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

Author:
Publish date:

Updated from 8:34 a.m. EST

Second Edition

Image placeholder title

NOTE: TheStreet Notes currently is being offered for FREE to all users of TheStreet.com on a trial basis and for a limited period of time only. We expect to make this a premium service in the future. In the meantime, we welcome your comments at feedback@thestreet.com

.

Image placeholder title

Click Here

for the legal disclaimer.


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

Image placeholder title


Airborne (ABF / NYSE)
Morgan Stanley Co.
Downgraded from Strong Buy to Outerperform with a $35 price target. ABF has rallied to a point where a Strong Buy rating is not justified.

Image placeholder title
Image placeholder title

ADVO (AD / NYSE)
JP Morgan Chase & Co.
Downgrading from long term buy to market perform. We think more problems with trying to put through price increase in 2H02 due to USPS expected price increase

Image placeholder title

Aetna (AET / NYSE)
Lehman Bros
Upgrading from Market Perform to Strong Buy, with a $45 price target. We believe the company will show meaningful signs of operating improvement this year, even if its peers struggle.

Image placeholder title

Alcatel (ALA / NYSE)
JP Morgan Chase & Co.
Downgrading from market perform to market underperform, we estimate fair value $9.79-$11.57 as margins are too low and working cap too high to generate sustainable FCF and economic returns once revenue growth picks up.

Image placeholder title

AmSurg Corp. (AMSG / Nasdaq)
Piper Jaffray
Initiating coverage with Outperform rating and $31 target. Largest owner/operator of practice-based surgery centers in the United States.

Image placeholder title

Burlington Nrth./Santa Fe (BNI / NYSE)
Morgan Stanley Co.
Downgraded from Outperform to Neutral where post-recession price targets have been met.

Image placeholder title

Canadian National Railway (CNI / NYSE)
Morgan Stanley Co.
Downgraded from Outperform to Neutral where post-recession price targets have been met.

Image placeholder title

Rockwell Collins (COL / NYSE)
Goldman Sachs
Initiating coverage on Recommended List. Sustained upturn in defense spending. Expect price to appreciate 60-80%.

Image placeholder title

Canadian Pacific Limited (CP / NYSE)
Morgan Stanley Co.
Downgraded from Outperform to Neutral where post-recession price targets have been met.

Image placeholder title

Documentum (DCTM / Nasdaq)
Goldman Sachs
Initiating coverage as Outperformer. Leading vendor of enterprise class content management infrastructure and applications.

Image placeholder title

LM Ericsson Telephone Co. (ERICY / Nasdaq)
JP Morgan Chase & Co.
Downgrading from market perform to market underperform. Price Target $4.50. Cost cuts will likely take a long time to implement, we see no positive catalysts, and think stock will underperform market.

Image placeholder title

Ensco International (ESV / NYSE)
Bank of America Montgomery
Upgrading from Buy to Strong Buy, with a $33 price target. Day-rates in the Gulf of Mexico appear to be bottoming out, which we believe confirms our above-consensus earnings estimates.

Image placeholder title

Federated Department Str. (FD / NYSE)
JP Morgan Chase & Co.
Upgrading to long term buy from market perform. Leader in a tough industry; valuation still looks compelling; target price $48 is 12x '03 estimate of $4.03

Image placeholder title

Genesco (GCO / NYSE)
Bank of America Montgomery
Upgrading from Buy to Strong Buy, with a $27 price target. We believe mall traffic has been steadily improving, especially at footwear stores. The stock is relatively inexpensive, and could run when it reports 2002 results against easy comparisons.

Image placeholder title

Gilead Sciences (GILD / Nasdaq)
Goldman Sachs
Upgrading to Recommended List based on recent price weakness and strong fundamental growth prospects for 2002. Target $75-$80. Key growth driver will be sales of Viread. Strong sales prospects, a solid pipeline and nearing profitability.

