TheStreet Notes: A Daily Briefing on 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)
Morgan Stanley Co.
Upgrading from Outperform to Strong Buy, with a $40 price target. We believe the company's fundamentals are improving, which should allow ADLAC, to retire some of its debt.

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Automatic Data Processing (ADP / NYSE)
Robertson Stephens
Raising rating to Buy to reflect worst period of declining payrolls is behind it and impressive cost control initiatives. Downside risk limited. Target $63. F2002E EPS: $1.77, up from $1.69. F2003E EPS: $2.00, up from $1.88.

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Abercrombie & Fitch Co. (ANF / NYSE)
Morgan Stanley Co.
Upgrading from Outperform to Strong Buy, with a $30 price target. We believe all of the bad news is already priced into the stock, and any hint of upside could send the shares higher.

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

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Cadence Design Systems (CDN / NYSE)
Morgan Stanley Co.
Downgrading from Outperform to Neutral, based on valuation.

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Mack-Cali Realty Corp. (CLI / NYSE)
Morgan Stanley Co.
Downgrading from Outperform to Neutral.

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DoubleClick (DCLK / Nasdaq)
ABN Amro
Upgrading from ADD to BUY and raising our target from lowdouble digits to mid-teens as we have become increasingly confident that management has made the decision to exit the struggling and money-losing media business.

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Walt Disney Company (DIS / NYSE)
Deutsche Banc Alex Brown
Upgrading from Market Perform to Buy, with a $25 price target.

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Enron Corp. (ENE / NYSE)
Prudential Securities
Upgrading to Hold from Sell based on proposed merger with DYN, deal valued at $10.40/sh, but financial uncertainties still exist.

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Electronic Arts (ERTS / Nasdaq)
Merrill Lynch
Initiating coverage with a near-term Accumulate and long-term Buy rating.

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Four Seasons Hotel (FS / NYSE)
Morgan Stanley Co.
Downgrading from Outperform to Neutral. We believe the company's high-end properties are at the most risk of facing lower demand.

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Four Seasons Hotel (FS / NYSE)
ABN Amro
Downgrading FS from HOLD to REDUCE and lowering our 2001 EPSestimate from $1.44 to $1.35 and 2002 from $1.32 to $0.60 as asignificant portion of planned unit expansion for 2002 was pushed back into 2003, continuing a trend we saw in 2Q01.

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General Mills (GIS / NYSE)
Lehman Bros
We would buy the stock on any weakness. Raising price target to $52 per share, despite dillution from the Pillsbury deal.

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General Mills (GIS / NYSE)
Morgan Stanley Co.
Raising price target to $55 per share. The company's new long-term EPS expectations are in-line with our previous models.

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General Mills (GIS / NYSE)
Bank of America Montgomery
Cutting EPS estimates to $2.20 this year and $2.90 in 2002, to reflect new guidance for the Pillsbury merger. Maintain Strong Buy rating because of the long-term operating synergies that are possible.

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General Mills (GIS / NYSE)
Bear Stearns
remain netural on stock, warming up to the story.

General Mills (GIS / NYSE)
Piper Jaffray
Upgrade to Strong Buy from Buy. Introducing Our FY03 Estimate Of $2.90. Adjusting FY02 Cash EPS Estimate From $2.38 To $2.17.

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Aquila (ILA / NYSE)
Smith Barney Shearson
Downgrade to Outperform from Buy following the announcement (Nov. 7) by parent UtiliCorp they would buy back all outstanding Aquila shares. We adjust our target price to $24. Slower growing utility earnings. We project 12%-15% growth vs. 20-25% for stand-alone Aquila.

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Ingram Micro (IM / NYSE)
Weisel Partners
Upgrading from Market Perform to Attractive; Well-positioned forupturn, in our view.

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Interpublic Group of Cos. (IPG / NYSE)
ABN Amro
Downgrading from ADD to HOLD given 1) our concerns regarding near-term performance as the advertising downturn intensifies, 2) the company continues to work through its restructuring, and 3) the solid share price performance over the last few weeks.

