CNET | News | Hardware | Downloads | Builder | Games | Jobs | Auctions | Prices | Tech help Free email
Search
All CNET The Web
CNET : News : Investor : Brokerage Center : All News
DJIA 10317.20 -178.00 NASDAQ 2074.74 -77.09 S&P 500 1215.55 -24.39 CNET TECH 1714.08 -44.39
Enter symbol Fast Quote, News & more... Real-Time Quote Detailed Quote Messages Profile Charts News Broker Reports Buy/Hold/Sell Upgrades Downgrades Splits Momentum Ratings · Symbol Lookup
· Full Site Map
Great Prices!
Tech News | Market Update | My Portfolio | Brokerage Center | IPO Center | Splits | Messages | Free Real-Time Quotes
Merrill Lynch Investment Highlights for 3/1/01
03/01/01 08:57 AM
Source: Merrill Lynch
Investment Highlights:
Visit the CNET Brokerage Center for daily reports from the top Wall Street analysts.
Broadcom Corp
We are lowering our investment opinion from Accumulate/Buy to Neutral/Buy due to a worsening inventory and demand environment.
We are lowering our 2001 EPS estimate from $1.52 to $1.24 and our 2002 EPS estimate from $2.11 to $1.82.
3COM Corp
Yesterday, we cautioned that we saw risk to 3Com's 3Q01 results and projections for the balance of this year and next. Last night, the company pre-announced a 3Q miss that was far wider than we had imagined possible.
3Q revenues are now expected to be $625 - $640 million, below company targets of $725 - $750 million and our estimate of $740 million. In reviewing our model, we thought a worse case scenario was more like $710 million.
With the lack of visibility across the business and the recurring execution issues, we are reducing our intermediate term investment opinion to Neutral from Accumulate.
We are also lowering our long-term growth rate to 15% from 25% and changing our risk rating to "D' from "C".
Airlines
Last night, Northwest (NWAC; $22; D-2-1-9) and KLM (KLM; $24.13; C-3-2-7) announced that effective today, they will eliminate commissions paid on online bookings for U.S./Canada point-of-sale travel.
Previously, Northwest paid online travel agents a 5% commission, although it was capped at $10. The savings for Northwest are meaningful.
Circuit City (CC, $15.17, C-3-3-7)
Lowering 01E from $0.71 to $0.70; Lowering 02E from $1.00 to $0.70
Best Buy (BBY, $40.96, C-1-1-9)
01E $1.78; 02E $2.10
Circuity City reported that they continue to see weakness in their January and February business. We are lowering our EPS estimates for CC for 2001 from $0.71 to $0.70. We are lowering our 2002 EPS estimate from $1.00 to $0.70.
We do not believe that this weakness in Circuit City sales can be translated into weakness at Best Buy for four reasons.
Dial Corp.
Dial CEO Herb Baum presented to our ML Global Branded Goods Conference in NYC.
DL remains committed to improving its core business units (detergent, bar soap, air fresheners, and canned meat) and divesting non-core or unprofitable businesses.
We reiterate our Accumulate opinion on the shares of DL, trading at 23.5X our ༽ EPS.
BF Goodrich (GR; $40.44; B-3-2-7)
01E $3.40; 02E $3.80
BF Goodrich completed the sale of Performance Materials to AEA Investors for approximately $1 billion in cash and $172 million in debt securities. These proceeds are broadly in line with our expectations. The company announced that it would retire $800 million in short terms debt and $175 million in longer term debt maturing in July 2001.
Semiconductors for Communications
Taking a meat cleaver to the numbers
Our channel checks indicate that the large communications equipment vendors continue to cancel and push out orders. Due to these checks, high inventory levels and a weak demand environment, we are lowering our revenue and EPS estimates on the comm-IC sector.
We are also lowering our five-year estimated EPS growth rates for the sector.
We are lowering our investment opinion on Broadcom's (BRCM; $49.25; C-3-1-9) stock from an intermediate/long term Accumulate/Buy to Neutral/Buy.
Our top picks coming out of the inventory correction include AMCC ($26.75; D-2-1-9), TXCC ($20.06; C-2-1-9) and VTSS ($39.44; C-2-1-9), due to their exposure to the MAN, and to new programs ramping in Europe.
Limited (LTD; $17.65; B-3-2-7 to B-3-1-7)
01E$0.97; 02E$1.05
Raising Long Term Rating; Restructuring News is a Step in the Right Direction
We are upgrading Limited from a long-term Accumulate to Buy (No change in intermediate term neutral rating) reflecting the following key points: 1)Proposed integration of Structure into Express should yield the best long term reward 2)Planned sale of Lane Bryant disposes of a non-core asset and 3) This gives us a higher degree of confidence that Limited can generate high teens long term growth.
Limited's 4th Qtr EPS of $0.55 was in line with our estimate.
