Good morning. Here’s your daily roundup of equity research from the Street.
Bank of America:
Google (GOOG): Analyst Justin Post is excited by Google’s transition of Google Product Search to a paid, ad based model, to be called “Google Shopping”. It could be a catalyst for Google’s earnings, providing an estimated $540 million to $2.1 billion in revenue. Buy rating reiterated, with a price target of $750.
Potash Corp (POT): Hold rating maintained, but price target lowered to $45 from $55. Historically, valuation is fair, even low. However, high inventories, macro growth concerns, lower Indian demand, and a potentially large U.S. harvest will hold the stock back in the near term.
Hewlett-Packard Company (HPQ): Downgraded to hold, and price target reduced to $23 from $30. Despite cost cuts and strength in cloud computing, Jefferies anticipates challenges to the rest of HP’s business. Specifically, they see tablets and smartphones hurting PC and printer sales, and European headwinds reducing IT spending.
Sprint Nextel Corporation (S): Upgraded to overweight from neutral. The upgrade is predicated on an expected increase in EBITDA expectations, benefit from industry M&A (even if uninvolved), the fact that liquidity risk has passed, and confidence in Sprint’s Network Vision Plan. J.P. Morgan sees a 50-60 per cent upside to their estimate of fair value.
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