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

Author:: TSC Staff
Publish date:: Dec 5, 2001 9:25 AM EST

Second Edition

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AK Steel Holding Corp. (AKS / NYSE)
Smith Barney Shearson
Upgrading from Neutral to Buy, based on supply and demand and better labor and govt environment.

AmerUs Group Co. (AMH / NYSE)
Smith Barney Shearson
Upgrading from Neutral to Outperform based on strong 3Q01 results and positive investor meeting. Raising 2002 from $3.45 to $3.60, 2003 to $4 and price target from $35 to $38.

Andrew Corp. (ANDW / Nasdaq)
Morgan Stanley Co.
Initiating coverage with a Neutral rating. Andrew's strong operating model and earnings leverage postition the company well for the move into next-generation technologies.

Antofagasta plc (ANTO / Nasdaq)
Goldman Sachs
Downgrade from Market Outperform to Market Perform after price rally. Up 17% in past month. Weak near-term copper market. Higer costs in 02. Lowering 02 EPS from 38c to 27c.

Activision (ATVI / Nasdaq)
JP Morgan Chase & Co.
Initiating with long term buy, 12-month price target $27. 2nd largest independent interactive entertainment software company in NA. Recent run up in interactive entertainment software stocks reflects a certain amount of valuation elasticity and momentum, in our view.

Burlington Nrth./Santa Fe (BNI / NYSE)
Goldman Sachs
Initiated coverage with a Neutral, price target of $32. BNI has significant leverage to the economy and we believe that a bounce in the economy would provide upside for BNI stock. In the near term we don't see an obvious catalyst for BNI stock other than a quicker than expected recovery in the US economy.

Carreker Corporation (CANI / Nasdaq)
Piper Jaffray
Upgrade from Neutral to Buy. Improved visibility, increase in deferred revenue, gradual ramp in subsciption revenue and hefty software maintenance revenue. Raising estimates for 4Q from -13c to 0 and 2002 from 17c to 40c. Target $8.

Coca-Cola Enterprises (CCE / NYSE)
Credit Suisse First Boston
We are increasing our 2002 earnings estimates to $0.84 to reflect the company's new agreement with KO. This agreement gives CCE the flexibility to develop a sustainable profit growth model without burden of funding hurdles.

Coca-Cola Enterprises (CCE / NYSE)
Deutsche Banc Alex. Brown
Upgrading to Buy and increasing price target to $22. Coke appears to be giving CCE another chance on concentrate pricing to offset any material cost pressures. Thus, making CCE's financial targets of 6 to 8 % EBITDA growth achievable if not beat-able.

Coca-Cola Enterprises (CCE / NYSE)
Bank of America Montgomery
Raising EPS estimates to $0.02 for this year and $0.26 for fiscal 2002, to match the company's new guidance. Maintain Market Perform rating, as we believe upside is limited to $20 per share.

Coach (COH / NYSE)
Morgan Stanley Co.
Initiating coverage with an Outperform rating and a $40 price target. COH offers a powerful brand, solid top-line & store growth in the US & Japan. EBIT margin expansion should drive 17-18% plus near term EPS growth.

Rockwell Collins (COL / NYSE)
Merrill Lynch
Initiating coverage with an Accumulate/Buy opinion with an estimate EPS of $1.20 and $1.35 for 2002 and 2003. We believe that the stock can appreciate, although there is some risk of further weakness in Collin's commercial aerospace operations.

CSX Corporation (CSX / NYSE)
Bear Stearns
Initiated coverage with Neutral rating, price target of $40. We anticipate continuing operational improvement from CSX which is positioned for significant cost reductions and margin expansion, but see limited upside for CSX stock in the near term.

3D Pharmaceuticals (DDDP / Nasdaq)
Bank of America Montgomery
Initiating coverage with a Buy rating and $15 price target. We believe the company has a robust pipeline, given its relatively limited resources. The shares also look attractive at 2 times cash.

