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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American Electric Power (AEP / NYSE)
Smith Barney Shearson
Adding to Recommended List Portfolio in order to add some more dividend yield to the portfolio. Outperform rating and $42 target.

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Applied Materials (AMAT / Nasdaq)
Smith Barney Shearson
Removing from recommended list due to sector weight adjustments. Shifting from a market weight position in Technology to a slight underweight position, rather than any specific company related issues.

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Anthem Inc.(ATH / Nasdaq)
Goldman Sachs
Initiating coverage on Recommended List with a $62 target. Among top 5 in Managed Care. No. 1 market share in 7 of 8 states. Exclusive use of BlueCross&BlueShield brand in all 8 gives marketing advantage. Room for acquisition growth.

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Anthem(ATH / Nasdaq)
Lehman Bros
Initiating coverage with a Strong Buy rating and $60 price target.

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Anthem(ATH / Nasdaq)
Merrill Lynch
Initiating coverage with a near-term Accumulate and long-term Buy rating.

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Anthem(ATH / Nasdaq)
Morgan Stanley Co.
Initiating coverage with a Strong Buy rating and $58 price target.

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Anthem(ATH / Nasdaq)
Warburg Dillon Read
Initiating coverage with a Strong Buy rating and $60 price target.

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Anthem(ATH / Nasdaq)
Bank of America Montgomery
Initiating coverage with a Buy rating and $60 price target.

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Franklin Resources (BEN / NYSE)
Bear Stearns
Downgrading from Attractive to Neutral, we think its 12% to 23% overvalued.

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Digene Corporation (DIGE / Nasdaq)
Goldman Sachs
Initiating coverage with Market Outperform and $38 target. Proprietary DNA based HPV test is the only FDA-approved diagnostic test for detecting types of human papillomavirus, the cause of virtually all cervical cancers.

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Edison International (EIX / NYSE)
Lehman Bros
Upgrading from Market Perform to Strong Buy, with a $19 price target. We believe the company's ability to restructure its business is being discounted in the market, and that our current cashflow estimates may prove conservative.

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Ensco International (ESV / NYSE)
Sanford Bernstein
Downgrading to market perform from outperform on valuation.

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Flowserve Corporation (FLS / NYSE)
Morgan Stanley Co.
Initiating coverage with an Outperform rating and $30 price target. We believe any improvement in the economy could provide upside to our estimates.

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Federal Realty Inv. Trust (FRT / NYSE)
Goldman Sachs
Downgrading to Market Underperform from Market Perform. Lowering estimates for 2002 from $2.79 to $2.61, 2003 from $2.83 to $2.75.

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Global SantaFe(GSF / NYSE)
Sanford Bernstein
Upgrading from market perform to outperform on valuation.

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Global SantaFe(GSF / NYSE)
Credit Suisse First Boston
Reinstating coverage with a Strong Buy rating and $34 price target.

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J.D. Edwards & Company (JDEC / Nasdaq)
Credit Suisse First Boston
Upgrading from Hold to Buy, with a $19 price target. We believe the positive pre-announcement from the October quarter is just the beginning of positive newsflow to come.

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LogicVision(LGVN / Nasdaq)
Warburg Dillon Read
Initiating coverage with a Strong Buy rating and $14 price target.

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LogicVision(LGVN / Nasdaq)
SG Cowen
Initiating coverage with a Buy rating and $13 price target. The company has a highly visible business model, and should reach profitability in fiscal 2002.

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Lucent Technologies (LU / NYSE)
Morgan Stanley Co.
Downgrading from Outperform to Neutral, based on valuation. We believe the stock is not worth more than $8, despite its positive restructuring progress.

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Lucent Technologies (LU / NYSE)
ABN Amro
Downgrading from ADD to HOLD. We are less confident LU will achieve positive sequential revenue growth in 2Q02 and are not certain the company will achieve positive EBITDA by then. In our view, management's goal of achieving 35% gross margin in fiscal 2003 also will be challenging.

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Micromuse (MUSE / Nasdaq)
Bank of America Montgomery
Upgrading from Market Perform to Buy, with an $18 price target.

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IndyMac Bancorp (NDE / NYSE)
Goldman Sachs
Upgrade to Trading Buy from Market Outperform. Most hedge and arbitrage related selling done. Near-term 10-15%, or to $25-26. Will meet or exceed Q4 consensus of $0.57 and '02 consensus of $2.38, or up 20%. Origination pipeline remains strong.

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Odyssey Healthcare(ODSY / NYSE)
Merrill Lynch
Initiating coverage with a Buy rating and $22 price target. The company operates in the hospice niche of the healthcare industry, and has the ability to post 25% annual EPS growth.

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Odyssey Healthcare(ODSY / NYSE)
SG Cowen
Initiating coverage with a Strong Buy rating and $25 price target.

