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

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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Adelphia Communications (ADLAC / Nasdaq)
ABN Amro
Upgrading from ADD to BUY and raising the target from $37to $40 given the combination of decreased balance sheet risk,continued solid operating momentum, a consolidating industry and an attractive valuation.

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American Home Products (AHP / NYSE)
SG Cowen
Upgrading from Buy to Strong Buy, with a $62 price target. We now expect better growth from the hemophilia market going forward.

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Alloy Online (ALOY / Nasdaq)
Dain Rauscher
Upgrading to Strong Buy-Aggressive from Buy-Aggressive.New $30 price target (up from $25) represents the strongfundamentals and potential upside. Alloy is having a great quarter, in both the merchandise and the media groups.

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Apache Corporation (APA / NYSE)
Lehman Bros
Lowering investment grade to Market Perform and price target to $46, due to overexpenditures in drilling activities and acquisitions that will prove to deliver modest production growth.

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Beazer Homes USA (BZH / NYSE)
Merrill Lynch
Initializing coverage with an intermediate term Buy and long tetm Strong Buy rating. Beazer is a growing leader of the enty level and first time move up category in the homebuilding industry. It has consistently proven its ability to enter new markets and gain market share.

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Concord Communications (CCRD / Nasdaq)
Bank of America Montgomery
Upgrading from Market Performer to Buy, with a $28 price target. We believe the company is on track to at least meet our fourth quarter expectations, and that CCRD's new products are gaining traction in the market.

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Corillian Corporation (CORI / Nasdaq)
NEWS
cautioned that revenues for the fourth quarter are expected to fall to approximately $10 million, below consensus views, resulting in a loss of 23c to 25c/share. The estimate was for a loss of 12c/share.

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Corillian Corporation (CORI / Nasdaq)
Warburg Dillon Read
Downgrading from Buy to Hold, with a $5 price target. The company warned yesterday that fourth quarter revenue would be only $10 million, as multiple customers delayed potential orders.

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Corillian Corporation (CORI / Nasdaq)
JP Morgan Chase & Co.
Downgrading from Buy to market perform after co announced that it will report Q4 results of roughly $10m/$(0.23-0.25) vs. our estimates of $16m/$(0.10).

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Dean Foods Co. (DF / NYSE)
JP Morgan Chase & Co.
Downgrading from Buy to Market perform; on valuation, reached our $68 PT, much earnings risk and lower vis but downgrade primarily value driven. Would buy around $60.

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Digital Insight Corp. (DGIN / Nasdaq)
Goldman Sachs
Downgrading to Neutral from Outperform. Valuation somewhat extended. Although excellent visibility and ontrack for profits and solid bank signings in 4Q. 2001 EPS lowered from -27c to -29c.

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Walt Disney Company (DIS / NYSE)
ABN Amro
Upgrading from HOLD to BUY and establishing a $25 targetahead of an anticipated cyclical recovery and rebound in earnings in 2003. DIS offers investors the best mix in the entertainment group of leverage to an economic turnaround and attractive valuation.

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Dow Chemical Company (DOW / NYSE)
Merrill Lynch
Upgrading from Buy to Strong Buy with a $42 price target, based on valuation. DOW is large and liquid chemical stock with good dividend of 4%.

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Dow Chemical Company (DOW / NYSE)
NEWS
The company warned that it will not meet its fourth quarter earnings estimate of 10-20 cents per share. DOW cited lower volumes in some businesses and "continued margin compression" in basic materials and plastics for the miss.

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EMC Corporation (EMC / NYSE)
Salomon Smith Barney
Upgrade to Buy from Outperform. Stock past bottom and recovering, albeit slowly. New product releases, partnership announcements and more M&A coming soon. Raised 4Q EPS from -9c to -8c. Target $20.

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Eaton Vance Corp. (EV / NYSE)
Merrill Lynch
Initializing coverage with an intermediate term Buy and long term Strong Buy rating. Price target is $44, representing 26% potential ROI. Strong manufacturing, extensive third party distribution, and scale in flagship products are driving market share gains.

