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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Amerigroup(AMGP / NYSE)
Warburg Dillon Read
Initiating coverage with Strong Buy. The company focuses exclusively on the Medicaid managed care market in five states.Amerigroup has excellent enrollment growth prospects through expanding current markets and moving into new territories. Assuming a 20% discount, our target price is $23 per share.

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AOL Time Warner (AOL / NYSE)
Soundview
Downgrading from Strong Buy to Buy due to decelerating subscriber growth. AOL's ISP unit represents 45% of value; growth slowing here as broadband usage increases Don't expect company to meet 1.75mm subscriber goal this quarter

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CNA Surety Corporation (SUR / NYSE)
Smith Barney Shearson
Downgrade from OutPerform to Neutral based on exposure to ENE and trading within 2% of $15 price target.

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Convergys Corporation (CVG / NYSE)
Morgan Stanley Co.
Upgrade from OutPerform to Strong Buy. Raised target to $43. Expect 20-22% growth and rebound in 2003 Attracive valuation.

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Ecolab (ECL / NYSE)
ABN Amro
downgrading from ADD to HOLD. With the acquisition of theremaining 50% interest in its European JV last week from Henkel, ECL has doubled its European exposure at a time when Europe is weak and, appears to be getting weaker.

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Gilead Sciences (GILD / Nasdaq)
Warburg Dillon Read
downgrading from Buy to Hold on valuation concerns.

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Immunex Corporation (IMNX / Nasdaq)
Warburg Dillon Read
Downgrading from Buy to Hold on valuation concerns.

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J.P. Morgan Chase & Co. (JPM / NYSE)
Morgan Stanley Co.
Downgrade Outperform to Neutral. Exposure to ENE. Bullish long-term. Inflection not likely until 2H02.

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Micron Technology (MU / NYSE)
Merrill Lynch
Upgrade from Accumulate to Buy with $55 target. Strategic alliance with Hynix.

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Morgan Stanley (MWD / NYSE)
Goldman Sachs
Downgraded from Recommended List to Market Outperform. Feel stock is ahead of itself. Reducing estimates for 2002 by 45c to $3.45. 60% off Sept. lows.

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Nucor Corporation (NUE / NYSE)
Morgan Stanley Co.
Downgrade from Neutral to UnderPerform. Most attractive in sector but valuation looks streched. More cash than debt. Cash should build as startup costs decline. Trading above or near hist. highs.

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Phelps Dodge Corp. (PD / NYSE)
Morgan Stanley Co.
Downgrade from Neutral to UnderPerform on valuation. Gained 28% in 4 weeks which overcompensates for favorable industry news. Target $28.

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Robert Half Int'l (RHI / NYSE)
Morgan Stanley Co.
Downgrade from Strong Buy to OutPerform. Gained 44% since Sept.. Valuation still attractive but not as compelling near-term. Expected rebound in 2H02. 2003 growth and margins could beat assumptions. Target $31.

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Tyson Foods (TSN / NYSE)
Credit Suisse First Boston
Downgrading from Buy to Hold based on weakening fundamentals. Chicken markets have continued to to soften over the last two months, largely in the face of excess supply.

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Yahoo! (YHOO / Nasdaq)
SOUNDVIEW
Upgrading from Hold to Buy based on leverage to improved on-line advertising picture; $20 price target. 73% of rev from on-line advertising. New mgmt working with Madison Avenue-not against. Believe company can exceed estimates in coming quarters

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Altera Corp. (ALTR / Nasdaq)
JP Morgan Chase & Co.
Oct semi sales data worse than seasonal pattern; little evidence to support the notion that we are at the beginning of a cyclical upturn

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Amazon.com (AMZN / Nasdaq)
Lehman Bros
Possible positive news regarding AMZN's holiday season are largely inconclusive. No indications of AMZN's fourth quarter sales to do better than current estimates.

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AT&T Corporation (T / NYSE)
NEWS
The Wall Street Journal is reporting that AT&T T will be receiving final bids for its broadband unit. CMCSK, AOL Time Warner, COX, and MSFT are expected to submit offers.

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Bank of America Corp. (BAC / NYSE)
Lehman Bros
Management indicated comfortable with fourth quarter 2001 consensus expectations of $1.25 and 2002 new GAAP expectations of 5.62. We view expectations as realistic, maintain our Buy rating.

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Broadcom Corporation (BRCM / Nasdaq)
JP Morgan Chase & Co.
Oct semi sales data worse than seasonal pattern; little evidence to support the notion that we are at the beginning of a cyclical upturn

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Broadcom Corporation (BRCM / Nasdaq)
Weisel Partners
Believe BRCM will be 1st Comm IC name to return to meaningfulgrowth; Attractively valued vs peers, in our view; Reiterate Buy.