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Alliant Energy Corp. (LNT / NYSE)
Bank of America Montgomery
Initiating coverage with a Buy rating and $32 price target. Including a 6% dividend, this utility could return 20% over the next year.

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Metro One Telecommunic. (MTON / Nasdaq)
Dain Rauscher
Upgrading to Buy-Aggressive from Neutral and establishing a $40 price target. Recently visited Metro One executives at their Beaverton, Oregon, headquarters. We believe business trends remain solid, and we expect the company to post greater than 30% growth during 2002.

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NewPower Holdings (NPW / NYSE)
Smith Barney Shearson
Downgrade to Neutral from Buy following 3Q EPS of $(1.15) vs. $(2.96), slightly ahead of our and consensus estimates of $(1.16). Target $1 (was $15). KEY CONCERN: Cash "burn" rate has grown, to $90 million per qtr vs. current cash position of $341 million. NPW likely to need outside financing by mid-2002.

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Phelps Dodge Corp. (PD / NYSE)
Morgan Stanley Co.
Upgrading from Underperform to Neutral, with a $22 price target. We believe copper prices have bottomed in the near-term, because of lower market supply.

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Plexus Corp. (PLXS / Nasdaq)
Weisel Partners
Upgrading from Mkt Perform to Attractive; Best positioned companyin mid-tier, in our view; Strong balance sheet & likely beneficiary of peers' liquidity problems.

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PeopleSoft Incorporated (PSFT / Nasdaq)
Weisel Partners
Initiate with Attractive; Solid momentum but tough comps ahead.

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Stone Energy Corporation (SGY / NYSE)
Merrill Lynch
Lowering near-term rating from Buy to Accumulate.

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THQ Incorporated (THQI / Nasdaq)
Merrill Lynch
Initiating coverage with a near-term Accumulate and long-term Buy rating.

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Applied Materials (AMAT / Nasdaq)
Morgan Stanley Co.
We believe the company will meet or beat estimates on Wednesday. Raising price target to $50 per share, as the next bookings cycle should start in early 2002.

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Applied Materials (AMAT / Nasdaq)
SG Cowen
We believe that reported bookings will be sequentially higher, suggesting a bottoming of orders.

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AOL Time Warner (AOL / NYSE)
JP Morgan Chase & Co.
Conference Takeaways: We reit Buy on AOL as we think Internet advertising has reached a bottom, and we should start to see a recovery as we move into 1H02.

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Berkshire Hathaway (BRK.A / NYSE)
Morgan Stanley Co.
Raising estimates, following Warren Buffet's third quarter comments. Maintain Strong Buy rating, as we believe the shares are worth $96,000.

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Check Point Software Tech (CHKP / Nasdaq)
Weisel Partners
Channel checks reveal renewed interest in security; Continue tobelieve CHKP one of best-positioned in firewall/VPN; Reiterate Buy.

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Coach (COH / NYSE)
Goldman Sachs
CEO indicated business remains on track, and in non-tourist locations is back at pre 9/11 levels. Coach is well positioned for Christmas 2001 with a strong focus on giftables. The Duffle Sac, a key Holiday program, has launched very well. Change of CFO on Friday does not signals a negative turn of events at Coach in any way.

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Campbell Soup Company (CPB / NYSE)
Lehman Bros
We believe investors should take profits in CPB now. Maintain Market Perform rating and $26 price target.

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ChevronTexaco(CVX / NYSE)
Goldman Sachs
Favorable view of bold decision to invest up to $4 billion in Dynegy. Merger would give CVX a 26% ownership interest in what would be the undisputed gas and power leader, possibly catapulting it ahead of the other Super Majors in this important business. Downside risk to CVX limited.

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ChevronTexaco(CVX / NYSE)
NEWS
CVX owns approximately 26 percent of DYN's outstanding common stock, has agreed to invest a total of $2.5 billion into Dynegy. The deal is also expected to be "strongly accretive to Dynegy's earnings in the first year and thereafter."