Maintaining Cal2001 (Jan02) of $1.05 and Cal2002 of $1.25. We believe the earnings impact from the restructuring will not be visible until next year.
Cardinal Health Inc.
We are reiterating our intermediate-term Accumulate, long-term Buy rating and raising our 12 - 18 month price objective to $125 from $105, which assumes CAH can trade at 30x our C2002E of $4.12. Note that CAH is currently trading at 30x our C2001E of $3.40.
Dial Corp.
Dial CEO Herb Baum presented to our ML Global Branded Goods Conference in NYC.
DL remains committed to improving its core business units (detergent, bar soap, air fresheners, and canned meat) and divesting non-core or unprofitable businesses.
We reiterate our Accumulate opinion on the shares of DL, trading at 23.5X our ༽ EPS.
[BRCM] MLPF&S was a manager of the most recent public offering of securities of this company within the last three years.
[BRCM] The securities of the company are not listed but trade over-the-counter in the United States. In the US, retail sales and/or distribution of this report may be made only in states where these securities are exempt from registration or have been qualified for sale. MLPF&S or its affiliates usually make a market in the securities of this company.
Opinion Key [X-a-b-c]: Investment Risk Rating(X): A - Low, B - Average, C - Above Average, D - High. Appreciation Potential Rating (a: Int. Term - 0-12 mo.; b: Long Term - >1 yr.): 1 - Buy, 2 - Accumulate, 3 - Neutral, 4 -Reduce, 5 - Sell, 6 - No Rating. Income Rating(c): 7 - Same/Higher, 8 - Same/Lower, 9 - No Cash Dividend.
Copyright 2001 Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). All rights reserved. Any unauthorized use or disclosure is prohibited. This report has been prepared and issued by MLPF&S and/or one of its affiliates and has been approved for publication in the United Kingdom by Merrill Lynch, Pierce, Fenner & Smith Limited, which is regulated by SFA; has been considered and distributed in Australia by Merrill Lynch Equities (Australia) Limited (ACN 006 276 795), a licensed securities dealer under the Australian Corporations Law; is distributed in Hong Kong by Merrill Lynch (Asia Pacific) Ltd, which is regulated by the Hong Kong SFC; and is distributed in Singapore by Merrill Lynch International Bank Ltd (Merchant Bank) and Merrill Lynch (Singapore) Pte Ltd, which are regulated by the Monetary Authority of Singapore. The information herein was obtained from various sources; we do not guarantee its accuracy or completeness. Additional information available.
Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities ("related investments"). MLPF&S and its affiliates may trade for their own accounts as odd-lot dealer, market maker, block positioner, specialist and/or arbitrageur in any securities of this issuer(s) or in related investments, and may be on the opposite side of public orders. MLPF&S, its affiliates, directors, officers, employees and employee benefit programs may have a long or short position in any securities of this issuer(s) or in related investments. MLPF&S or its affiliates may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any entity mentioned in this report.
This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance.
Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk.
Information contained on this page is provided to CNET directly from the investment firm cited in this report.
Also from CNET Networks
• How Does Your Web Connection Stack-up
• This Week's Featured Comparison: Handhelds
• Enterprise Security Threats
• Compare DSL Providers in your Area
• 5 Phones with Sex Appeal
Quote Snapshot
BRCM 43.50 -5.75
COMS 7.13 -2.00
CC 14.76 -0.41
DL 13.89 -0.18
GR 39.09 -1.07
AMCC 25.31 -1.44
· Real-Time Quotes
· Messages
Enter symbol:
· Symbol Lookup
Quotes delayed 20+ minutes
Trade Now
with our broker sponsors
Latest Reports
Merrill Lynch reports for 3/1/01
Merrill Lynch reports for 2/28/01
Merrill Lynch reports for 2/27/01
Investor Dispatch:
HTML edition
Investor Dispatch
News.com Dispatch
All Newsletters
More from CNET Investor: Market Update | My Portfolio | Brokerage Center | IPO Center | Splits | Message Boards
CNET Services: Auctions · Check Latest Prices · Data Services · Downloads · Enterprise Business · Find a Web Host · Find an ISP · Free Newsletters · Gadgets · Games · Hardware · Help & How-Tos · Latest PCs · Media Productions · News · Publish Your Opinion · Search · Stock Quotes · Tech Jobs · Web Building · mySimon · All Services
Corrections | How to advertise | Join CNET's Affiliate Program | Support About CNET
Back to top
Copyright 1998-2001, Bloomberg L.P. All Rights Reserved. The information herein was obtained from sources which Bloomberg L.P. and its suppliers believe reliable, but they do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any securities or commodities.
Market data from Please read the terms of use for this information.
Quotes are delayed 15 minutes for Nasdaq, 20 minutes otherwise (except on designated real-time quote page).
Questions? Comments? Contact us at investor@news.com
Copyright ©1995-2001 CNET Networks, Inc. All rights reserved. Privacy policy. |
