Good morning. Here’s your daily equity research roundup from the Street.
Priceline.com (PCLN): Goldman analysts Heath Terry, Debra Schwartz, Mrinal Pareek are reiterating their Buy rating on PCLN but lowering their price target on the stock to $760 from $860 after the company reported lackluster earnings and lowered guidance on Tuesday. The analysts write, “We are revising estimates to reflect deteriorating macro conditions. Our gross bookings estimate for 2012 decreases to $27,473mn and non-GAAP EPS to $29.33 from $28,590mn and $29.76, while 2013 goes from $36,224mn and $39.07 to $33,663mn and $36.08 and 2014 down from $44,628mn and $48.14 to $40,070mn and $43.13.”
MGM Resorts (MGM): Morgan Stanley analysts Mark Strawn and Amir Markowitz are downgrading MGM to Equal-weight from Overweight after the company also reported lackluster earnings Tuesday, writing, “The key pillars of our prior Overweight thesis, a multi-year recovery in Las Vegas Strip trends and an under-appreciated free cash flow / deleveraging story, remain intact on a long-term basis, but the Las Vegas recovery thesis has once again been extended beyond consensus expectations and the balance sheet catalysts have largely played out.”
BofA Merrill Lynch:
Chesapeake Energy (CHK): BofA analysts Doug Leggate, Ipsit Mohanty, and Jason Smith are raising their price target on CHK to $35 from $31 after the company reported strong earnings Monday, writing, “With planned spending down $6bn 2013 and asset sales confirming CHK’s move towards harvest mode, we believe CHK is back on track and poised for continued share price recovery.”
Walt Disney Co (DIS): Credit Suisse analyst Spencer Wang is raising his price target on DIS to $56 from $50 after the company beat on earnings but missed expectations on revenues Tuesday. Wang writes, “As expected, Studio demonstrated notable strength with EBIT of $313m vs. $49m, lifted by the box office success of The Avengers. This supports our bullish view of the Marvel acquisition…we are raising our FY12 EPS estimate by 3% from $3.01 to $3.10 to reflect the upside in FY3Q12.”
CVS Caremark (CVS): Citi analysts Deborah Weinswig and Nathan Rich are raising their price target on CVS to $60 from $52 after the company beat earnings estimates and raised guidance for the remainder of the year. The analysts write, “the results vs. our estimate were driven by better-than-expected gross margin and share repurchases…we continue to believe that CVS is well-positioned to realise strong growth in its retail and PBM businesses in 2012.”
Altria (MO): Deutsche Bank analyst Andrew Kieley is raising his price target on MO to $36.50 from $36, writing, “We are raising estimates based on MO’s debt transactions; the announced $2.0b tender for legacy high-coupon debt (dating back to UST acquisition), and the coinciding $2.8b debt placement at attractive rates…we raise 2013 EPS by $0.03 on lower cost of debt.”
Best Buy (BBY): Jefferies analysts Daniel Binder, John Marrin, and John Gugliuzza weigh in on BBY founder Dick Shulze’s offer to buy all outstanding shares for $24-26, writing, “we suspect the Board will find unacceptable. We think an ultimate takeout bid would have to be in the high $20s to low $30s to give fundamental investors a large enough premium to forego the execution risks associated with what will likely be a complicated 2-3 year turnaround.”
Sirius XM Radio (SIRI): Pivotal analyst Jeffrey Wlodarczak is raising his price target on SIRI to $2.65 from $2.60 after the company beat earnings and raised guidance, writing, “We continue to find the shares of SIRI attractive long term based on: 1) a likely rebound in U.S. auto sales off of still depressed levels, 2) SIRI should beat still arguably conservative full-year subscriber guidance, 3) more resilient model than anticipated by the market as exclusive content + presence in 2/3 of new cars + sheer relative size affords a deep protective moat around their business model.”
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