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Dell Computer Corporation (DELL / Nasdaq)
Robertson Stephens
Executing well in the current weak demand environment while exploiting turmoil created by the H-P-Compaq merger, we remain cautious given the IT spending environment, seasonally weaker public spending, and weakening international geographies. Expect flat revenue in FQ4. Maintaining Market Perform and raising target from $21 to $26 and 2002 EPS to $0.63 from $0.61.

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Dynegy (DYN / NYSE)
Bank of America Montgomery
We believe the terms of the Enron purchase will be very accretive to earnings. We believe the combined company could earn a pro-forma $4.10 per share in 2002, and the stock could reach $55.

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Dynegy (DYN / NYSE)
Lehman Bros
We believe the merger is a net positive for the company, and that a combined firm could earn up to $3.50 per share in 2002.

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Dynegy (DYN / NYSE)
Goldman Sachs
DYN's acquisition of ENE was announced late Fri. A positive for both and maintain Recommended List ratings. Risks: unclear size of potential and likely liabilities and ENE faces challenges in restoring its former level of business. DYN mgmt believes the trans. will add $0.90 to $2.55 02 proforma EPS, a level we view as attainable. Target of $47 for DYN and $11 to $12 for ENE.

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Elan Corp. plc (ELN / NYSE)
Morgan Stanley Co.
The company received FDA approval for Frova (Migraines), but we are hearing that the company will be facing generic competition as early as next year. Maintain Neutral rating.

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Forest Oil Corporation (FST / NYSE)
Morgan Stanley Co.
Cutting estimates and price target to $37 per share. The company is producing less natural gas because of lower market prices, although the stock is still attractively valued. Maintain Outperform rating.

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Guidant Corporation (New) (GDT / NYSE)
JP Morgan Chase & Co.
Data out from AHA yesterday on Cook's coated stent (GDT has a joint program with Cook) and we think suggests GDT/Cook program is in good shape. Data showed 3% restenosis. could boost stock some today. Reit Buy.

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Guidant Corporation (New) (GDT / NYSE)
Weisel Partners
Cook presents better than expected ELUTES data at AHA; Modestlypositive but more data needed; Maintain Mkt Perform.

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General Motors Corp. (GM / NYSE)
Goldman Sachs
Current estimate below concensus. increasing our 2002 GM earnings estimate to $1.00 per share, up $0.30, based on a higher assumed rate of material cost reduction. Consensus earnings are $1.75 per share. No rating.

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H.J. Heinz Company (HNZ / NYSE)
Bank of America Montgomery
Lowering estimates to reflect earnings warning. We now expect the company to earn $2.40 per share in fiscal 2002 and $2.80 for next year. Maintain Market Performer rating.

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KLA-Tencor Corporation (KLAC / Nasdaq)
Morgan Stanley Co.
Raising price target to $60 per share and maintaining Strong Buy rating.

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Lam Research Corporation (LRCX / Nasdaq)
Morgan Stanley Co.
Raising price target to $30 per share and maintaining Strong Buy rating.

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LTX Corporation (LTXX / Nasdaq)
Morgan Stanley Co.
Raising price target to $25 per share and maintaining Strong Buy rating.

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Mentor Graphics Corp. (MENT / Nasdaq)
Morgan Stanley Co.
Cutting estimates to reflect lower outsourced R&D spending. We now expect EPS of $1.23 in 2002.

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Marvell Technology Group (MRVL / Nasdaq)
Goldman Sachs
Reports Q301 11/15 after the close. Expect in-line or slightly positive. Reiterate RL rating. Storage business at least 10% sequential growth ($41.5M). Comfortable with estimates: 2002 $283.4M and $0.15, 2003 $369.5M and $0.39.

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Novellus Systems (NVLS / Nasdaq)
Morgan Stanley Co.
Raising price target to $50 per share and maintaining Strong Buy rating.

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QLogic Corporation (QLGC / Nasdaq)
Weisel Partners
Increased disaster recovery should benefit the Storage Area Network market. Positive outlook for 2002 and 2003 with EPS estimates of $0.82 and $1.04, respectively.

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Siebel Systems (SEBL / Nasdaq)
Weisel Partners
Extremely bullish about Siebel 7, which is extending the product from 147 modules to 200 and will expand its support from 12 vertical industry applications to 20 by early 2002.

