Let’s take a look at analysts’ morning notes.
- BARCLAYS: iPad 2 is positive surprise. Steve Jobs’ appearance at the event was also positive but we focus on Apple’s strong fundamentals and iPad supply chain builds of over 40 million units this year alone as key for moving forward.
- DEUTSCHE BANK: Super attractive. iPad 2 launch timing is earlier than we expected and could drive March upside.
- BANK OF AMERICA: Steve Jobs helps the iPad 2 show. While we don’t expect this to be a catalyst for the stock, we believe investors find it reassuring. We estimate that every one million iPhone units equates to $0.15 in EPS.
BABCOCK & WILCOX (BWC):
- BARCLAYS: Some near-term challenges for the construction and engineering services provider. Encouraging trends in both domestic power and the government end markets, should keep longer-term investors. However, the sharp rise in expected mPower R&D expenses in 2011 could hurt margins.
- MORGAN STANLEY: Overweight. Increasingly good outlook for the power generation business. The environment is also more favourable for engineering & construction stocks with oil up 30%.
- UBS: Attractive stock. Business trends are solid. We expect beverage innovation in April as MCD laps the introduction of frappes. There is concern over inflation’s impact consumers but MCD has a history of gaining share during periods of food inflation due to its ability to advertise value.
- DEUTSCHE BANK: Hurt by winter weather. The main culprit behind its earnings miss was the weather in December and January during key selling weeks. Outside of this blip though SPLS will continue to take market share, which along with strong cash flows and favourable valuation underpin our buy rating.
- CITI: See long-term opportunities. We see growth in services, tech, break room supplies, deliver & further market share gains. Management was confident about margin improvement.
BJ’s WHOLESALE CLUB (BJ):
- CITI: Positive outlook. Club retailers are well-positioned in the rising gas price environment to benefit from increased traffic and sales.
WEATHERFORD INTERNATIONAL (WFT):
- CITI: Buy despite tax error. The oil services provider identified errors amounting to $500 million in its financial statements. The biggest consequence of tax credit reversal is that the company will record a book tax rate equal to its cash tax rate going forward. The errors have no impact on reported operating cash flow.
MCCORMICK & SCHMICK’S SEAFOOD RESTAURANT (MSSR):
- OPPENHEIMER: Downgrading to perform. We no longer view it as an ample free cash flow vehicle based on management’s move to nearly double its capital expenditures in 2011.
TELETECH HOLDINGS (TTEC):
- OPPENHEIMER: Solid outlook signals return to growth. Growing pipeline of new opportunities and strong uptake of tech-based solutions are good for top-line growth this year.
- DEUTSCHE BANK: Cigarette maker is on the negative track. Odds of ban recommendation later this month are high.