12:55 ET Restaurant Stocks : Profit warning issued this morning by Chuck E. Cheese parent, CEC Entertainment (CEC 43.52 -10.38), is leading to profit-taking in the restaurant sector. CEC blaming higher cheese and utility costs for its woes. Comments are dragging down other restaurant stocks, with particular pressure on names in the pizza segment:
SICOR Inc (SCRI) 17.15 +0.20: -Before the open- First Union Securities initiates coverage with a BUY rating and price target of $21; citing SCRI's niche therapeutic focus, vertical integration, and generic biopharmaceutical investment; SCRI's focus on generic injectable and oncology products should drive more sustainable profitability through limited competition; also, company's Active Pharmaceutical Ingredient business could deliver cost advantage to company's Finished Dosage Product business; believes SCRI's significant investment in generic biopharmaceuticals has not been reflected in the current stock price, and thus represents potential hidden value.
Salix Pharm (SLXP) 21.94 +1.69: -Before the open- First Union Securities initiates coverage with a STRONG BUY rating and price target of $26 based on optimism regarding the commercial prospects of Colazal (for ulcerative colitis) and rifaximin (for infectious diarrhea); longer-term growth strategy includes expanding the indications of Colazal and rifaximin, as well as in-licensing of additional development candidates.
I-many (IMNY) 16.70 +0.29: In morning note, Needham & Co initiates coverage with a BUY rating and price target of $21; believes company has significant opportunities for revenue growth and margin expansion; says I-many has established a stronghold in healthcare, and the addition of consumer products companies greatly increases intermediate term earnings visibility; firm forecasts near-term revenue growth at 80%, and longer-term, believes it can grow revenues at a 35-40% annual pace through mid-decade.
Footstar (FTS) 33.99 -1.31: In morning note, WF Van Kasper downgrades to MARKET PERFORM from BUY as a result of weaker-than-anticipated performance by Footstar's athletic division; Footstar reported disappointing same-store sales results for the month of May, with Meldisco's same-store sales down 1.6%, the athletic segment's same-store sales down 3.2%, and company's total same-store sales down 2.2%.
Concord Comms (CCRD) 7.00 +0.22: In morning note, Banc of America initiates coverage with a MARKET PERFORM; CCRD provides network, system and application performance and analysis tools; although firm's current FY01 revenue and EPS estimates of $90.3 mln and ($0.50) may prove conservative, firm remains cautious about the growth of CCRD's new products in a market that firm believes may consolidate rapidly in next 12-24 months.
Peregrine Sys. (PRGN) 28.74 +1.19: In morning note, Pacific Crest initiates coverage with a STRONG BUY rating and price target of $45; cites reasonable valuation and strong management team; also says Peregrine's products (1) reduce IT infrastructure costs; (2) maximize the life of existing assets; (3) enable B2B transactions; (4) have a relatively low cost; and (5) result in a quick ROI. |