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Cisco Systems (CSCO / Nasdaq)
ABN Amro
maintain BUY rating and $25 price target and believe the analyst meeting, starting today, is a pivotal time for CSCO to present its brekaway strategy to take advantage of market growth opportunities and to share its competitive advantages

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Cisco Systems (CSCO / Nasdaq)
Dain Rauscher
Analyst conference scheduled for December 4-5, 2001. We expect the tone to be positive, highlighting leadership position and market share gains. Overall, we expect the stock to react positively over the next few days.

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E*Trade Group (ET / NYSE)
Warburg Dillon Read
met with Jarrett Lilien, Chief Brokerage Officer at E*Trade. The meeting highlights that ET has several resources that it has not fully leveraged in the past, which we believe bodes well for its future earnings power. However, decimalization and other competitive pressures have made the institutional business intensely competitive, which may limit ET's ability to gain incremental share in the immediate term. We maintain Hold rating based on current valuation.

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Ford Motor Company (F / NYSE)
NEWS
The Wall Street Journal is reporting that F will warn this week that it will miss fourth-quarter forecasts, and announce further restructuring initiatives.

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Gillette Company (G / NYSE)
Credit Suisse First Boston
We expext launch of Mach3 Turbo to boost sales in 2002. Our expected EPS for 2002 is 1.10 per share. We feel that the shares are fairly valued at this time.

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Home Depot (HD / NYSE)
Smith Barney Shearson
No suprises at meeting. Targeting 18%-20% EPS growth. Reiterate Buy and $60 target.

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Household International (HI / NYSE)
JP Morgan Chase & Co.
Defending Buy following negative Barron's (and Business Week) article regarding accounting issues; we believe no new news and explain HI's current multiple. announced $2bn buyback ($1bn next year) and 13-15% EPS growth leads us to recommend buying on any weakness today

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ILEX Oncology (ILXO / Nasdaq)
Piper Jaffray
Updating estimates 4Q01 -28c to -29c, 2001 -$1.39 to -$1.35, 2002 -62c to -50c. Raising target from $32 to $38. Completed patient accrual for Eflornithine Phase III.

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Intel Corporation (INTC / Nasdaq)
Morgan Stanley Co.
Increasing estimates 2001 46c to 48c, 2002 50c to 60c, 2003 85c to 95c, and price target from $40 to $45. Reiterate Outperform. Demand tracking ahead of conservative expectations.

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Intel Corporation (INTC / Nasdaq)
Smith Barney Shearson
Raising estimates ahead of 12/6 mid-qtr update; 4Q up 1c to 10c. Expect mgmt. to raise numbers. Demand for Pentium 4 running ahead of earlier expectations. Reiterate Buy and $40 target.

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Intel Corporation (INTC / Nasdaq)
Bank of America Montgomery
raising our recurring December quarter EPS estimate to 0.14 based on better than expected 10% growth in sequential microprocessor unit. We feel that with PC growth in 2002 and the microprecessor unit growth, INTC remains as our favorite large cap pick.

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JDS Uniphase Corporation (JDSU / Nasdaq)
Weisel Partners
Continue to believe JDSU will be best positioned optical components company when sector fundamentals improve; Reiterate Buy.

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Kimberly-Clark Corp. (KMB / NYSE)
Smith Barney Shearson
Raising 2003 EPS by 5c to $3.45. Target unchanged at $65. Conference this morning, no surprises except pension expenses increase more than expected.

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Kimberly-Clark Corp. (KMB / NYSE)
Goldman Sachs
Raising 2002 EPS by 6c to $3.51.Fundementals unchanged. 18c benefit for elimination of goodwill, 12c hit from pension expense. Reiterate Market Perform.

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MedImmune (MEDI / Nasdaq)
Merrill Lynch
Announced intention to aquire AVIR. Dilutive to 02 earnings, neutral to 03 and accretive thereafter. Increasing target to $70.

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Mellon Financial Corp. (MEL / NYSE)
Dain Rauscher
Mellon completed its branch sale to Citizens Financial for $2.1B. Will use proceeds to buy back stock and non-bank businesses.

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Microsoft Corporation (MSFT / Nasdaq)
JP Morgan Chase & Co.
Raising revenue ests DecQ from $7.3B to $7.4B, st $7.1B-$7.3B, EPS remains st high $0.50. new XBox prod cycle is doing well. Marketing expenses should offset higher rev, and we are leaving EPS ests unchanged. Reit Buy and Focus List

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Novellus Systems (NVLS / Nasdaq)
Credit Suisse First Boston
Lowered estimates for 2002 to .15 EPS due to lowered SAB 101 revenue to 200m. Clear indication that front-end oreders have not stabilized, where utilization remain below expected levels.

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Oracle Corporation (ORCL / Nasdaq)
Merrill Lynch
Lowering May 02 EPS from 48c to 45c. Could be weak this morning after another well known executive, Jay Nussbaum EVP of Sales leaves to take senior role at an Oracle partner. Only minor disruption expected.