Image placeholder title

Gap (GPS / NYSE)
Piper Jaffray
Downgrading from Neutral to Underperform. Expecting same store sales decline of 15-20%. Low visibility for recovery. Reducing 4Q from -8c to -11c and 2002 EPS from 63c to 34c. Lowering target from $13 to $9.

Image placeholder title

Harrah's Entertainment (HET / NYSE)
Prudential Securities
Initiating coverage with a Buy rating and $50 price target. We see a bullish 5-year outlook with a difficult environment for destination jurisdictions over the next year.

Image placeholder title

Harrah's Entertainment (HET / NYSE)
ABN Amro
Raising price target from $41 to $46 and our 4Q01 EPS estimate from $0.34 to $0.38 to account for better than previously expected results at their Atlantic City and Illinois properties. Increasing 2002 EPS estimate from $2.10 to $2.28

Image placeholder title

Harte-Hanks (HHS / NYSE)
JP Morgan Chase & Co.
Upgrading from long term buy to Buy, raising price target from $27 top $30 as we think company has upside leverage to a tech improvement.

Image placeholder title

International Game Tech. (IGT / NYSE)
Prudential Securities
Initiating coverage with a Buy rating and an $86 target.IGT is the number one player in an industry with compelling trends.

Image placeholder title

Interwoven (IWOV / Nasdaq)
Goldman Sachs
Initiating coverage as Outperformer. Leading provider of web content management solutions. Forecasting year-over-year revenue growth of roughly 28%.

Image placeholder title

Masco Corporation (MAS / NYSE)
Salomon Smith Barney
Upgrade from Outperform to Buy End-market demand should be stronger than anticipated. Solid progress increasing its installed sales. Raising target from $30 to $32 and 2002 EPS from $1.35 to $1.45.

Image placeholder title

MGM Mirage (MGG / NYSE)
Prudential Securities
Initiating coverage with a Hold rating and a $33 price target.Current valuation represents largest hurdle. Positive ROIC implies company continues to create value.

Image placeholder title

Micron Technology (MU / NYSE)
Warburg Dillon Read
Initiating coverage with a Buy rating and $45 price target. We believe the company will be the market share leader in memory chips through at least 2003, and that the improving PC market should help stabilize DRAM prices by mid-2002.

Image placeholder title

Nokia Corporation (NOK / NYSE)
JP Morgan Chase & Co.
Downgrading from Buy to market perform, because company could do well this Q but we expect soft Q2 guidance because Xmas season was not as good as expected and infrastructure is not likely to rally.

Image placeholder title

Newpark Resources (NR / NYSE)
Salomon Smith Barney
Downgrading from Outperform to Neutral. During 4Q has deteriorated faster than expected. Drilling fluids results appear to be holding up fairly well. Lowering 4Q EPS to $0.05 from $0.09 and 2002 EPS to $0.15 from $0.20. Target $8.

Image placeholder title

Oracle Corporation (ORCL / Nasdaq)
NEWS
CFO Jeff Henley said that the company is maintaining guidance provided in December, and that it is optimistic about 2002, at the Morgan Stanley Internet Software and Networking Conference.

Image placeholder title

Oracle Corporation (ORCL / Nasdaq)
Weisel Partners
Upgrading from market perform to buy on more attractive risk-reward; Activity levels trending positively; Well-positioned to take advantage of current environment.

Image placeholder title

Park Place Entertainment (PPE / NYSE)
Prudential Securities
Initiating coverage with a Buy rating and $13 price target.The company has an enviable portfolio of assets and brands.Valuation to growth proposition is attractive in our view.

Image placeholder title

Prudential Financial(PRU / NYSE)
Salomon Smith Barney
Initiating coverage with Buy rating and $38 target. Benefiting from reorganization, cost cutting and firmer capital markets.

Image placeholder title

Rational Software Corp. (RATL / Nasdaq)
SG Cowen
Upgrading from Buy to Strong Buy, as we believe the company is positioned to benefit from MSFT's .net strategy.

