMCL / Nasdaq)
Morgan Stanley Co.
Resuming coverage with an Outperform rating, and raising our price target to $76 per share. We believe the company's lead oncology antibody will receive approval by next April, and have increased our estimates to reflect this.

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Coca-Cola Company (KO / NYSE)
Weisel Partners
Initiate coverage with Attractive. Major financial and strategic overhauls have taken place and is rebuilding its global beverage franchise.

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Oracle Corporation (ORCL / Nasdaq)
Credit Suisse First Boston
Downgrading from Buy to Hold, following the company's earnings warning. We believe the current weakness is being experienced across all business lines and geographic regions.

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Oracle Corporation (ORCL / Nasdaq)
NEWS
Chairman and CEO Lawrence Ellison suggested yesterday that they may not meet the 11c/share forecasted by analysts for the second quarter. Speaking from the Comdex Technology Conference in Las Vegas, Mr. Ellison said be believes Oracle will earn 9c to 10c/share for the quarter.

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PDI Inc.(PDII / Nasdaq)
JP Morgan Chase & Co.
Downgrading from long term buy to market perform on lower guidance caused by co-promo of NVS's. We believe risk remains to lowered ests. We are throwing in towel, stock will likely trade down heavily.

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PepsiCo (PEP / NYSE)
Weisel Partners
Initiate coverage with Attractive; major financial and strategic overhauls have taken place and has strengthened its position in beverages and snack food.

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Pacific Sunwear of CA (PSUN / Nasdaq)
Goldman Sachs
3Q results released of 27c beat our 25c estimates. 2001 Earnings estimates increased to 79c from 77c and 2002 estimates from 85c to 87c. 4Q est. of $0.30 is slightly below management's guidance of $0.33-0.37.

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Pacific Sunwear of CA (PSUN / Nasdaq)
Warburg Dillon Read
Downgrading from Buy to Hold, based on valuation. Management has adopted a defensive stance, which will curb growth through the first half of 2002.

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Adolph Coors Company (RKY / NYSE)
Weisel Partners
Initiate coverage with a Strong Buy. We strongly emphasize brewing shares. Positive structural changes in the beer industry have produced higher growth rates and favorableeconomics.

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Stericycle (SRCL / Nasdaq)
Warburg Dillon Read
Reinstating coverage with a Buy rating. We are also raising estimates and price target to $60 per share.

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United Rentals (URI / NYSE)
Goldman Sachs
Downgrading to Market Outperform from Recommended List given a deteriorating construction outlook, recent share price strength and the lack of a near term catalyst. We look for 10-15% price appreciation over the next 12 months.

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Vertex Pharmaceuticals (VRTX / Nasdaq)
Morgan Stanley Co.
Initiating coverage with a Neutral rating and $28 price target.

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Watson Pharmaceuticals (WPI / NYSE)
SG Cowen
Downgrading from Buy to Neutral, after poor third quarter results. Our estimates are under review until we learn more from the conference call this morning.

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Zions Bancorporation (ZION / Nasdaq)
Morgan Stanley Co.
Initiating coverage with a Neutral rating and $58 price target. We believe the company new 2002 guidance is still aggressive, given the current environment.

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Applied Materials (AMAT / Nasdaq)
Piper Jaffray
Reporting October quarter 11/14. Could be weak due to the push out of shipments for a number of projects, particularly following the events on September 11. Bookings still declining, and will be below the company's guidance.

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Ciena Corporation (CIEN / Nasdaq)
Bear Stearns
Ciena's valuation is slightly aggressive. We believe that the company is one of the best-positioned optical companies in the market. Ciena has a solid balance sheet and generates positive cash flow. Reiterate Attractive rating and 18 month pricetarget of $30.

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Ciena Corporation (CIEN / Nasdaq)
Lehman Bros
Cutting fiscal 2002 estimates to EPS of $0.35 and sales of $1.6 billion. Maintain Market Perform rating.

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Ciena Corporation (CIEN / Nasdaq)
Robertson Stephens
Annouced preliminary solid results yesterday. Strong sales of CoreDirector switch, will little competition. Raising 2001 estimates from 57c to 61c, 2002 from 17c to 21c. Target $20.

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ChevronTexaco(CVX / Nasdaq)
Deutsche Banc Alex Brown
We believe the company's investment in the Dynegy/Enron deal will be accretive to earnings by 5% in 2002. Maintain Market Perform rating.

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Dell Computer Corporation (DELL / Nasdaq)
Credit Suisse First Boston
We believe the company could give conservative sales guidance for the fourth quarter, below current expectations. Maintain Buy rating, as the company continues to out-manuever its competitors.

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Amdocs Limited (DOX / NYSE)
Prudential Securities
Reiterate Buy based on market strength and compelling valuation. Management outlined the drivers behind its F2002 growth guidance in a series of Prudential sponsored investor meetings. Management appeared confident in wins needed to meet what could still be slightly aggressive '02 top line guidance.

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Duke Energy Corporation (DUK / NYSE)
ABN Amro
held its conference call regarding its trading, marketing and risk management activities. The company provided little information as to the level of earnings it has booked YTD under non-cash mark-to market transactions. We believe the company's level of disclosure falls far short of many of its peers.

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Eastman Kodak Company (EK / NYSE)
Warburg Dillon Read
Cutting fiscal 2002 estimate to $1.60 per share, because of lower expectations for gross margins. Maintain Hold rating.

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First American Corp. (FAF / NYSE)
Lehman Bros
Raising fourth quarter estimate, following positive investor meeting. We now expect the company to earn $0.57 per share, given the recent surge in refinancing activity. Our 2002 estimate is also under review. Reiterate Buy rating.