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OmniVision Technologies (OVTI / Nasdaq)
Prudential Securities
Upgrading to Buy from Hold with a new price target of $10 (up from $5). Major European cellular handset OEMs planning to incorporate microcameras in some of their nextgeneration products; Omnivision well positioned for further design wins in handsets in our view. Channel checks indicate PC camera inventories may stabilize within 1-2 quarters

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Tellabs (TLAB / Nasdaq)
ABN Amro
Downgrading from ADD to HOLD and lowering our 2002 EPSestimate from $0.36 to $0.19. The stock is up more than 40% since 9/11 and is trading at a high P/E and P/S is 2X its peer group at 3.4X.

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UnitedHealth Group (UNH / NYSE)
Smith Barney Shearson
Downgrade from Buy to Outperform based on valuation. Maintaining $73 target. Few, if any, near-term concerns for meeting/beating consensus. Fundamental outlook for health insurance earnings momentum in 2002 is not as robust as in prior years

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WellPoint Health Networks (WLP / NYSE)
Smith Barney Shearson
Downgrade from Buy to Outperform based on valuation. Maintaining $125 target. Near-term concerns for meeting or exceeding consensus expectations

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Alcoa (AA / NYSE)
Prudential Securities
Because the SEC requires disclosure of material events and Alcoa has made none throughout 2001 concerning WMC nor ownership of AWAC, we do not believe Alcoa has made any formal offer forWMC nor entered into serious enough discussions to require disclosure.

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Alloy Online (ALOY / Nasdaq)
Dain Rauscher
We expect a solid earning report on Wednesday and view the name as a very logical consumer play.

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Advanced Neuromodulation (ANSI / Nasdaq)
Piper Jaffray
Receives FDA approval of genesis IPG device giving the company access to a $200 million market segment. We are adding $5 million in sales to our '02 model as a result of this earlier than expected approval. Target raised to $33.50. Strong Buy Reiterated.

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AOL-Time Warner (AOL / NYSE)
SG Cowen
AOL announced this AM its America Online division now has 32MM subs. This means AOL has added 665K subs since end of Q3, or in 58 days. AOL now has 38 days to reach our net sub add est of 1.7MM, which is low on the Street ? some are ests 2MM. While this will not immediately affect P&L, shares have traditionally reacted negatively to disappointing net sub adds.

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American Express Company (AXP / NYSE)
Sanford Bernstein
Consensus earnings estimates for AXP are too low. Beforerestructuring charges, the firm earned 44 cents/share in the September quarter. Assuming the same operating result in the December quarter (and no further write-downs), AXP will deliver $1.20/share for FY 01 (versus consensus of $1.17).

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Bank of America Corp. (BAC / NYSE)
Lehman Bros
Raising price target to $72 per share.

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Brocade Communications (BRCD / Nasdaq)
Morgan Stanley Co.
We believe the company will beat our January quarter numbers. Maintain Neutral rating, based on valuation.

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Comverse Technology (CMVT / Nasdaq)
Robertson Stephens
Increasing 2003 Operating EPS from 48c to 70c. Fine-tuning model ahead of earnings announcement. Revenue forecast down from $1190MM to $1110MM, reflecting more muted outlook for its voice mail business. Forecasting aggressive cost cutting should offset this reduction. Shares are fairly valued.

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Devon Energy Corporation (DVN / AMEX)
Lehman Bros
Lowering cash flow estimates because of lower expected oil prices. Maintain Market Perform rating.

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eBay (EBAY / Nasdaq)
Goldman Sachs
Raising 4Q01 rev/EPS to $215m/$0.13 from $206m/$0.12. Top e-commerce pick. Key drivers remain strong.

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Guidant Corporation (New) (GDT / NYSE)
Dain Rauscher
Increasing FY02 estimates to reflect potential acceleration inICD-revenues due to MADIT-2 and continued strength in domestic stent-franchise.

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Home Depot (HD / NYSE)
JP Morgan Chase & Co.
Buy rated; $58 price target. Do not expect the upcoming (11/29-11/30) analyst meeting to resolve the debate over HD's LT growth rate, but we do think the company will have a compelling returns story to tell. Long term eps growth is 18%, based on 12-14% top line growth, but believe management will set conservative expectations.

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Kraft Foods (KFT / NYSE)
NEWS
According to the Wall Street Journal, KFT issued a voluntary recall of certain Polly-O brand cheese products after government tests found a sample to contain salmonella bacteria.

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Mellon Financial Corp. (MEL / NYSE)
Lehman Bros
Reducing price target to $45 per share. Maintain Buy rating.

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National City Corporation (NCC / NYSE)
Lehman Bros
Lowering price target to $33 per share. Maintain Buy rating.

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Northrop Grumman Corp. (NOC / NYSE)
SG Cowen
Trimming estimates to $6.31 per share in 2001 and $6.65 for next year. The stock remains our top pick in the defense sector. Reiterate Strong Buy rating.

