Good afternoon, here’s your equity research roundup from the Street:
- Bed Bath and Beyond (NASDAQ: BBBY): Beat earnings estimate with $0.93 a share vs. expectations of $0.82. Sales increased to $2.3 billion in the quarter, with same-store sales up 5.6%.
- Comcast (NASDAQ: CMCSA): Ratings for part of NBC’s lineup are out and they’re not terrible. Up All Night and Free Agents premiered to solid numbers, pulling a 3.7 and 2.1 rating respectively in the coveted 18-49 demographic during the first week of premiers. As CBS, ABC and Fox release the rest of their lineup over the coming weeks, competition will heat up and pressure these ratings.
- Discovery Communications (NASDAQ: DISCA): Discovery signed a two-year deal with Netflix to put older content online (content aired before the past 18 months). Estimated size of the deal is between $75-$150 million. At 80% margins, analysts estimate this could add 4-8% in earnings power.
- General Mills (NYSE: GIS): Reported that average growth across its 13 key categories increased 4% for the 1Q12, compared to flat growth for all of 2011. With commodity inflation expected to decline slightly for the group, margin pressure should be relieved and General Mills may be able to hold onto higher established prices.
- Adobe Systems (NASDAQ: ADBE): Sales inline with expectations at $1.013 billion for the third quarter. Some suites were lighter than hoped, but video segment showed impressive stamina.
- Amazon.com (NASDAQ: AMZN): Online traffic as reported by comScore showing growth in August, with same-store sales up 82% in the company’s third-party marketplace. Cloud services division seen growing to $1 billion in 2011.
- Bank of America (NYSE: BAC): Downgraded yesterday at Moody’s which sent the stock into a sell off, with shares ending down 3.9%. Moody’s now rates the bank at Baa1 from A2.
- Ford Motor (NYSE: F): Management has not seen any unusually aggressive incentives at dealers, a good sign that inventory is not building up dramatically and customers are still attracted to the product.
- National Oilwell Varco (NYSE: NOV): Following the Macondo blowout in the Gulf of Mexico, oil companies are hiring new rigs with redundant safety technologies in greater numbers. Analysts see this benefiting National Oilwell Varco, and expect the third quarter to be its highest bookings quarter ever, which already includes a $1.5 billion signing with Petrobras.
- Corporate Spending: Credit Suisse surveyed 60 large U.S. corporates and 40% said they expected to cut spending over the next six months. Not as negative as a recent survey the bank conducted in Europe.
- Operation Twist: The Fed’s plan to buy $400 billion in long term debt will likely have a negative impact on mortgage REITs, analysts believe.
- Autos: September seasonally adjusted annual rate of sales of 13 million, with bigger gains coming from retail than fleet sales. Sales are being driven by a broad range of autos, not solely the Japanese recovery.
- Economics: The Leading Economic Index grew to +0.3% growth for the next three to six months. Analysts were expecting a reading of +0.2% for the August reading. In July the reading came in at +0.5%
- Operation Twist: An active twist was not fully expected by the markets, and the magnitude was greater than many anticipated. The purchase schedule includes 32% in the 6-8 year sector, 32% in the 8-10 year sector, 4% in the 10-20 year sector, 29% in the 20-30 year sector and 3% in Treasury Inflation-Protected Securities (6-30 years).
- Brazil Infrastructure: Analysts estimate there are more than R$85 billion investments in the pipeline for the next four year. All 12 stadiums are under construction for the 2014 World Cup and projects are beginning for the 2016 Rio Olympics. Government expects airports in São Paulo, Campinas, and Brasília to be privatized next year, adding at least R$2.7 bn in investments.
- Bristol-Myers Squibb Company (NYSE: BMY): Sees new drugs boosting margins by 2016, when new products will account for an expected 69% of sales.
- Google (NASDAQ: GOOG): Global search query data was released yesterday and Google came out on top, once again, taking 68.7% of the market with 111.1 billion searches in August. That’s up 60 basis points year-on-year, mainly on the slide of Bing and Yahoo searches.
- Mosaic Company (NYSE: MOS): Mosaic will be added to the S&P 500 this Friday, to replace National Semiconductor. The move will boost share purchases by funds tracking the index
- Salesforce.com (NYSE: CRM): salesforce.com announced yesterday that it had purchased social help group Assistly for $50 million. Analysts see this as boosting sales potential without adding to sales costs.
- Hovnanian Enterprises (NYSE: HOV): Downgraded on declining book value. Analysts see Hovnanian facing difficulty raising capital through equity markets – capital structure and balance sheet driving under performance.
- New York Times Company (NYSE: NYT): Lowering earnings estimates to $0.03 for the quarter from $0.06 on an expected ad revenue decline of 8%. Circulation trends are holding up well.
- Pandora Media (NYSE: P): Following site relaunch and redesign in HTML5, Pandora removed all hour caps on listeners. This may have paying subscribers leave the service for the free version, but costs per track are lower for non paying listeners, so costs would decline as well.
- Standard Pacific (NYSE: SPF): Expected to post above average order growth into the second half of 2011. The company will continue to burn through cash on hand, but not dangerously and a revolver in effect will leave Standard Pacific with enough liquidity.
- First Solar (NASDAQ: FSLR): With Solyndra damage clouding entire clean field, First Solar may have difficulty receiving a loan guarantee on its Topaz project, which will increase loan costs by 1.5 to 2% Nonetheless, analysts assume two of its three projects will receive guarantees.
- Heinz (NYSE: HNZ): Recent purchases of Quero in Brazil and Foodstar in China should refocus earnings to emerging market exposure of 20 to 23% by 2013.
- Hewlett-Packard (NYSE: HPQ): HP’s board is expected to replace Apotheker as CEO with Meg Whitman. Jefferies sees this as a plus for the firm as new management will likely be more aggressive.
- Las Vegas Sands (NYSE: LVS): Morgan joins calls from Barclays, Deutsche Bank, Goldman and UBS with a positive stance on Las Vegas Sands, calling it the “strongest growth story in gaming and among the strongest consumer growth stories globally.” Ramp up in Singapore and Macau should drive EBITDA.
- Accenture (NYSE: ACN): Macroeconomic pressures are not impacting demand for products at Accenture. Forecasting revenue growth of 8.4% in 2012.
- Alexion Pharmaceuticals (NASDAQ: ALXN): Myasthenia gravis phase II trials went slowly, with 14 patients over 2 years. Phase III will be multinational and much larger. Management views drug sales at $500 million.
Meanwhile, stocks are getting killed.
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