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Goldman Sachs Group (GS / NYSE)
Morgan Stanley Co.
Raising estimates and price target to $91 per share, as the company's core outlook has been improving. We now expect the company to earn $4.06 this year and $4.41 in 2002.

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IBM (IBM / NYSE)
Sanford Bernstein
Raising '02 Estimates to $4.90 from 4.80 due to FASB 141/142; '02 EPS May Be Conservative in Light of One-Time Charges in FY 01; Pension Returns Are Big Unknown.

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Johnson & Johnson (JNJ / NYSE)
Piper Jaffray
Accumulate on pullbacks; Topside of a major base; relative-strength uptrend intact; Health Care stocks becoming more mixed; major support at $53; stock is short-term extended.

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Juniper Networks (JNPR / Nasdaq)
NEWS
JNPR announced a definitive agreement to acquire privately-held Pacific Broadband Communications of San Jose, California in a stock transaction totaling approximately $200 million.

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Juniper Networks (JNPR / Nasdaq)
Warburg Dillon Read
We believe the Pacific Broadband deal is a net positive, despite the fact it will be dilutive by a penny in 2002.

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Nokia Corporation (NOK / NYSE)
JP Morgan Chase & Co.
CEO made announcements at COMDEX yesterday saying co would pursue open standard for software. Will license software for handset including user interface (most popular). Could look for additional revenue stream in next 12-18 mos. Could be modest uptick. Expect update at analyst meeting at end of month.

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Bank One Corporation (ONE / NYSE)
Lehman Bros
Raising price target to $40 per share, as the company's fundamentals are finally beginning to turn around.

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Roper Industries (ROP / NYSE)
NEWS
warned that it sees earnings for the fourth quarter of 54c/share, 13% above the year-ago level, but below the 57c/share forecasted by analysts.

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SBC Communications (SBC / NYSE)
Morgan Stanley Co.
Lowering 2002 estimate to $2.34 per share, because of higher CapEx spending at CIngular. Maintain Strong Buy rating.

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Symbol Technologies (SBL / NYSE)
ABN Amro
reiterate BUY rating and low $20s target after Intel's presentation of its 802.11a wireless LAN at Comdex this week. we believe that as INTC positions itself as the technology leader in 802.11a, it will validate the same position for SBL.

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Starbucks Corporation (SBUX / Nasdaq)
Lehman Bros
The consensus estimate still does not reflect that management will likely soon reduce fiscal 2002 guidance. Coffee prices are declining, but the company is not growing its revenue fast enough to reach management's bottom-line target.

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UnitedHealth Group (UNH / NYSE)
Merrill Lynch
The stock remains one of our top picks in the managed care sector, because of its established network and earnings visibility.

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Wind River Systems (WIND / Nasdaq)
Dain Rauscher
Maintain Neutral rating and recommend taking profits at these levels. Reporting 3Q02 earnings on Thursday. Wind continues to experience order delays and pushouts, with only those tools deemed essential by customers making it through longer sales cycles.

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SG Cowen (Semiconductors)
Absolute inventory has been declining in the supply chain we monitor. Our favorite stocks are CY and IDTI.

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Morgan Stanley Co. (Brokers)
Raising price targets across the board, as net interest margins should continue to improve in the asset management business. C and LEH offer the most upside from current levels.

Prudential Securities (Broadline Retailers)
Retailers are generally tracking below plan after the first week of November. Additionally, sales during the Holiday season may not be as robust as prior years. Cooler weather has helped stimulate sales of fall goods. But, we still look for comp-store sales to be down 3%-5% for our department store index for the month. Target's sales (and our discount store index) should benefit from a calendar shift adding several post-Thanksgiving shopping days to November this year compared with last year.We recommend TGT, FDO, WMT, KSS, HD, and LOW in the growth area and S and MAY in value.

Merrill Lynch (Hospitals)
The industry continues to have superior earnings momentum, even though some investors have begun to rotate out of the sector. We believe hospital firms will continue to outperform the market over the next 6-12 months.

Merrill Lynch (Airlines)
The industry will likely lose $5.4 billion in the second half of this year. The airlines cannot cut costs fast enough to be profitable, and demand will not likely return until 2003. Only buy the firms with the strongest balance sheets.

Smith Barney Shearson (Medical Supplies)
Top Picks in our universe, Abbott Labs (ABT) and Baxter (BAX). New product flow, consolidation, a defensive orientation within the equity market, and attractive valuations relative to the S&P. Reiterate Strong Buy.

Warburg Dillon Read (Oil)
We believe OPEC will agree to cut their daily production quota by 1.2-1.5 million barrels per day. With weak demand everywhere though, we believe the group will have trouble keeping prices in the $22-$28 range.

Morgan Stanley Co. (Strategy)
We believe investors are becoming overly optimistic about the market again. Cutting our 2002 real GDP growth estimate to 0.2%, and urge clients be more cautious in the markets.

Merrill Lynch (Medical Devices)
We believe investors should remain invested in this sector, despite its vast outperformance in 2001. Our top picks going into next year are BAX and JNJ.

JP Morgan Chase & Co. (Strategy)
We see Oct/Nov rally as looking like April/May rally. We believe will end the same, and expect new lows in Mar '02 due to earnings misses in Q4 and Q1 '01. Looking for a contraction in nominal GDP (1st time since 1982) Divergence between S&P 500 EPS growth and energy EPS growth for '02 is widest we find (in 45 years of data). We think greatest risk is in tech and financials.

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BTM Schroders Sales Index (Nov 10 week) will be reported at 9:00 a.m. ET.

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Oscillator: 3.8

Redbook Sales (Nov 10 week) will also be released at 9:00 a.m. ET today.

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CRA Analyst Meeting

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FNM Analyst Meeting

CSCO Shareholder Meeting/Webcast

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