Image placeholder title

Rowan Companies (RDC / NYSE)
Bank of America Montgomery
Upgrading from Market Performer to Buy, with a $25 price target. We believe drilling rates are bottoming out, and that the company will now be able to make a profit in fiscal 2002.

Image placeholder title

Royal Dutch Petroleum Co. (RD / NYSE)
Deutsche Banc Alex Brown
Upgrading from Underperform to Market Perform, based on valuation.

Image placeholder title

Tektronix (TEK / NYSE)
Morgan Stanley Co.
Initiating coverage with a Neutral due to valuation. Management could generate incremental sources of shareholder value from cash reinvestment.

Image placeholder title

United Defense Industries(UDI / NYSE)
Goldman Sachs
Initiating coverage on Recommended List. Well managed. Prime contractor with programs that will benefit from modernization requirements and are integral to the US Dept. of Defense and foreign governments.

Image placeholder title

Union Pacific Corp. (UNP / NYSE)
Morgan Stanley Co.
Downgraded from Outperform to Neutral where post-recession price targets have been met.

Image placeholder title

Vignette Corporation (VIGN / Nasdaq)
Goldman Sachs
Initiating coverage as Neutral. Provider of content management infrastructure and content rich applications.

Image placeholder title

Wal-Mart Stores (WMT / NYSE)
JP Morgan Chase & Co.
Downgrading to long term buy from buy on valuation. Still a core holding, $58 Price Target

Image placeholder title

Western Wireless Corp. (WWCA / Nasdaq)
Deutsche Banc Alex Brown
Lowering estimates and price target to $53 per share, after the company's disappointing fourth quarter pre-announcement. Maintain Strong Buy rating, as we believe the company's problems are transitory.

Image placeholder title

Western Wireless Corp. (WWCA / Nasdaq)
Salomon Smith Barney
Downgrading from Buy to Outperform. Prereleased disappointing 4Q results. Lowering target to $24 from $35. Needs another qtr or two to get back to full strength.

Image placeholder title

back to top

Image placeholder title


Alcoa (AA / NYSE)
Deutsche Banc Alex Brown
We believe the stock is expensive, given the company's cloudy near-term outlook. Maintain Market Perform rating, as we'd wait for a 20% decline in price before purchasing AA.

Image placeholder title
Image placeholder title

Alcoa (AA / NYSE)
Morgan Stanley Co.
Reduced 2002 EPS estimate to $1.50 due to assumption that business continue to be hurt by margin pressure.

Image placeholder title

Alcoa (AA / NYSE)
Warburg Dillon Read
Reduced 2002 EPS estimates to $1.58 to reflect the continuing challenging economic environment projected for the first half of 2002, along with additional charges related to the Warrick restart.

Image placeholder title

Anadigics (ANAD / Nasdaq)
Credit Suisse First Boston
Lowered 2002 revenue and EPS estimates to 77.9m and $(1.40) given the continued lack of visibility into consumption, the uncertainty surrounding pricing, inventory levels and utilization levels. Maintain Hold rating.

Image placeholder title

Abercrombie & Fitch Co. (ANF / NYSE)
Piper Jaffray
Lowering 2002 EPS from $1.97 to $1.86 and raising target from $32 to $37. Expected to meet or beat 4Q estimates.

Image placeholder title

AptarGroup (ATR / NYSE)
Deutsche Banc Alex Brown
Lowering our 2002 earnings estimate to $2.04 per share, following the company's warning. Maintain Market Perform rating, going into this morning's conference call.

Image placeholder title

Avid Technology (AVID / Nasdaq)
Piper Jaffray
Raising target from $15 to $18. Fundamentals stabilizing. Visibility improving. Usually trades up going into an upgrade cycle.

Image placeholder title

Anheuser-Busch Companies (BUD / NYSE)
Deutsche Banc Alex Brown
Raising 2002 EPS estimate to $2.09, because of higher volume shipments over the past two months. We also believe the company will be able to raise its prices by 2% this year. Reiterate Buy rating and $50 price target.

