MARKET TALK: A Hearty Buy Rating For Pfizer
24 Jan 12:08
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
12:07 (Dow Jones) Pfizer (PFE) has the group-leading potential of 20% near-
and long-term EPS growth, Robertson Stephens says, because of "an excellent
sales force, a solid stable core of marketed drugs and few near-term patent
expirations. We heartily recommend PFE shares as a core holding for healthcare
investors, especially with PFE shares trading only at a modest 12% premium to
the drug group's 23x average P/E multiple." The firm reiterates its buy rating.
Shares up 0.2% at $41.91. (GS)
11:45 (Dow Jones) Greenspan's testimony highlights what could be a potential
problem in the U.S. economy: service business, like Enron (ENRNQ), that don't
depend on plants and hard physical assets, instead depend on trust. But that
trust can evaporate quickly when things turn bad, because so much of the firms'
value rests on perception. Is he highlighting what could be a growing issue
over the years ahead? (MSD)
11:35 (Dow Jones) EMC's revenue may have fallen 42% from a year ago, but the
company's 4Q earnings results, which beat Wall Street expectations, is further
evidence the storage market bottomed in the 3Q. "EMC saw great seasonal
improvement in the 4Q," says Bill Lewis, an analyst at J.P. Morgan. "EMC is
talking about normal seasonal patterns (in the 1Q). Clearly business has hit a
bottom and now it's the normal progression in a tough economic environment."
While IT spending in 2002 is expected to be flat, analysts, including Lewis,
anticipate spending in the networked storage market. Lewis said there could be
growth in spending of about 10% to 20% this year. Companies that would benefit
include EMC, Emulex (EMLX), Brocade Communications (BRCD), McData (MCDT), and
Network Appliance (NTAP). (DLF)
11:25 (Dow Jones) Greenspan acknowledged this his Jan. 11 speech missed the
mark and with today's remarks, "I tried to rectify that." He added that "the
markets have been assuming a far more rapid snapback than I think is likely to
happen." (MSD)
11:19 (Dow Jones) UBS and Merrill the latest in camp that says Fed will not
move Wednesday. Merrill's Bruce Steinberg cites balanced testimony from
Greenspan, and adds that while we have probably seen the end of the easing
cycle, he doesn't look for a tightening before late summer. (TG)
11:12 (Dow Jones) Glenn Renwick, Progressive Corp.'s (PGR) chief executive,
expects additional premium growth in 2002 in the insurer's commercial auto and
special lines - motorcycle and boats. Renwick noted on a conference call that
Progressive has become the largest insurer of motorcycles in the U.S., with a
25% market share. (CUB)
11:05 (Dow Jones) J.P. Morgan raises DuPont (DD) to buy because of valuation
and "the increasing signs of stabilizing sales volume." The firm suggests a $50
target price, as "demand begins to improve and DuPont makes progress divesting
some of its deteriorating business such as apparel fibers." J.P. Morgan also
thinks DD will eventually become the large-cap chemical stock of choice over
Dow Chemical (DOW) because of Dow's asbestos product liability. Shares up 3.3%
at $42.65. (GS)
10:59 (Dow Jones) J.P. Morgan Chase now says the Fed will hold steady at
1.75% next Wednesday, backing away from an expectation of a rate cut. (MSD)
10:56 (Dow Jones) TXU Corp. (TXU) expects to incur a charge of about $55
million in the quarter ended Dec. 31, 2001, as a result of a recent settlement
with the Texas Public Utility Commissions to resolve issues related to TXU's
transition to competition. The after-tax charge is expected to be accounted for
as an extraordinary item. TXU filed the settlement plan with the commission on
Dec. 31. If approved, it would resolve all major pending issues related to TXU
Electric's transition to competition and would supersede certain ongoing
proceedings that principally are related to deregulation. Shares up 0.2% at
$48.23. (DL)
10:50 (Dow Jones) What happened to fiscal bonanza of yesteryear? Greenspan
cites tax cuts, weakening in economic activity, and sharp decline in stock
prices, as well as stock price swoon exerting more downward pressure on
corporate tax receipts and increased spending for defense, homeland security,
unemployment benefits and other cyclically sensitive programs as developments
that "have reversed part of this fiscal bonanza." (JCC)
10:35 (Dow Jones) DJ-BTM Barometer was up 0.2% in latest week, its second
straight increase and an indication that the economy's is putting in a bottom.
That conclusion is further enhanced by the less volatile smoothed index, which
was up 0.7%, its third straight gain. Still, seven of the ten components
pointed downward, suggesting that the improvement is far from broad-based. (MC)
10:31 (Dow Jones) Lehman Brothers is now looking for no rate cut from the Fed
on Jan. 30. But economist Drew Matus says the speech, with its economic
optimism punctuated by caution, is not all bad for the bond market: given his
comments that go against new spending, Greenspan doesn't seem to be on board
for fiscal stimulus of the scale that either party is talking about. (SV)
10:21 (Dow Jones) Sure, Greenspan is positive on signs of stabilization, but
his concern about a potential "short-lived" rebound suggests he still wants to
have it both ways. Therein lies the specter of a double dip: if we don't get a
pickup in long-term business investment beyond that needed to boost
inventories, we won't get sustained demand...the whole thing could fizzle out
quickly. (MC)
10:13 (Dow Jones) Stocks were strong to begin with, and got stronger after
Greenspan text released. Firmish tone (at least in today's terms) from big tech
names lends support, and Greenspan comments seen bullish for economy (though he
is questioning sustainability for now). DJIA up 111 at 9841, Nasdaq Comp up
another 30 to 1952 after nice rally Wednesday, and S&P 500 climbs 9 to 1136.
(TG)
10:06 (Dow Jones) Greenspan is attempting to preempt what will likely be a
tough line of questioning on his tax cut position of a year ago. Some analysts
are looking for much of the question and answer period to be dominated by this
subject. (MSD)
10:05 (Dow Jones) The Fed chairman's remarks are pretty much meeting
expectations, in that he's saying there are risks to what appears to be a
stabilizing economy. This view is likely to bring the consensus firmly toward
expectations the FOMC will keep its easing bias but hold rates steady next
week. (MSD)
10:01 (Dow Jones) Greenspan's speech is again noting the risks to the
economy, although he does say "there have been some signs recently that some of
the forces that have been restraining the economy over the past year are
starting to diminish and that activity is beginning to firm." (MSD)
10:00 (Dow Jones) Greenspan says he sees signs the U.S. economy is
stabilizing after more than nine months of recession, but he warned that a
sustained economic recovery isn't yet in sight. (FL)
(END) DOW JONES NEWS 01-24-02
12:08 PM |