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FelCor Lodging Trust (FCH / NYSE)
Bear Stearns
initiating coverage with an Attractive rating and target price of $19. The company is a hotel REIT, owning 197 full-service properties across 35 states in the U.S. and Canada.

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Gemstar-TV Guide Int'l (GMST / Nasdaq)
Robertson Stephens
Downgrade from Strong Buy to Buy based on recent share appreciation and risks surrounding ongoing ITC trial. Target $32.

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Merck & Co. (MRK / NYSE)
SG Cowen
Downgrading from Buy to Neutral, with a $64 price target. There is a lack of any foreseeable catalysts over the next 2-3 quarters.

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Patterson-UTI Energy Inc (PTEN / Nasdaq)
Salomon Smith Barney
Initiating coverage with Outperform rating and $28 target. Second largest land drilling company operating in North America. Industry leader in footag drilled.

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Smithfield Foods (SFD / NYSE)
Goldman Sachs
Initiating coverage with Outperformer rating. Sales of 6 billion, largest pork processor in the US and largest hog producer in the world. Limited near-term. Slow growth in 2003. Attractive long-term.

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Schering-Plough Corp. (SGP / NYSE)
SG Cowen
Downgrading from Buy to Hold, as the company is facing manufacturing and branding issues.

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Solutia (SOI / NYSE)
Goldman Sachs
Downgrade from Recommended List to Outperform. Uncertainty over eventual liabilities has risen because of media coverage and is unlikely to be resolved soon. Cost equal to or more than GE's $460 mn cleanup cannot be ruled out. Hit unlikely to be over $4. Attractive at $9. Target $14.

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Stanley Works (SWK / NYSE)
Goldman Sachs
Downgrade to Neutral from Outperform based on valuation and increased risks. $60 million restructure charge expected in January. Little room for error on stock price.

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Telephone & Data Systems (TDS / AMEX)
Deutsche Banc Alex Brown
Downgrading to Buy from Strong Buy as we only reserve Strong Buy investment rating for those companies that are designated as Core Wireless Holdings.

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USFreightways Corp. (USFC / Nasdaq)
J.P. Morgan Chase & Co.
Initiating with a Buy, Price target $49. Regional carrier poised for expansion. We expect revenue and operating income to increase at 10% and 15% respective compound rates over the next 5 years.

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Alliance Capital Mgt Hldg (AC / NYSE)
Warburg Dillon Read
Raising estimates and price target to $54 per share. We now expect the company to earn $3.03 in fiscal 2002.

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Advent Software (ADVS / Nasdaq)
Goldman Sachs
Announced 1/1 acquisition of Kinexus for roughly $68.5 milion in cash and warrants. Strategic good fit. New sell-through opportunities. Raising 2002 EPS from $1.10 to $1.20.

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AOL Time Warner (AOL / NYSE)
Deutsche Banc Alex Brown
Adjusting downward 2002 EBITDA to $10.66b, due to a slower than expected growth in online advertising, publishing, and music. Still expect AOL to have a strong performance in a difficult environment, maintain Strong Buy and $41 price target.

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AOL Time Warner (AOL / NYSE)
Warburg Dillon Read
Cutting 2002 EBITDA estimate to $1.23 per share, to reflect dilution from the Bertelsman put and the consolidation AOL Europe. We believe AOL will primarily use internally generated cash to meet this liability. Maintain Strong Buy rating and $41 price target.

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Bank of New York Co. (BK / NYSE)
Dain Rauscher
signed a definitive agreement to acquire Autranet, anagency brokerage subsidiary of Credit Suisse First Boston.This acquisition positions the Bank of New York as one of the more substantial agency brokerage firms.

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Burlington Nrth./Santa Fe (BNI / NYSE)
Morgan Stanley Co.
Raising fourth quarter earnings estimate to $0.58 per share, because of higher rail traffic and falling fuel prices. Reiterate Outperform rating.

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Bassett Furniture Ind. (BSET / Nasdaq)
NEWS
announced sales for the fourth quarter were $78 million, up approximately 9% from third quarter levels. Net earnings for the quarter, before restructuring and one-time items, are expected to be in line with the second and third quarters of 2001.