Image placeholder title

Anheuser-Busch Companies (BUD / NYSE)
Warburg Dillon Read
Raising 2002 and 2003 EPS estimates to $2.10 and $2.32. Also increasing price target to $46. Believe that BUD is well positioned for healthy shipments in early 2002.

Image placeholder title

Coach (COH / NYSE)
NEWS
announced that it is raising its earnings expectations for the second quarter to at least 96c/share, above previous guidance of 92c/share. Our robust holiday results reflect the strength of our product and brand, as well as the success of our cost-cutting initiatives, tight inventory management and marketing programs," stated Chairman and CEO Lew Frankfort.

Image placeholder title

Charles River Associates (CRAI / Nasdaq)
Deutsche Banc Alex Brown
Raising estimates and price target to $23 per share. We now expect the company to earn $1.05 per share in fiscal 2002, in-line with management's new guidance.

Image placeholder title

Cisco Systems (CSCO / Nasdaq)
NEWS
CEO John Chambers told attendees at a Salomon Smith Barney Entertainment Media & Telecommunications Conference that he expects to gain significant market share this year, however he sees the US market as still struggling, but is seeing signs of strength in Europe. The company also expects to make a host of acquisitions over the course of the year.

Image placeholder title

Cytec Industries (CYT / NYSE)
Lehman Bros
Cutting fourth quarter estimate to $0.16 per share, following the company's earnings warning. We believe the stock could fall back to $24-$25 today.

Image placeholder title

Citigroup (C / NYSE)
Lehman Bros
We believe the stock has traded down more than the company's risk in Argentina warrants. Reiterate Strong Buy rating and $70 price target.

Image placeholder title

Citigroup (C / NYSE)
Morgan Stanley Co.
Lowered 2002 EPS estimates to $3.32. Consumer finance business is still attractive, but growth is slowing. Maintain Outperform rating.

Image placeholder title

Dean Foods Co. (DF / NYSE)
Warburg Dillon Read
Increasing price target to $73 based on calendar 2003 EPS estimates.

Image placeholder title

Electronics For Imaging (EFII / Nasdaq)
Salomon Smith Barney
Will report 4Q01 on 1/23. Expecting in-line or slightly ahead results. Raising price target to $26 from $19.

Image placeholder title

Emmis Communications Corp (EMMS / Nasdaq)
Deutsche Banc Alex Brown
Raising 2002 cash flow estimate to $1.36 per share, to better match the company's guidance. November quarter revenue was better than we ahd expected, although high debt leverage remains a concern for EMMS. Maintain Buy rating.

Image placeholder title

FleetBoston Financial (FBF / NYSE)
Lehman Bros
We believe the situation in Argentina will cause the company to take further charges against earnings. The situation is too fluid to quantify these figures yet. Maintain Strong Buy rating.

Image placeholder title

Guidant Corporation (New) (GDT / NYSE)
JP Morgan Chase & Co.
Reiterating buy, raising price target from $55 To $65 after Health Care Conference. 4Q results likely to top our $0.46 estimate, aided by share gains in stents and ICD Market re-acceleration. Could see $10m upside to $711 estimate.

Image placeholder title

General Mills (GIS / NYSE)
Warburg Dillon Read
Raising price target to $58 as calender 2003 EPS estimates are added to model.

Image placeholder title

Gateway (GTW / NYSE)
NEWS
Ratings agency Moody's Investor Services lowered its credit ratings on GTW to "junk" status (to Baa3 from Ba1), after warning late Monday that sales would fall well below forecasts.

Image placeholder title

Intel Corporation (INTC / Nasdaq)
SG Cowen
Raising EPS estimates to $0.51 in fiscal 2001 and $0.64 for next year. We believe the company will benefit from the current surge in PC sales. Maintain Neutral rating, based on valuation.