Delphi Financial Group (DFG / NYSE)
Lehman Bros
Initiating coverage with a Buy rating. We feel that DFG stock is well positioned for multiple expansion.

Danaher Corporation (DHR / NYSE)
ABN Amro
Downgrading from ADD to HOLD based on valuation. DHR will hold an analyst meeting on December 13th, giving management an opportunity to present its outlook for 2002. We would not be surprised if the meeting prompts other analysts to lower estimates.

Eastman Kodak Company (EK / NYSE)
Deutsche Banc Alex. Brown
We are downgrading kodak shares to Underperform from Market Perform and lower our 2002 EPS estimate to $1.75. Economic weakness and sum of parts analysis lead us to believe that EK is worth $20.

Intersil Corporation (ISIL / Nasdaq)
Piper Jaffray
Initiating coverage with a Buy rating and $40 target. Market leader in wireless LAN chipsets.

MetLife (MET / NYSE)
Bear Stearns
Upgrading to Buy from Neutral on valuation, robust double-digit sales growth, and deployment of $5-$6 billion in excess capital. price target is $37-$38 per share.

Norfolk Southern Corp. (NSC / NYSE)
Bear Stearns
Initiated with Neutral rating, price target of $18. Although we see considerable operational upside for NSC along with earnings growth, we believe these improvements are already discounted in the stock price and we see limited near term upside for NSC stock.

Nucor Corporation (NUE / NYSE)
Smith Barney Shearson
Upgrading from Neutral to Outperform based on supply and demand and better labor and govt environment.

Pinnacle Systems (PCLE / Nasdaq)
JP Morgan Chase & Co.
Upgrading to Buy from long term buy, initiating 12-month $10 PT.Q4 results will meet estimates and display improved investment characteristics. PCLE is increasing its market share in digital video editing versus its competition, through new product introductions and increased distribution.

Steel Dynamics (STLD / Nasdaq)
Smith Barney Shearson
Upgrading from Neutral to Buy, based on supply and demand and better labor and government environment.

Tularik (TLRK / Nasdaq)
Bank of America Montgomery
Initiating coverage with a Buy rating and $29 price target.

Union Pacific Corp. (UNP / NYSE)
Bear Stearns
Initiated coverage with Attractive, price target $66. We anticipate solid earnings growth for Union Pacific in 2002 and 2003 as a result of significant cost savings opportunities and revenue growth driven by UP's targeted new products.

UTi Worldwide (UTIW / Nasdaq)
Piper Jaffray
Upgrade from Neutral to Buy. Raising estimates 2002 from 68c to 74c, 2003 from 85c to 90c and raising price target. Stronger than expected airfrieght.

Vertex Pharmaceuticals (VRTX / Nasdaq)
Bank of America Montgomery
Initiating coverage with a Buy rating and $34 price target.

Albertson's (ABS / NYSE)
Deutsche Banc Alex. Brown
We are adjusting our 2001 EPS to $1.90 due to solid third quarter results and improving same-store sales. Reiterate our Buy rating.

Albertson's (ABS / NYSE)
Lehman Bros
We are lowering our fourth quarter 2002 and full year 2003 estimates to $0.56 and $2.11. Continue to think the stock is overvalued at a 2002 calendarized PE. Maintain Market Perform rating.

Amazon.com (AMZN / Nasdaq)
Piper Jaffray
Raising 4Q EPS. Expect $13 Million operating profits. Well positioned for growth beyond 2002. Reiterate Buy.

Ariba (ARBA / Nasdaq)
NEWS
Announced it has appointed Jim Frankola to Executive Vice President and Chief Financial Officer. Mr Frankola brings over 10 years of financial management experience, from IBM and most recently from Avery Dennison.

AutoZone (AZO / NYSE)
Credit Suisse First Boston
We are raising our full-year estimate to $3.20 and a $95 price target. AutoZone reported blowout first quarter results with EPS of $0.76. We see sales and margain momentum continuing at least through the secong quarter and most likely until the fourth quarter.