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Anheuser-Busch Companies (BUD / NYSE)
ABN Amro
Raising price target to $54 from $52 and believe BUD offersdefensiveness and will outperform North America's beverage stocks in 2002.

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Cisco Systems (CSCO / Nasdaq)
Morgan Stanley Co.
We believe the company is gaining significant market share in Europe, where over 60% of networking resellers expect positive growth in 2002.

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Emulex Corporation (EMLX / Nasdaq)
Dain Rauscher
raising price target to $45 from $40 given expectations for increased market share and a 12-month view. Near-term visibility is improving; backlog is starting to build for the March quarter.Enterprise storage volume trends at IBM and EMC appear strong.

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Home Depot (HD / NYSE)
Merrill Lynch
We believe the stock will sharply outperform its peers this year, as the company generates superior return on its inventory.

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WebMD Corporation (HLTH / Nasdaq)
SG Cowen
The company is our top pick for 2002, becuase of its positioning for growth and newly-found profitability. Reiterate Strong Buy rating and $13 price target.

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Intel Corporation (INTC / Nasdaq)
JP Morgan Chase & Co.
Reit buy ahead of Q4 earning's release wk of 1/14. We est Q4 $0.10, street at $0.11. A number of data points from PC and motherboard manufacturers suggest Dec PC sell-through had been strong. According to our sources, suppliers to DELL, CPQ, IBM, NEC, SONY all received rushed orders late in Dec, in both desktop and mobile.

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Investment Technology Grp (ITG / NYSE)
Morgan Stanley Co.
Trimming fiscal 2002 estimate to $1.93 per share, because of lower POSIT volumes.

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i2 Technologies (ITWO / Nasdaq)
Salomon Smith Barney
Assuming coverage with Neutral rating and lowered risk rating. Raising target from $3.50 to $8. Raising EPS for 2001 1c to -33c and 2002 from -25c to -20c.

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Kmart Corp. (KM / NYSE)
Morgan Stanley Co.
Lowering estimates through fiscal 2003, because of weaker apparel sales. We now expect the company to lose $0.05 per share this year and earn a profit of $0.25 for next year.

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L-3 Communications Hldgs. (LLL / NYSE)
Salomon Smith Barney
Buying PerkinElmer baggage detection business for $100 million. Compliments existing line. Reiterate Buy and $112 target.

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Merrill Lynch & Co. (MER / NYSE)
Credit Suisse First Boston
Lowering fourth quarter EPS estimates to $0.46, meanwhile increasing price target to $57, based on our 80% 2002 relativemarket multiple valuation methodology.

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Merrill Lynch & Co. (MER / NYSE)
Morgan Stanley Co.
Cutting our fourth quarter EPS estimate to $0.48, because of weaker results in the market-making business. Maintain Outperform rating.

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Norfolk Southern Corp. (NSC / NYSE)
Warburg Dillon Read
Raising our fourth quarter estimate to $0.24 per share, to reflect a rebound in industry fundamentals. Maintain Neutral rating.

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Novellus Systems (NVLS / Nasdaq)
Lehman Bros
Raising fourth quarter EPS estimate to $0.11, in-line with both company guidance and Street consensus.

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OSI Systems (OSIS / Nasdaq)
NEWS
announced that it has a Letter of Intent with L-3 Communications to purchase certain assets that will be acquired by L-3 from PKI as part of its purchase of PerkinElmer's Detection Systems business.

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PacifiCare Health Systems (PHSY / Nasdaq)
NEWS
announced a profit improvement program that is expected to produce annualized cost savings of approximately $80 million to $90 million. The company plans to implement the plan through consolidation of company operations. The program, however, will result in a pre-tax charge of approximately $60 million. For 2002, the company expects to post earnings of $3.55 to $3.65/share, roughly in-line with forecasts.

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PacifiCare Health Systems (PHSY / Nasdaq)
Bear Stearns
lowering 2002 EPS by $0.15 to $1.95, reflecting our anticipation of somewhat more modest improvements in the medical cost ratio. We still believe poor earnings visibility for 2002 remains a significant issue and maintain cautious outlook.

