Good morning, here’s your morning equity takeout from the Street:
- U.S. Financials: The Fed’s H.8 report showed total loans at the nation’s 25 largest domestically chartered banks increasing $8.0 billion to $3.9 trillion. Commercial and industrial loans grew for the twelfth straight week, which has not been seen since 2007, to $678 billion. Deposits at all commercially chartered banks increased $42.2 billion to $8.4 trillion.
- U.S. Airlines: Barclays released revenue per available seat mile guidance for 4Q11 and 2012 for Jetblue (12-14% growth in 4Q, 4-6% growth in 2012), Southwest (8-10% growth in 4Q, 4-6% growth in 2012), United Continental Holdings (8-10% growth in 4Q, 5-7% growth in 2012) and U.S. Airways (11-13% growth in 4Q, 7-9% growth in 2012). All were consistent with analyst models and showed no incremental slowing.
- Canadian Financials: Canadian banks reported roughly positive results for their fiscal fourth quarter, which ends Oct. 31. Cautious outlook from capital market divisions may spur layoffs and restructuring — which Canadian firms have been less apt to do (they are typically less cyclical in hiring and firing than peers in the U.S. and Europe).
- Ford (NYSE: F): Contracts with the UAW seem headed towards ratification, which may send the firm toward investment grade rating. With 70% of votes in, 62% voted yes. Total costs will likely increase by $70 million annually. Barclays reiterates $15 price target.
- U.S. Autos: Citi is raising estimates on both Ford and GM on strong quarterly sales and healthy expected guidance. GM third quarter estimate to $1.05 from $0.79, and Ford up two cents to $0.46.
- Apple (NASDAQ: AAPL): Citi is raising estimates to $8.54 from $8.13 before Apple reports on Tuesday on the back of increased Mac sales. Analysts see Mac units increasing to 4.4 million for the quarter on strong demand for the MacBook Air, up 13% year-on-year. Not everyone agrees.
- El Paso and Kinder Morgan Merger (NYSE: EP and KMI): Citi analysts see the $38 billion take over producing synergies topping $4.40 a share, which leaves the offer above incremental valuation. Analysts note there could be regulatory difficulty.
- Intel (NASDAQ: INTC): Expecting chip maker to report in the middle to upper-half of its guidance of $13.5 to $14.5 billion in revenue. Accelerating notebook sales will benefit the fourth quarter, though Acer excess inventory and HP’s possible exit of the segment may post headwinds.
- U.S. Retail: Analysts expect department stores to hold up favourably. The segment is better positioned than it has been this past decade with stronger capital and inventory management. Gap store right sizing, the company’s plan to reduce average unit square footage, is hitting more footprints going into Holiday.
- U.S. Rail: Carloads came in at 676,000, up 2.4% year-over-year. The volume represented the third highest on a year-to-date basis and shows resilient inventory trends.
- U.S. Fixed Income: Believes better news out of Europe will push yields up greater than Operation Twist has been able to. Analysts believe about “half of the ‘good news’ has been digested by the market” already. 30-year TIPS may appear cheap, but will have to come down some for the $7 billion supply to drop.
- Price Changes and Initiations: Initiated: Colgate-Palmolive ($101.00), Charter Communications ($67.00), Cree Inc. ($35.00). Increases: None, Declines: Interpublic Group (new $11.00 v. old $12.00), J.P. Morgan, (new $49.00 v. old $54.00) Omnicom Group (new $47.00 v. old $52.00)
- Oil Services: Canadian exposure presents positives for earners this season as rig count approaches record levels and channel checks show strong third quarter results. Companies like Trican Well, Cano Petroleum, and Nabors Industries have maximum exposure.
- U.S. Media: On the back of strong upfront sales, pricing in the advertising scatter market — or sales made during the season — looks to hold up well. Supply is limited, so even falling demand will likely be less impactful.
- Specialty Retail: About half of retailers in the UBS coverage universe have higher promotions versus last year. Discounts at Antropologie of 40% off are hurting second half estimates, and analysts are lowering earnings estimates by three cents to $0.32 for the quarter. Denim inventory may hurt Abercrombie & Fitch.
- Coca-Cola (NYSE: KO): UBS sees flat organic growth for North America, consistent with the second quarter. However, Latin America, the Pacific and Europe and Africa will lead with volume up 5.5%, 4.2% and 4.0%, respectively. Foreign exchange rates to benefit to the tune of 1%.
- The New York Times (NYSE: NYT): October advertising lineage is trending down 17%, even as national auto ads surge 114%. The Wall Street Journal having similar results, down 10% so far this October. The Times reports on Thursday, with a consensus estimate for $0.04 EPS.
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