AutoZone (AZO / NYSE)
NEWS
Reported first quarter earnings of 76c/share, well above the Street forecast of 60c/share, and a 65 percent improvement from the 46c/share reported in the same a year ago.

Chiron Corporation (CHIR / Nasdaq)
Robertson Stephens
Issues may delay FDA approval of product by 1-2 quarters. Lowering 2002 EPS by 3c to $1.10. Reiterate Market Perform and $46 target.

Cisco Systems (CSCO / Nasdaq)
Smith Barney Shearson
Upbeat analyst meeting. Little specific guidance. Body language suggests CSCO will meet or exceed estimates. Target $25.

Cisco Systems (CSCO / Nasdaq)
JP Morgan Chase & Co.
Update from analyst conference - mood is generally very bullish (orders tracking to ests in Nov.), will make the quarter or slightly ahead, new prods-announced 2 series of new switches, and co is committed to carrier market. Would continue to recommend buying on dips.

Emulex Corporation (EMLX / Nasdaq)
JP Morgan Chase & Co.
Raising price target from $22 to $35 after positive analyst meeting. Co was upbeat and said earnings on track and backlog building for MarQ. Expect EMLX to be company to beat in SAN market for host connectivity to stor networks.

Emulex Corporation (EMLX / Nasdaq)
Smith Barney Shearson
Reiterated neutral; upbeat meeting. Quarter tracking well. Low visibility into March quarter. Maintains goal of 52% gross margins. Raising target from $21 to $33

Fifth Third Bancorp (FITB / Nasdaq)
Morgan Stanley Co.
Trimmed fourth quarter EPS to $0.66 reflecting data in FITB's 8-k filing. Credit costs should be a bit higher than expected, but should be largely offset by net interest margin expansion. Maintain Outperform rating.

Sprint FON Group (FON / NYSE)
Lehman Bros
Reducing our 2002 EPS estimates to $1.40, driven by a reduction in EBITDA by $125m.

Ford Motor Company (F / NYSE)
Goldman Sachs
Major Restructuring could save $4 billion. Would bring stock to "normal" which is already relfected in the price.

Great Atlantic & Pacific (GAP / NYSE)
Lehman Bros
We are raising our price target to $32 and 2003 EPS estimate to $1.26, in part to reflect the benefits to A&P from its decision to close 39 relatively new, but poor performing, stores. Maintain strong buy.

General Electric Company (GE / NYSE)
Goldman Sachs
Lowering 2002 EPS by 5c to $1.55 to reflect a reduced contribution from pension income. Reiterate Recommended List.

Harrah's Entertainment (HET / NYSE)
Morgan Stanley Co.
Increased price target to $38 and 2002 EPS estimates to $2.11. We like HET's georgraphic diversification and its track record of creating same-store growth.

Hewlett-Packard Company (HWP / NYSE)
Goldman Sachs
Server Blade launch. Positively surprised with solutions completeness, capability and roadmap. 3-6 month competitive lead. Reiterate Buy and $25 target.

Intel Corporation (INTC / Nasdaq)
NEWS
Will provide a mid-quarter business update tomorrow at 5:30 PM.

Invitrogen Corporation (IVGN / Nasdaq)
Piper Jaffray
Strong growth outlook for 02. EPS forecast of $2.06 beats our $2.02. Raising target to $82.

Coca-Cola Company (KO / NYSE)
Goldman Sachs
Could trade up $1-$3 today. Taking steps to raise returns and steady growth. Increasing 2002 EPS by 10c to 30c. 2002 EBITDA down modestly

LSI Logic Corporation (LSI / NYSE)
NEWS
Stock split, 3-2 today.

Masco Corporation (MAS / NYSE)
Credit Suisse First Boston
Raising 2002 EPS estimates to $1.40 with a price target of $28 due to improving business conditions. We believe current prices represent an attractive entry point making Masco out top pick.

