Let’s take a look at some analyst notes.
- Still bullish on Amazon (AMZN): “We remain buyers particularly as accelerating unit growth should yield improved operating profit dollar growth long term. While the market may be concerned with reinvestments (leading to lower margins) we believe $53 million in spend from operation profits should yield roughly $200 million in incremental profits over four years. Still, we think operating profits will increase 25% through 2012 and view reinvestment as the grounds for laying a solid growth foundation.”
- Likes Microsoft (MSFT): “Earnings impressed, exceeding estimates for revenue and earnings-per-share and bookings grew 21% year over year. Revenues were driven by strong adoption trends of Office 2010 and Kinect outperforming.”
- Staying Neutral on Coach (COH): “It has a good investment track record & visible global opportunity that make a targeted return to mid-30’s EBIT margins over the next few years believable. We continue to prefer names like Ralph Lauren which has similar China exposure, a large/growing Europe biz, and is experiencing better leverage on global investments in recent quarters and Nike.”
- Danaher (DHR) is well positioned for 2011: All eyes are on potential next steps in M&A. Its fourth quarter results were high-quality, as expected with core revenue at 13%. We remain “table-poundingly” positive on DHR’s set-up for 2011 but we also acknowledge that the upside did not change with these results. We remain positive on DHR shares as the relative valuation remains attractive at the low-end of its range versus peers.
- Pleased with Amazon (AMZN): “We continue to believe Amazon will become a $100 billion revenue business by 2015 generating excess stock returns over the period as did Walmart on its path to $100 billion. The stock has made a significant positive move over the past six months on the heels of lower-than-expected near-term profits – it needs a breather. The long-term dynamics that we have written about remain intact and we expect book and consumer electronic store model disruption could occur in the next 12-24 months, driving share shift acceleration in those categories. Heading into the seasonally weaker period of the year for eCommerce, we would be patient when adding to positions at levels in the low-to-mid $150s we would be aggressive near-term buyers of Amazon.com shares. Our 12-month price target is $205.”
- Murphy Oil (MUR) seems oversold: “Shares were hit hard yesterday after their disappointing release and first quarter guidance. The real question is whether the 1Q guidance is bad enough to justify a 10% drop in the company’s value or $1.5 billion. We don’t think so and thus believe the shares are oversold at least in the near term.”
- Bullish on Invesco (IVZ): “Core business trends are stable-to-improving and the opportunity for acceleration through the Van Kampen acquisition remains significant, in our view, The combination of solid investment performance, enhanced distribution capabilities and stringent expense management should accelerate IVZ’s earnings power and organic growth. The earnings trajectory for IVZ continues to accelerate. We anticipate the benefit of an expanding distribution network at IVZ to drive incrementally higher sales and continued margin expansion as further cost synergies from the VK transaction are realised.”
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