Good morning, here’s your daily research report from the Street:
- Broadline Retailers: Analysts are raising expectations for growth going into same-store-sales announcements tomorrow (Costco may lead earlier today). On the back of Missoni sales, Target SSS guidance is for 3 to 4% growth, while estimates at Nordstrom and Saks is for 5 to 7% SSS growth.
- Shutterfly, Inc. (NASDAQ: SFLY): New Apple iOS 5 Cards application likely to have little impact on Shutterfly which is more robust and has greater pricing options. If Apple goes the route of its Final Cut Pro, it could be using a bare bones first version before adding matching features. Maintaining buy rating and $73 price target.
- Urban Outfitters (NASDAQ: URBN): Meetings with management were not upbeat for this coming quarter or holiday. Urban took responsibility for the fashion miss and believes it can right assortment by February or March of next year when work by a new creative team fully hits the selling floor.
- WebMD (NASDAQ: WBMD): After the bell, management guided revenue lower for the third quarter with tough visibility of fourth quarter and 2012 results. WebMD believes meaningful sales will still take place, but that the tough macroeconomic picture will hamper growth.
- Energy Mergers & Acquisitions: Since the 33% sell off in oil services over the summer, M&A activity is likely to fall in the fourth quarter, and will not return until the broader stock market rebounds. Instead, companies like Halliburton and National-Oilwell Varco will announce share repurchase programs.
- CBS Corp. (NYSE: CBS): Raising company targets as CBS begins to shift revenue stream to retransmission fees and syndication and away from ad revenue. Fewer 2012 benefits from Olympic and political spending seen aiding the networks. Citi expects ad revenue at the company’s CBS division to drop 2% in 2011 and increase 3% in 2012, to $3.9 billion and $4.1 billion, respectively.
- Walt Disney Co. (NYSE: DIS): Analysts are forecasting earnings of $2.20 a share even under a double-dip recession on the back of expansion at the Parks division and an uptick at Media. However, sees continued weakness at the Studio segment, where revenues may fall to $6.4 and $6.3 billion in fiscal 2011 and 2012, respectively, from $6.7 billion in 2010.
- Price Changes: Increases: Affymetrix (Target Price to $6.00 from $5.75), Decreases: Acme Packet (Target Price to $50.00 from $60.00), Bruker Corp. (Target Price to $14.50 from $16.00), Life Technologies Corp. (Target Price to $43.50 from $44.00), Thermo Fisher (Target Price to $63.00 from $65.00).
- AK Steel (NYSE: AKS): The company announced that it would reduce exposure to iron ore and met coal costs through two investments. AK Steel will contribute $297.5 million to a joint venture with Magnetation and recently acquired Solar Fuel.
- Dow Chemical (NYSE: DOW): Management sees earnings of $8 billion and EPS of $2.50 even under a black sky view, better than the $5.5 billion and $0.60 seen in 2009. Dow is now seeing a pause in growth, as opposed to full decline. Emerging markets remain strong for the firm.
- Payment Processing: The difference between signature and PIN-debit transactions is gone with new interchange rate schedules announced. Regulated bank rates are going up to the cap of $0.23 for both debit and signature swipes. But, Visa’s standard debit interchange will fall by about 60% to $0.23 from about $0.58 on a $40 transaction.
- Global Payments (NYSE: GPN): Strong international results of $543 million in first quarter 2012 revenue surpassed estimates of $517 million. JPM is raising expectations for 2012 EPS to $3.52 from $3.42.
- Strategic Hotels & Resort (NYSE: BEE): Strategic has yet to see any cancellation increases or declining group bookings going into October. Management believes strong demand, coupled with limited supply, will help it outpace industry revenue per available room by 100 to 200 basis points in 2012.
- Latin American Air Transport: LAN and TAM airlines are challenging three merger requirements to Chile’s Supreme Court. The companies believe giving up Peruvian routes and the requirement for antitrust approval on any code-share alliances are illegal.
- SanDisk (NASDAQ: SNDK): Release of Apple iPhone 4S with increased memory will benefit SanDisk. With the impending release of Cloud, solid state netbook and tablet adoption likely to jump.
- Ameren (NYSE: AEE): Company announced that it will close Meredosia (369 MW) and Hustonville (151 MW)energy plants by the end of 2012 because of higher NOx ans SO2 emission requirements. Analysts see this trend extending to other energy producers who will need to retire old plants.
- Oracle (NASDAQ: ORCL): Strong momentum for its Exadata product, where unit prices can reach $1 million for a full rack, is helping the company deliver. Oracle recently increased prices by 10%, suggesting growing demand.
- Teva Pharmaceuticals (NASDAQ: TEVA): With good results for Biogen’s BG-12, concerns around Copaxone will spurn Teva. Teva was looking to a combination of Laquinimod and Copaxone as a potential life-cycle extension, but commercial success may be at risk.