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Oracle Corporation (ORCL / Nasdaq)
Robertson Stephens
Recommend taking profits. 20% downside risk. Lowering Nov. rev. from $2.51 to $2.33 Billion and EPS from 11c to 9c. Reports earnings 12/13.

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PeopleSoft Incorporated (PSFT / Nasdaq)
Dain Rauscher
Recent diligence suggests that PeopleSoft continues to gain traction in the market, and we are comfortable with our expectations for the current quarter. Reiterate our Buy-Aggressive rating and price target of $40.

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Staples (SPLS / Nasdaq)
NEWS
announced that Chairman and CEO Thomas G. Stemberg, will initiate a pre-arranged sale of a portion of his holdings in Staples. In compliance with SEC Rule 10b5-1, Mr. Stemberg will sell approximately 300,000 shares of Staples stock each quarter over a period of two years.

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Symantec Corporation (SYMC / Nasdaq)
Credit Suisse First Boston
Several new security products and services to be released over the next year. Raising our 12 month price target to $77, in light of the aggressive movement across the security sectore. valuation looks lucrative. Reiterate BUY.

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Tellabs (TLAB / Nasdaq)
Lehman Bros
Tellabs is transforming in multiple ways all of which should position them to exit the current industy morass in a stronger position than when the downturn began. We conclude that entry level of $15 should produce above average long term returns.

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UnitedHealth Group (UNH / NYSE)
Warburg Dillon Read
Analyst meeting on Thursday, 12/6 in Minneapolis; Expect conference to be upbeat and boost stock. Conference sets tone for next year's outlook. We are maintaining our Strong Buy rating.

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Walgreen Company (WAG / NYSE)
Lehman Bros
Lowereing our first quarter 2002 and 2002 EPS estimate to 0.17 and 0.99 to reflect gross margin deterioration due to a "hotter" promotional environment than we had previously anticipated. remain cautious near term, take profits.

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Weisel Partners (Growth Portfolio Stratgegy)
December Green Book; Focus on the strong outlook for consumerdiscretionary spending; We highlight AOL, CD, TIF, WSM, TMCS, RKY, COF, HI, FDC.

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JP Morgan Chase & Co. (Beverages)
Nielsen data out: Data now excludes WMT, volumes a little soft, PEP, BUD volumes look ok, KO surprisingly weak. CCE analyst meeting on Tues. We think large funding addition from KO unlikely (we think right move)

Dain Rauscher (Semiconductor Industry)
SIA data for October confirms our thesis that September was anextraordinary month for the industry and points to an impending bottom for the industry forming in early 2002. We expect a "U" shaped recovery to depress revenue growth in 2002, andthe near-term weakness calls for negative estimate revisions, skewing valuations towards risk. We remain cautious on the industry in the near term.

JP Morgan Chase & Co. (Strategy)
Tech groups have very high P/Es and ambtious EPS growth expectations, consumer staples have relatively low P/Es and more modest EPS growth expectations. We would be selling tech and buying staples in Dec but the big relative performance move in favor of staples may be in the Q102. We still think zero EPS growth next year is an optimistic call

Bear Stearns (Sentiment)
Technicals flat to bullish: SPX and NDX both 60%, 5 day moving average 62 and 60%. EQUITY P/C .64, INDEX P/C LOW AT 1.09.

Goldman Sachs (Brokers)
Time to pare back on brokers. At a slight premium to 5-yr historic average. Enron affect on JPM and C est. at 15c and 6c respectively. Cost cutting in industry slow to come. LEH and MER 9/11 impacts not completely disapated. Trimming 4Q EPS for LEH by 15c to 85c and MER by 5c to 57c.

Dain Rauscher (Cable/DBS)
We believe the cable space, despite its strength in recent weeks,remains undervalued when compared to historical levels. Charter, Comcast and Cablevision are the three names in the group wewould highlight. The cable MSOs continue to operate in a relatively benign regulatory environment.

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8:30 a.m. Personal Income & Outlays; Personal Income 0.1% and Consumer Spending 2.3%

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10:00 a.m. NAPM Survey, November 2001 41.0%

10:00 a.m. Construction Spending, October 2001 (0.5%)

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UBS Warburg 29th Media Week Conference New York, NY AOL, T, BBGI, BLC, CVC, CHTR, CCU, CMCSK, CDA, CMLS, DIG, DJ, DISH, EMMS, EVC, WPO, WINK, RTRSY, SEAC, TRB, TZA, UVN, USAI, VIA.B, V, GMST, TV, HADV, HSP, GM, IREP, KME, KRI, LBRT, LMCA, MHP, MGM, NWS, NTT, PSO

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LEHM Financial Services Conference LEH, FII, WM, CBH, NFB, TCB, COF, KRB, FBF, AXP

Oracle Open World Conference

Credit Suisse First Boston Media Week New York, NY NYT

GM November 2001 Sales & Production Release

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