Let’s take a look at analysts’ morning notes.
- UBS: Downgraded to neutral. It will still have a dominant position in e-commerce, taking share from both offline and online competitors. However, a period of high investment due to increased content costs and distribution deals with hardware providers may provide margin expansion in H2 2011. Amazon’s video streaming plan, Prime, is likely to increase costs before it boosts revenue.
- MORGAN STANLEY: Riding the flu season wave. Flu medicine is helping drive near term revenue. Our weekly data shows flu season is reaching peak levels. As this compares to an early collapse in flu season last year, we expect strong February same store sales to be reported on March 3. Raising our 2Q EPS estimate to $0.84 from $0.79.
INTREPID POTASH (IPI):
- BARCLAYS: Bearish. Strong pricing expected for 2011 but production is challenged. With mine development work, potash grade issues and lower langbeinite recoveries, we expect production levels to struggle this year, limiting IPI’s ability to capitalise on the strong pricing.
- DEUTSCHE BANK: Stock is in a turnaround phase. It is in the early, and rapid stages of another turnaround to accelerate sales, further rationalize costs, advance systems & rationalize/remodel stores. Share repurchases initially $900MM starting in March, should add upside to guidance for several years. Reiterate buy.
- JPMORGAN: Neutral. We’ve seen this restructuring move before by JCP (store closings/wind down of catalogue/ call centre realignment) and a new $900 million buyback in the past seven weeks, a lot in a short period of time.
FOOT LOCKER (FL):
- UBS: Neutral. Slow sales start to 2011.
NRG ENERGY (NRG):
- UBS: Neutral. Growing out of commodity decline.
SEAGATE TECHNOLOGY (STX):
- JPMORGAN: Downgrading to underweight from neutral. Key risk is potential to be a market share loser in a softening market.
WESTERN DIGITAL (WDC):
- JPMORGAN: Trimming estimates as PC Demand conditions soften and share shifts continue. Stay neutral.
APPLIED MATERIALS (AMAT):
- JPMORGAN: Raising estimates. Strong results driven by SemiCap and Solar.