What Wall Street Analysts Are Buzzing About This Morning

Good morning, here’s your daily equity research takeout from the Street:


  • Price Target Changes: Increases: Domino’s Pizza (new $26.00 v. old $24.00), UnitedHealth Group (new $60.00 v. old $59.00), Yahoo! (new $19.00 v. old $18.00); Decreases: Bank of America (new $13.00 v. old $14.00), Goldman Sachs (new $145.00 v. old $150.00), Hospira (new $30.00 v. old $44.00), Simon Property (new $119.00 v. old $125.00), State Street (new $54.00 v. old $57.00), Vornado (new $81.00 v. old $95.00)
  • Bank of America (NYSE: BAC): Bank of America posted earnings of $0.56 a share yesterday on a very noisy quarter. There were 15 special items, down from a record 16 in the second quarter. But increased capital reserves, to the highest level in 15 years, lower expenses and a focus on core business portends management direction.
  • Coca-Cola (NYSE: KO): Coca-Cola reported earnings that beat consensus by a penny, coming in at $1.03. The beverage giant noted that currency and commodity headwinds would impact earnings meaningfully in the fourth quarter.
  • Goldman Sachs (NYSE: GS): “Based on the GS management commentary and the various metrics that we track, we believe we are not out of the woods and an unknown degree of market stress remains bubbling just below the surface … That being said, not all is dark and cloudy. As the prior crisis showed, the period of most intense stress was followed by a swift and substantial re-risking which resulted in some of the highest client flow revenues for firms that were able to participate.”
  • Stanley Black & Decker (NYSE: SWK): Barclays views the company as the clear leader in building products and is increasing fourth quarter estimates to $1.23 from $1.17. At the same time, analysts are lowering 2012 expectations to $5.61 from $5.73. Stanley Black and Decker missed consensus earnings yesterday, but investors had largely already priced that in.


  • Apple, Inc. (NASDAQ: AAPL): Apple missed analyst consensus yesterday on slowing iPhone sales. Management attributed the shortfall to customers waiting for the 4S release. True enough, more than 4 million units sold over its first weekend, compared to 17 million iPhone units during the entire third quarter. Mac and iPad sales were impressive with growth of 24% and 20% quarter-on-quarter, respectively. Citi reiterates previous above-consensus revenue and EPS estimates, setting 12-month price target at $500.
  • Best Buy (NYSE: BBY): Continued depression in television pricing is hurting the retailer. Analysts maintain sell rating. Weak product assortment coupled with consumers closely watching spending will weigh on Best Buy in the near term.
  • Omnicom (NYSE: OMC): Increasing price target from $46.00 to $48.00 on strong third quarter results. EPS came in at $0.72 on sales of $3.38 billion. Organic growth was the big driver, with international assignments up 8.8%.
  • Steve Madden, Ltd. (NASDAQ: SHOO):  Initiating coverage on the footwear retailer with a price target of $41.00 and Citi EPS estimate of $2.84, a quarter above consensus. Strength in sourcing abilities allows for a 6 week lead time to market, versus 4 months for peers.

Credit Suisse:

  • Cree, Inc. (NASDAQ: CREE): The company missed earnings estimates and lowered December guidance by 100 basis points. Credit Suisse maintains 2012 EPS of $1.18, below consensus of $1.67.
  • Intel (NASDAQ: INTC): Intel beat as expected on sustainable growth. Analysts note, “Moore’s Law has driven semiconductor economics for over 40 years … improving performance/power AND lowering cost. INTC is 1 of 1 chip companies with the IP, scale, and resources to continue to leverage Moore’s Law – their lead is meaningful, widening and consequential.” Supporting $30 price target.

Deutsche Bank:

  • Harley-Davidson Inc. (NYSE: HOG): The company reported below consensus third quarter earnings of $0.81. That includes a lower tax rate boost of $0.13. Deutsche Bank maintains a hold rating on the motorcycle manufacturer and sees choppy short-term waters.
  • Hawaiian Holdings (NYSE: HA): A return of the Japanese traveller sent shares, and earnings, up. EPS came in at $0.59, excluding one-time gains, above estimates for $0.45. Analysts reiterate buy rating.
  • Starbucks (NASDAQ: SBUX): With the launch of its Blonde light roast, Starbucks is attempting to increase its customer base. Analysts are positive on the news, specifically because Starbucks will maintain its premium positioning with the launch and will price packaged roasts by tier with light at the bottom.

Goldman Sachs:

  • Intel (NASDAQ: INTC): “Our call that Intel would guide 4Q11 below the Street due to weak PC demand was very wrong.”
  • Johnson & Johnson (NYSE: JNJ): Pharmaceuticals performed well, while margins came under steep pressure. Goldman increases 2011/12/13E EPS to $4.98/$5.27/$5.72 from $4.95/$5.23/$5.68. Analysts see risks on new product setbacks.
  • Juniper Networks (NYSE: JNPR): The company announced disappointing guidance yesterday as third quarter revenue came in at $1.1 billion. Cisco’s recent move into Juniper territory will pose significant headwinds for the technology firm.
  • State Street Corp. (NYSE: STT): Reiterate buy after strong third quarter results of $0.93. The company saw continued new business momentum and kept expenses in line. Goldman raises 2011/2012/2013 EPS estimates to $3.78/$4.05/$4.70 from $3.64/$4.00/$4.56.

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