Let’s take a look at analysts’ morning notes.
- Wynn Resorts (WYNN) is poised for growth: Las Vegas is looking up for 2011. Management is optimistic on LV for 2011 as convention biz moving to 20-22% of mix. Interestingly, higher than expected corporate development expense during Q4 and with the design of Cotai done, Wynn management could be looking toward U.S. projects. Wynn Resorts remains our top pick in the gaming space.
- L’Oreal (OREP): Downgrading to neutral after a good run
- CBOE Holdings (CBOE): M&A driving sentiment after solid 4Q10
- Good outlook for Kraft Foods (KFT): Over the long term we believe Kraft is better positioned with a focus on global snacks/confection. Yet a combination of slower Cadbury sales growth, a wave of inflation that appears hard to overcome versus an aggressive 11-13% 2011 EPS growth target, still above average leverage and valuation in line with the group, keeps is with a HOLD opinion.
- Wynn Resorts (WYNN) Maintain buy
- Panera (PNRA): 4Q was strong finish to 2010
- Expect margin improvement for TreeHouse Foods (THS): The company expects +100bps of gross margin improvement in 2011 along with positive moves in its base business and favourable mix from recent acquisitions, not to mention above average visibility into its cost structure. We believe other food companies would be lucky to have two such capable leaders as CEO Reed and COO Vermylen.
- CBOE Holdings (CBOE): minimising volatility, maintaining options
- Montpelier Re Holding (MRH): 4Q10 results better than anticipated; headwinds persist
- Bullish on Chipotle (CMG): The company maintained its 2011 SSS guidance of low single digits which is a moderation from the 9% SSS growth in 2010 as a result of tough prior year comparisons. Encouragingly, management mentioned underlying transaction trends are healthy so far in 2011, and trends have not gotten worse or better. The company also mentioned trends are volatile market-by-market given sever weather. We believe this implies momentum in SSS remains strong.
- Kraft (KFT): Maintain buy. Strong volumes drive Kraft’s 4Q10.
- Blue Nile (NILE): Downgraded to hold
- Stellar quarter for Chipotle (CMG): This was another good quarter as measured by SSS and EPS growth, through the specter of food inflation in coming quarters compels us to hold our forward estimates where they are for the first time in many quarters. That plus the possibility of the current labour investigation reaching beyond the three regions already identified and the commensurate re-hiring and training costs could create multiple contraction as the market cannot afford to ignore these mounting issues.
- Healthsouth Corp (HLS): Upgraded rating from equalweight to overweight, 20% upside potential
- Envestnet (ENV): Solid 4Q. Lowering 2011 EPS as investiment in long-term growth drives near-term margin pressure
- Expedia (EXPE): Downgraded by Bank of America to neutral
- Radware (RDWR): Upgraded by Oppenheimer to outperform
- Wright Express Corp (WXS): Downgraded by Goldman Sachs to neutral
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