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Trigon Healthcare (TGH / NYSE)
Morgan Stanley Co.
Cutting our price target to $74 per share, despite in-line third quarter earnings. Maintain Outperform rating.

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Yahoo! (YHOO / Nasdaq)
Bear Stearns
YHOO ANALYST MEETING THIS THURSDAY

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Smith Barney Shearson (Banks)
Bank Stocks May Give Back Some of Their Recent Gains. Banks are up more than 10% in the last 3 weeks, and we believe psychology may turn negative ahead of 4Q earnings.

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Bear Stearns (Sentiment)
Bullish sentiment real high: SPX 77%, NDX 80%, 5 day moving average 84 and 85%. Equity P/C .73, INDEX P/C 1.97.

Weisel Partners (Growth Portfolio Stratgegy)
Highlight QLGC & SEBL as names with improving fundamentals vs peers; Remain positive on equities vs Treasury yields.

JP Morgan Chase & Co. (Newspapers)
Leading newspaper companies, including KRI, NYT, GCI, and DJ, are expected to report monthly ad linage and revenue figures this week for the month of October. We expect the monthly reports to be weak, but worse than the Q3 -- consistent with a bottoming in the ad decline, with little sign of recovery. We still like KRI, but are cautious on DJ, NYT, and GCI ahead of the reports.

JP Morgan Chase & Co. (Economic Strategy)
Our inflation outlook remains highly constructive: The PPI for October fell 1.6%, and the CPI reading (out next Friday) is expected to show a 0.4% decline, highly influenced by lower oil prices (core rate forecast, up 0.1%). While the outlook for household spending will be crucial for determining the extent of the recession, the upcoming data will be hard to read: October retail sales soared (out Wed: JPM forecast, up 5.5%, ex autos 0.9%), in part a bounceback from Sept shock.

Bank of America Montgomery (S&P 500)
Reducing our estimates and our price target to 1200. We are also reducing the equity weighting in our model portfolio to 60%, and deploying the 5% of assets into bonds.

Dain Rauscher (Semiconductor Industry)
Since 1996, the semiconductor industry has shown a dogged resistance to break through the $150 billion global revenue mark except in 2000. Unfortunately, this trend is likely to persist into 2002, with our preliminary estimate indicating revenues in 2002 likely to decline between 4%-8% from 2001 levels. We remain Neutral on the semiconductor industry, cautioning investors that the risk/reward profile is dangerously tilted towards risk.

Morgan Stanley Co. (Chip Equipment)
We are bullish, but cautious about the group in the near-term. Raising price targets, as we believe the next order cycle will start within the next six months.

Merrill Lynch (Oil)
We are cutting the target price for crude to $23 per barrel in 2002. We believe this is an attractive time to buy the refiners, such as BP, CVX and XOM.

Lehman Bros (Strategy)
We are suggesting that investors go underweight in bonds, and are reducing our allocation from 20% to 10%. The remaining 10% of assets should be placed in cash. We continue to recommend an overweighted position of 80% in equities.

Morgan Stanley Co. (Retail)
We believe October sales were relatively in-line with expectations. WMT, KSS and COST stood out for their positive results.

Lehman Bros (Retail)
We believe the introduction of Xbox and Gamecube could save the holiday season for BBY and CC.

Merrill Lynch (Retail)
We believe the third quarter was difficult for specialty retailers, with average earnings declining 43% year/year. Inventory management was aggressive, but further markdowns may be necessary to clear room for winter merchandise. We do not see reason to be optimistic about holiday sales at this time.

Weisel Partners (Electronics Manufacturing Services)
We rate sector "Market Weight"; Believe demand will stabilizein near-term.

Merrill Lynch (Strategy)
We see no evidence of a liquidity trap, and believe that defensive stocks are faltering. We would suggest that investors carry a "growth" portfolio into 2002.

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Oscillator: 3.1

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No major economic indicators are slated for release today.

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CCU Group Luncheon with Management

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F Group Luncheon

Qwest presentation at JP Morgan Conference.

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