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Novellus Systems (NVLS / Nasdaq)
Lehman Bros
We believe the company will maintain guidance on its mid-quarter conference call this Thursday.

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QUALCOMM (QCOM / Nasdaq)
ABN Amro
Reiterate BUY rating and believe that future catalysts may comefrom announcements from India in 1Q02 for the creation of CDMA based wireless local loop networks, and from China in 1H02 foradditional CDMA 1XRTT build-out news

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Qwest Communications Int. (Q / NYSE)
Smith Barney Shearson
advocating a swap out of network wholesalers into Q and BRW since in past 5 weeks, LVLT & WCG have each risen 100-110% & GX by 50-60%, indicating some renewed bullishness in wholesale bandwidth plays.

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Riverstone Networks (RSTN / Nasdaq)
Morgan Stanley Co.
Raising price target to $16 per share. Reiterate Outperform rating.

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Taiwan Semiconductor (TSM / NYSE)
Goldman Sachs
Raised its 2001 pretax profit forecast 56% to NT$9.35 bn from NT$6 bn due to a surge in advanced geometry orders. Raised our EPS estimates 13% in 2001 to NT$0.81 and 37% in 2002 to NT$3.04. We have also raised our share target price to NT$104 (from NT$75) and reiterate our Recommended List stock rating.

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Wachovia Corporation (WB / NYSE)
Lehman Bros
Reducing price target to $34 per share. Reiterate Market Perform rating.

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Wachovia Corporation (WB / NYSE)
Goldman Sachs
Reduced 2002 EPS to $2.70 from $2.80 to reflect higher credit costs than previously estimated. New CFO working to improve risk profile and earnings growth consistency. Target mid $30s.

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Wal-Mart Stores (WMT / NYSE)
NEWS
reported record single-day sales for Friday, Nov. 23, of more than $1.25 billion, thanks to strong sales of home electronics, toys and small appliances.

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Prudential Securities (brokers)
As was expected, 4Q01 should show further weakness for the four securities firms, whose quarter runs September through November. (GS, MWD, LEH, and BSC). We expect pre-tax operating income to decline 12% from 3Q01 and 38% from 4Q00. The brokerage stocks have enjoyed a speculative rally in November, similar to others in the post peak period that have failed to stick. We remain neutral on the group for now.

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BEST (Sentiment)
Bullish sentiment back up: SPX 82%, NDX 72%, 5 day moving average flat at 70 and 68%. Equity P/C too low at .5, SPX P/C high at 2.06 on light volume.

JP Morgan Chase & Co. (strategy)
Lowering stocks (from 60% to 50%), raising bonds (from 20% to 25%), raising cash (from 20% to 25%) primarily due to the value of stocks vs bonds. In addition, VIX fell below 25 on 11/23, a pretty good sign of complacency. Year end 02E S&P 500 PT remains 950. Updated energy and financial sector models. Still like energy and don't like financials.

Deutsche Banc Alex Brown (Diversified Industrials)
Maintain Overweight opinion on the sector, despite high P/E valuations. We believe that TYC and TFX could report earnings surprises.

Morgan Stanley Co. (Specialty Retail)
Mall traffic appeared muted this weekend, as shoppers appeared to selectively look for discounts. Heading into the peak holiday shopping season, our top picks are ANF, ROST and AEOS.

Goldman Sachs (IT Services)
Resetting the valuation bar for 2002; sector still offers upside. No change in estimates or ratings. We raised our 12-month price targets on three stocks: ACN ($24 from $22; 15% upside), EDS ($82 from $75; 19% upside), and FDC ($80 from $75; 15% upside).

Smith Barney Shearson (Technology )
Shifting from a market weight position in Technology to a slight underweight position, rather than any specific company related issues.

Lehman Bros (Banks)
We believe the average stock in this sector is undervalued by 20%. Revenue growth will be the differentiating factor going forward.

Lehman Bros (Strategy)
We would move recent technology profits to traditional cyclicals. We believe another tech "bubble" is forming, given the fundamental growth story has not yet materialized.

Credit Suisse First Boston (Strategy)
We would move some funds from technology stocks to healthcare, which has not yet participated in this cyclical rally.

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Oscillator:

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No major indicators are slated for release today.

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Lehman Brothers Retail Seminar - New York, NY

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Deutsche Banc Alex. Brown Basic Industries Conference - Nov 26, 2001 to Nov 28, 2001 New York, NY

SG Cowen 3rd Annual Global Health Care Conference - Nov 26, 2001 to Nov 29, 2001 Paris

Credit Suisse First Boston Annual Technology Conference Scottsdale, AZ -- HNCS, NTIQ, SSTI, RSTN, CMRC

Robertson Stephens Medical Conference New York, NY -- NPSP, AGEN, DGEN, ALKS, CBST, ICOS, VRTX, WPI, MAXY, ORCH, ABI, EYE

MIKE - Michaels Stores stock split (2 for 1)

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