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Peregrine Systems (PRGN / Nasdaq)
NEWS
announced it anticipates total revenues for the third quarter to be approximately $175 million, including license revenues of approximately $75 million, resulting in a loss of 7c to 8c/share.

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QLogic Corporation (QLGC / Nasdaq)
Dain Rauscher
revenue should grow sequentially as enterprise drive trendsshould rebound sharply. QLogic is a core holding in the storage networking arena and reiterate our Strong Buy-Aggressive rating and $50 price target.

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Sonic Corporation (SONC / Nasdaq)
Robertson Stephens
Reported 1Q02 of 34c, in-line with consensus and previous guidance. Raising 2002 EPS by 1c to $1.63. Target $35. Analyst meeting tomorrow.

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Sonic Corporation (SONC / Nasdaq)
Bank of America Montgomery
Raising price target to $41 per share.

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Stilwell Financial (SV / NYSE)
Warburg Dillon Read
Raising estimates and price target to $31 per share, as we expect the company to attract more retail assets in the coming year. We now expect SV to earn $1.86 in 2002.

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Sierra Wireless (SWIR / Nasdaq)
Lehman Bros
Lowered fourth quarter and 2002 EPS estimates to $(0.30) and $(0.53), in light of SWIR's preannounced fourth quarter results on new product delays and soft end markets. Maintain Buy, as limited visibility persists.

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Tenet Healthcare Corp. (THC / NYSE)
Merrill Lynch
Reiterate Strong Buy rating, ahead of the company's earnings report on Friday. We expect the company to beat the consensus estimate and raise its forward EPS guidance.

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Tenet Healthcare Corp. (THC / NYSE)
ABN Amro
Reiterating BUY rating and $74 target. Reporting 2Q02 on January 4, and expect it to be strong, exceeding both the consensus and our expectations of $0.70 per share, as management pre-announced that the quarter would exceed then consensus estimates of $0.69 on 11/14/01.

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Toys R Us (TOY / NYSE)
Merrill Lynch
We may re-evaluate our Buy rating if the company does not improve its inventory management in the post-holiday season.

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T. Rowe Price Group (TROW / Nasdaq)
Warburg Dillon Read
Raising EPS estimates to $1.52 in 2001 and $1.81 for next year. We are also increasing our price target to $35.

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Union Pacific Corp. (UNP / NYSE)
Morgan Stanley Co.
Raising fourth quarter EPS estimate to $0.96, because of improving railcar traffic. Maintain Outperform rating.

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Credit Suisse First Boston (Brokerage Industry)
Backlogs dip further, in both underwriting and M&A as the fourth quarter proved to show weak trends. Expect sequential improvements for first and second quarter of 2002. Estimate the group to outperm on a 12-18 months basis. Top picks remain Citigroup, Goldman Sachs, and Morgan Stanley.

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Credit Suisse First Boston (Hardline Retail)
Much of the earnings growth in 2001 was driven by oligopoly pricing and expense rationalization. This should continue into 2002, with a strong economic recovery not required or factored into retail estimates. Companies with the lowest valuations are best positioned for 2002. These include: Best Buy, Circuit City and Home Depot.

Merrill Lynch (Integrated Oil)
Reducing our 2002 crude oil price target to $19 per barrel. This will impact the earning ability of the oil refiners, but we maintain Strong Buy ratings on BP, P and XOM.

Bear Stearns (Sentiment)
SPX PUT/CALL ticks up near historic highs at 3.37, the 10 day moving average is 2.29 which would be a big daily number. Equity P/C in the middle at .66. Bullish sentiment very flat for days: SPX 65%, NDX 63%.

FIBER-OPTICS (msco)
We do not believe the hype that the metro market can revitalize optical networking stocks. Most investors incorrectly view this opportunity as a nascent business.

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Oscillator: 4.2

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8:30 a.m. Initial Jobless Claims (week of Dec 29) 392k

10:00 a.m. Construction Spending (Nov) 0.3%

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Nothing For Today
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