Let’s take a look at the day’s morning notes, shall we?
- GOLDMAN OUT WITH A HUGE REPORT ON THE WINNERS AND LOSERS IN TABLETS “Among the biggest winners that we see in the tablet sea change are Apple (CL-Buy), Broadcom (CL-Buy), Qualcomm (CL-Buy), HTC (CL-Buy), Synchronoss (Buy), Motorola Mobility (Buy), Nvidia (Neutral), and ARM Holdings (Buy). Meanwhile, we see tablets as threats to Acer (CL-Sell), Dell (Sell), Hewlett-Packard (Sell), RIMM (Sell), Intel (Neutral) and AMD (Sell). A more comprehensive list of expected winners and losers is included in the body of this report.”
- GOLDMAN IS BULLISH: “Coincidental with a broader joint analysis with our technology team of winners and losers from increased tablet penetration, we are raising our 2011 forecast for RSH by $0.01 to $1.73, and our 2012 estimated by $0.08 to $2.04. We also introduce a 2013 EPS of $2.45. We model an incremental 1.4% impact on company”
- BOFA LIKES THE HOSPITAL: “We are reinstating coverage of HCA, the largest for-profit hospital company in the US, with a Buy rating and $38 PO as we believe the company’s scale advantages position it well to benefit from positive industry fundamentals. High local market share in fast growing markets combined with a service business opportunity point to a higher organic profile. Our $38 PO is based on 7.8x 2011E EBITDA, at the midpoint of its historical 6-10x range when HCA was previously public and a 4% discount to the historical industry average of 8.1x”
- OPPENHEIMER ALSO LIKES IT: “We are initiating coverage of HCA with an Outperform rating and a $40 price target (15X our ’11E EPS), which represents ~25% potential upside from the current price. HCA is the largest non-governmental hospital operator in the US, providing services through a network of acute care hospitals, outpatient facilities, clinics and other delivery settings.”
- CITI SEES BIG OPPORTUNITIES IN THE US: “We have reduced our Eastern Hemisphere forecast to reflect the operational disruptions associated with Middle East and North African geopolitical events and start-up delays in Iraq that continue to cast uncertainty over the pace of the international recovery. However, HAL has greater leverage than the other Big Four diversified service firms to North American service intensity and oil/liquids-rich drilling and completions trends, and we expect these factors will ultimately drive superior growth for the company going forward.”
- CITI SAYS TO FORGET THE JAPAN ISSUES: “Japan Risk As We Had Expected. — Although TI’s revenue print/guide were largely inline with expectations, the impact of the Japan earthquake was felt in both gross margin and EPS; TI recognised a $30M impact to 1Q11 profits and expects an ~$80M impact to 2Q11. Even after lowering estimates on 3/25, we lower once again reflecting this impact—our price target falls to $40. To be sure, in their guidance, TI has well contemplated the Japan impact from a sales, supply, and supply chain perspective. But this early in earnings season, we suspect TI’s views are not able to bracket the Japan issue sufficiently to make investors comfortable with chip stocks, particularly when facing negative seasonal factors. We expect investor interest will remain tepid NT.”
- BULLISH COMMENTS FROM UBS: “Revenue grew 15.2% (UBSe +10.4%) and 12.3% ex-M&A (UBSe +6.8%). EBIT margins were 11.9% (UBSe 10.5%) as pricing and volume offset inflation and M&A-related dilution. EPS guidance for 2011 rose to $3.05-$3.25 from $2.80- $3.00. FCF guidance rose to $130-$150mn from $130mn, implying better 2Q-4Q performance after a large, growth-driven step-up in working capital in 1Q weighed on 1Q cash flows. Given 1Q11 margin performance and the revised outlook CR’s 13% EBIT margin target could be well within reach exiting 2011”
- MORGAN STANLEY SAYS COMPANY IS IN THE SWEET SPOT: “Recent results and checks suggest SAP is in the sweet spot of enterprise IT spending. This should drive an acceleration in the core business, with the new products offering incremental upside. We upgrade to OW from EW and increase our price target from €41 to €54. We also add SAP to our Best Ideas list. We believe that the acceleration SAP saw in its core business in 4Q10 is sustainable. We have upgraded our forecasts for SAP’s core extended ERP & BI business from 6.5% to 10%. We think that HANA is a unique product with significant customer benefits. SAP has to maintain its speed to market, but the product should command premium pricing until competition emerges. We think HANA alone can add 3% to licence growth from 2012e.”
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