Notable Wall Street digital-business research calls for Wednesday, January 8:
Software (MSFT, ORCL). Credit Suisse’s J. Maynard is more optimistic than Goldman about the prospects for software companies in a recession. He cautions that software stocks aren’t “recession proof” and that the fears of a weakening economy will depress capital expenditures, but he believes that “large diversified companies” can continue to succeed with “disruptive solutions” like virtualization. Maynard likes Microsoft (MSFT) and Oracle (ORCL) due to stellar “revenue and margin growth potential.” Small to mid cap picks include salesforce.com (CRM), Concur, Citrix (CTRX), and BEA. (Goldman, meanwhile, just peed all over Salesforce)
Media/Entertainment (NWS, GE, DIS). Credit Suisse’s Heath Terry examines the continued fallout of the writer’s strike. Despite rebounding week-over-week numbers, viewer-ship is down 11% Y/Y. The loss of the Golden Globes is expected to cost NBC $15 – $20 million. Fox is the only network that has been able to keep viewership flat since the writer’s strike. .
Telecommunications (T): Citi argues that telecoms remain resilient to a softening economy. At least, that was the cautious consensus reached at the 18th annual EMT conference (the one in which AT&T’s CEO Randall Stephenson crushed the stock market yesterday by remarking that consumers had stopped paying bills). Stephens was guardedly optimistic about the rest of the business, suggesting that enterprise and wireless growth would remain strong. Ditto from Global Crossing, Equinix, PAETEC, and Citizens Communications. US Cellular offered a dissenting opinion, claiming that a weak economy contributed to lower sub growth.
Telecoms. Goldman’s outlook for US telecoms is also relatively upbeat, despite predictions of recession, to which telecoms are to some extent insulated. The prospective recession is, however, expected to hit telecoms in the consumer wireline segment.
Motorola (MOT: Credit Suisse expects Motorola to outperform as a result of its ability to effectively reduce handset production costs. Credit Suisse is also encouraged by Motorola’s intention to “enhance its product portfolio.
Internet (IACI, RATE): Citi says IAC expects strong HSN growth and for spin-offs to remain on track. Bankrate insists that it has benefited from the transition from sub-prime to prime and that a diverse customer base will serve as a hedge against risk.
European telecoms. Credit Suisse anaylst J. Funnell discusses the recent downgrade of European telecoms from overweight to market weight. Erosion in earnings growth due to roaming cuts and low elasticities will produce fewer earnings suprrises. Vodafone, DT, Telefonica, and Inmarsat are still expected to outperform.
Samsung Electronics (005930.KS). Credit Suisse expects Samsung to outperform due to a “healthy product mix in memory” and strong TFT-LCD, which are expected to exceptionally well due to soaring demand for TV panels for the Olympics.
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