Markel Corporation (MKL / NYSE)
Goldman Sachs
Raising 2001 EPS estimates from -$9.15 to -$8.85. Target $220. Reiterate Recommended List.

Maytag Corporation (MYG / NYSE)
NEWS
Announced that orders for washers and dryers have been virtually eliminated over the past several months. The co. will lower production levels at its laundry products plant, resulting in the layoff of approximately 200 people.

National Semiconductor (NSM / NYSE)
Lehman Bros
Lowered third quarter revenue estimates from 3% growth to down 5%. Continue to believe that NSM did not build sufficient backlog for revenue growth. Furhermore, weak macro environment could delay a full recovery into next year. Maintain market perform.

Oracle Corporation (ORCL / Nasdaq)
NEWS
Co-Founder and Chief Executive Larry Ellison reportedly told attendees at the company's annual technology conference that business has stabilized.

Oracle Corporation (ORCL / Nasdaq)
Prudential Securities
Reiterated hold; still cautious given the decelerating growth rates and current valuation but believe the company's product cycle could initiate a reversal of course as economy improves.

Sprint PCS Group (PCS / NYSE)
Bank of America Montgomery
Widening our loss estimates, to meet the company's updated guidance. We now expect the company to lose $0.47 per share in 2002. Maintain Buy rating.

Sun Microsystems (SUNW / Nasdaq)
NEWS
Will hold its mid-quarter update in a conference call tomorrow.

Sun Microsystems (SUNW / Nasdaq)
Goldman Sachs
Recent visit suggests business improvement. UltraSparc III now outnumbering UltraSparc II shipments. High interest in Starcat product likely to translate into solid orders.

Sun Microsystems (SUNW / Nasdaq)
ABN Amro
We do not expect them to provide any formal guidance for the quarter at their mid-quarter update call, but the company will likely state that it expects sequential revenue and EPS growth over the prior quarter, in line with typical seasonality.

Symantec Corporation (SYMC / Nasdaq)
Prudential Securities
Raising target price from $60 To $85; company can comfortably make estimates this quarter. Strong cash flow and reserves - acquisition(s) likely. Raising revenue estimates for FY03 from $1.13 billion to $1.16 billion; reit Buy.

Bear Stearns (Sentiment)
Bullish sentiment creeps up: SPX 69%, NDX 71%, 5 day moving average 55 and 54%. NDX trying to get through 200 day moving average at 1650 (cash). Equity p/c .62, SPX pc/ upto 1.67.

Smith Barney Shearson (steel)
Upgrading STLD, X and AKS from Neutral to Buy, NUE from Neutral to Outperform based on supply and demand and better labor and govt environment. Likely Steel price bottom.

Deutsche Banc Alex. Brown (Semiconductor)
We believe that this implied slop of recovery is much too bullish and continue to maintain our view that equipment revenue is likely to decline.

ABN Amro (Natural Gas Price)
Lowering our 2002 natural gas price forecast from $2.75/mcf to$2.50/mcf, as well as our 4Q01 estimate from $2.50/mcf to $2.25/mcf. Reflecting the lower gas price forecasts, we have revised our 4Q01 and 2002 earnings and cash flow estimates and reduced selective price targets.

8:00 a.m. Mortgage Bankers Association Purchase Applications Index.

10:00 a.m. The National Association of Purchasing Managers releases its Non-Manufacturing Survey

10:00 a.m. November Challenger Layoff Total. This measure of labor market conditions remained depressed, in October with the number reported of jobs lost totaling 242,192 to down slightly from 248,000 in September.

Credit Suisse First Boston Annual Media Week

UBS Warburg 29th Media Week Conference

Salomon Smith Barney Chemical Conference

Lehman Brothers 3rd Annual T3 Telecom, Trends, and Technology Conference

Salomon Smith Barney Storage Area Networks Conference

UNH hosting analysts and investors meeting.

BRL Analyst meeting, New York

WPI Analyst Meeting

CSCO Analyst meeting

ARBA analyst meeting

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