Let’s take a look at analysts’ morning notes
- Apple: The stock remains on the “conviction buy list”. Due to Jobs’ medical leave of absence Goldman does expect shares to see some near-term weakness but they view any dips as a buying opportunity.
- Their 12-month price target on shares of Apple is $430.
- The management team is strong and Tim Cook is a proven leader and will step in if Jobs’ absence becomes permanent.
- Apple has $51 billion in cash and investments which could be used to stabilise shares if needed
- The stock is trading at a historical discount and Goldman sees no threat to earnings
- Meritage Corporation: Downgrade to sell from neutral. We’re concerned that current constraints will limit demand and delay a rebound into 2010 but our earnings-per-share and price target remain unchanged.
- We believe it is well positioned for a turnaround given its land light model, increasing sales in newer, more profitable communities and robust liquidity.
- Our downgrade reflects concerns about valuations, not strategy.
- Prudential: Maintain hold but increase price target. Our move is supported by an improved earnings outlook in the wake of continued equity market strength.
- Wal-Mart: Reiterate buy. There are many growth opportunities at the retailer. Assortment changes as well as greater emphasis on international and e-commerce growth as well as opportunities for continued expense leverage our contributing to a positive outlook.
- Yahoo!: Downgrade to equalweight. We see good value on Yahoo!’s Asian assets but believe core business headwinds will limit share appreciation. Our analysts suggests Yahoo! shares are worth $19 with contribution from Yahoo!’s core business, Alibaba Group, Yahoo! Japan and net cash.
- First Republic: Initiating coverage at equalweight. It has an attractive high-net-worth client base and expected market share growth in New York and Boston which will help it report exceptionally strong loan growth.
- Sunoco: Overweight. We think its acquisition of Harold Keene Coal will have a neutral impact on the shares given the size of the transaction.
- It announced it would acquire Harold Keene Coal for $40 million in cash (including working capital). Sunoco estimates reserves of at least 16 million tons.
- Harold Keene’s production has been sold as steam coal in 2011 , we think the net income contribution will likely be modest and may be only a couple million for the year.
- First Republic: Initiating at neutral. It recently reemerged as a publicly traded company and we find the unique business model intact, credit quality still best in class and key management still in place.
- The competitive environment is less conducive to growth and could present some risks.
- As part of the Economic Stimulus Act of 2008 the limits on mortgages were raised as a measure to help the market which could reduce the amount of customers that come to FRC for a mortgage, their lead product.
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