Image placeholder title

Kraft Foods (KFT / NYSE)
Warburg Dillon Read
Increasing price target to $40 based on our calendar 2003 EPS estimates. Kraft offers the most upside to the food sector over the next 12 months.

Image placeholder title

Kellogg Company (K / NYSE)
Warburg Dillon Read
Uping price target to $32 reflecting 2003 calendar EPS estimates.

Image placeholder title

Kellogg Company (K / NYSE)
Warburg Dillon Read
Uping price target to $32 reflecting 2003 calanderized EPS estimates.

Image placeholder title

McData Corporation (MCDTA / Nasdaq)
Bank of America Montgomery
We believe the fourth quarter is tracking ahead of plan, because of high activity from OEM's like EMC. Reiterate Buy rating and $30 price target.

Image placeholder title

Medtronic (MDT / NYSE)
Bank of America Montgomery
The company should receive consent from the FDA advisory panel for its InFuse product this week, although the timing of a full approval is uncertain. We believe this could be a $100 million product by 2004. Maintain Strong Buy rating.

Image placeholder title

99 Cents Only Stores (NDN / NYSE)
Morgan Stanley Co.
Raised price target to $40 assuming shares trading at 30x 2003 EPS estimates of $1.32. Believe NDN is one of the few retailers with sustainable 20%-plus EPS growth.

Image placeholder title

Northrop Grumman Corp. (NOC / NYSE)
Deutsche Banc Alex Brown
The company is our top Aerospace/Defense pick for 2002. The entire sector should benefit from generally higher levels of Defense spending.

Image placeholder title

Openwave Systems (OPWV / Nasdaq)
Lehman Bros
Trimming fiscal 2002 estimates, after the company pre-announced softer sales for the current quarter. We now expect OPWV to earn a penny per share this year on $421 million of revenue.

Image placeholder title

Openwave Systems (OPWV / Nasdaq)
ABN Amro
Raising our 2002 EPS estimate from ($0.21) to ($0.14) and ourtarget from $6-$8 to $9-$11 due largely to cost savings we believe OPWV will achieve as part of their restructuring activities.

Image placeholder title

Qualcomm (QCOM / Nasdaq)
Morgan Stanley Co.
Decreased 2001 and 2002 EPS estimates to $1.10 and $1.55, due to recent news from Korea pressures.

Image placeholder title

RF Micro Devices (RFMD / Nasdaq)
Credit Suisse First Boston
Decreased 2002 and 2003 revenue and EPS estimates to $366.9m, $0.00 and $468.9m, $0.20, due to December inventory build's impact on the March quarter.

Image placeholder title

RF Micro Devices (RFMD / Nasdaq)
Weisel Partners
Decreasing estimates on wireless weakness; Maintain view that RFMD will continue to gain market share; Maintain Buy.

Image placeholder title

SAP AG (SAP / NYSE)
SG Cowen
Raising price target to $40 per share, as the company expects to beat our fourth quarter estimates. Reiterate Buy rating, and we'll expect the company to announce higher forward guidance on its conference call in two weeks.

Image placeholder title

Tiffany & Co. (TIF / NYSE)
Morgan Stanley Co.
Raised 2002 EPS estimates to $1.15 reflecting holiday sales. Beleive comps may return to a more muted pace and see slowdown in Japan as an emerging issue. Maintain Neutral rating.

Image placeholder title

TiVo (TIVO / Nasdaq)
Dain Rauscher
Introduced newest version of its digital video recording (DVR)product with increased capacity and functionality.

Image placeholder title

TriQuint Semiconductor (TQNT / Nasdaq)
Credit Suisse First Boston
Lowering first quarter revenue estimates to $62.8m as we believe that optical, satellite and wireless risks surface.

Image placeholder title

United Parcel Service (UPS / NYSE)
Morgan Stanley Co.
Lowered 2002 and 2003 EPS estimates to $2.05 and $2.60 as recent industry survey shows that shippers may divert considerable traffic away from UPS.

Image placeholder title

Xerox Corporation (XRX / NYSE)
Salomon Smith Barney
Reporting 1/28, expected break-even or slightly better than concensus of -1c. Reiterate Outperform. Rasing target to $10.50 from $9.

Image placeholder title

back to top

Image placeholder title


Bank of America Montgomery (Oil Drilling)
Drilling rates in the Gulf of Mexico appear to be stabilizing, and we suggest investors move to stocks will shallow-water exposure. Our top picks are GSF, ESV, and RDC.

Image placeholder title

Prudential Securities (Gaming Operators and Equipment Suppliers)
Initiating coverage of gaming operators with a Market Perform industry rating and gaming equipment suppliers with a Market Outperform industry rating. Our gaming operator coverage includesHET, PPE, AGY, MBG, MGG, and STN. Our equipment supplier coverage includes IGT and WMS.

Lehman Bros (Oil Drilling)
Reducing estimates for select companies in our universe, because of significant demand weakness during December. Land drillers have been the hardest hit, while international rig rates have been solid throughout.

Bear Stearns (Sentiment)
Sentiment unch at high levels: SPX 67%, NDX 69%, 5 day moving average 72 and 71%. Equity P/C down to .58, SPX P/C up to 2.53, a good sign. SPX didn't hold the 200 day, NDX did, more mixed signals

Deutsche Banc Alex Brown (Fiber Optics)
The valuation of optical equipment companies should face near-term pressure, as carrier spending will continue to decline in 2002. Nortel's earnings report next week will offer a hint of the prospects for the entire industry.

Deutsche Banc Alex Brown (Integrated Oil)
Upgrading our opinion on the sector from Underweight to Neutral, based on valuation. We also believe the oil producing nations have effectively averted a price war.

back to top

Image placeholder title


Oscillator: 4.4

Image placeholder title

No economic releases out today.

back to top

Image placeholder title


BBY Analyst Meeting

Image placeholder title

EXTR Financial News Update

MacWorld Conference & Expo

back to top

Image placeholder title

LEGAL DISCLAIMER:

THE INFORMATION IN THESTREET NOTES HAS BEEN COMPILED FROM A VARIETY OF SOURCES. NEITHER THESTREET.COM, REALMONEY.COM NOR ANY OF THE PROVIDERS OF THE INFORMATION MAKE ANY WARRANTIES, EXPRESS OR IMPLIED, AS TO THE RESULTS TO BE OBTAINED FROM USE OF THESTREET NOTES, WHICH IS PROVIDED "AS IS" AND WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED. TO THE FULLEST EXTENT PERMISSIBLE PURSUANT TO APPLICABLE LAW, THESTREET.COM, ITS OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES, SUPPLIERS, ADVERTISERS, AND AGENTS DISCLAIM ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, AND FITNESS FOR A PARTICULAR PURPOSE, AND ALL WARRANTIES RELATING TO THE ADEQUACY, THESTREET.COM DOES NOT WARRANT THE ACCURACY, OR COMPLETENESS OF ANY INFORMATION IN THESTREET NOTES.

IN NO EVENT SHALL THESTREET.COM BE LIABLE TO YOU OR ANYONE ELSE FOR ANY DECISION MADE OR ACTION TAKEN BY YOU IN RELIANCE ON SUCH INFORMATION OR FOR ANY CONSEQUENTIAL, SPECIAL OR SIMILAR DAMAGES. YOU AGREE THAT THE LIABILITY OF ACCURACY OR COMPLETENESS OF ANY INFORMATION ON THE SITES ARISING OUT OF ANY KIND OF LEGAL CLAIM (WHETHER IN CONTRACT, TORT OR OTHERWISE) IN ANY WAY CONNECTED WITH THESTREET NOTES OR INFORMATION THEREIN SHALL NOT EXCEED THE AMOUNT YOU PAID TO THESTREET.COM FOR USE OF THE SERVICE, IF ANY.