MARKET TALK: La-Z-Boy's Stock Not Seen Reclining
15 Feb 16:19
Edited by George Stahl
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
4:18 (Dow Jones) La-Z-Boy's restructuring has helped propel the stock up 50%
from its September lows, and the stock's rise may not be over yet says Merrill
Lynch. "There is considerable upside to the earnings power that could be
generated by this well-recognized consumer branded company." The firm upgrades
the stock to near-term buy from neutral. LZB shares ended the week at $23.12.
(GS)
4:01 (Dow Jones) The week ended on a sour note as investors got out of any
stocks they felt uncomfortable holding over a three-day weekend. Pick your
reason: Accounting concerns, threat of terrorism during the Olympics, the war
in Afghanistan, the Canadian pair getting a gold medal, etc. DJIA and Nasdaq
ended near their lows. DJIA (preliminary) down 98 at 9904, Nasdaq off 38 at
1805, S&P 500 lost 12 to 1104. (GS)
3:40 (Dow Jones) A late-day selloff is sending the DJIA and Nasdaq to new
lows for the day. The question no longer is Dow 10000 but Dow 9000. Volume has
slowed, as you might expect, ahead of a three-day weekend, but what is still
trading is driving the averages lower. (GS)
3:17 (Dow Jones) "The recent weakness in shares of Sprint PCS (PCS) is
related to debt qwestions (not a typo)," Raymond James writes, and "we believe
the debt qwestions surrounding Sprint PCS are overblown." The firm sees no
funding needs at PCS in 2003, and "PCS should have access to plenty of debt to
fund its needs in 2002." Sprint PCS shares are losing 10% to $9.16. (GS)
2:55 (Dow Jones) Stilwell Financial's (SV) re-equification plan for Janus
"should be generally viewed positively as it should help reduce lingering
corporate governance issues," says Merrill Lynch, which raises the company to
long-term buy. "Still, we suspect this news is mostly discounted given SV has
provided information on this issue for nearly six months." That may be one
reason why the stock is off 5.5% to $24.55. (GS)
2:39 (Dow Jones) Merrill Lynch downgrades Vintage Petroleum (VPI) to
near-term reduce/sell because of its 58% debt level, Argentinean exposure,
disappointing results from the Genesis acquisition and a shrinking
EBITD/Interest coverage ratio. Earlier, UBS Warburg reduced the stock to hold
on similar reasons and lowered its liquidation value estimate to $11 from $18.
VPI shares are losing 11% to $9.60. (GS)
2:26 (Dow Jones) Wells Fargo downgrades Boeing (BA) on valuation. "While we
maintain our view that the stock is undervalued relative to its long-term
earnings prospects, we believe that the near-term upside potential may be
somewhat limited at current price levels." The firm's 18-month price target
remains $50-$60 but says the stock could trade up to about $70 "once the
commercial airplane markets recover, however, that is likely 2-3 years out."
Boeing shares up 2c to $44.79. (GS)
2:14 (Dow Jones) Merrill Lynch, based on its recently revised FY02 EPS
estimate, lowers its valuation of Tyco's sum of the parts to $60-70/share from
$70-80. "While the shares may remain volatile in the near term, we believe that
significant value will be created through the break-up process." The firm also
adds this obvious advice, "Negative news flow could continue to hinder TYC's
shares." Merrill keeps Tyco (TYC) at strong buy. TYC shares adding 89c to
$27.64. (GS)
2:04 (Dow Jones) The Florida Attorney General has begun an investigation into
claims that J.C. Penney's (JCP) Eckerd drugstore chain bilked customers on
prescriptions by rounding up to higher whole numbers odd-size volumes for
liquid prescriptions, then inflating bills accordingly. The investigation
appears to focus on allegations in a lawsuit filed Feb. 1, which claims more
than $100M in overcharges. Eckerd CEO Wayne Harris said last week that while
limitations in Eckerd's computer systems had forced it to print labels that
reflected rounded-up prescription volumes, customers were always billed for the
lower, odd-size amount. Florida officials, however, are looking into whether
Eckerd had charged customers "for the amount shown on the label not the lesser
amount contained in the package," according to state records. (JMC)
1:56 (Dow Jones) As stocks slip Friday, defensive puts are trading heavily in
the options market as investors seek downside protection. At the CBOE, the
ratio of equity puts traded to calls most recently exceeded the rare 1.0 mark
to reach 1.04, compared with 0.67 Thursday and 0.60 Wednesday. Although well
above the 0.75 mark contrarians consider to be sending a bullish signal, some
traders discount it due to today's robust trading as February options expire.
The index put/call ratio at the CBOE is at 1.59. (KT)
1:46 (Dow Jones) In a pre-holiday mood, the euro has fallen back close to its
NY opening levels, while the yen continues to go nowhere. EUR is $0.8717;
USD/JPY is Y132.60; EUR/JPY is Y115.63. (JRH)
1:37 (Dow Jones) Sanders Morris Harris cuts earnings estimates on Precision
Drilling (PDS). "The timeline for production of the company's digital logging
while drilling . . . tools has slipped another quarter due to delays in the
development and testing program," Sanders Morris Harris says. "As a result, we
do not expect these tools to deliver any incremental operating income until
2003." Precision Drilling shares are off 1%. (GFC)
1:17 (Dow Jones) September Eurodollars close with strong gains, up 11 bps at
97.34. Market closed early in an abbreviated session ahead of the long weekend,
and it will be closed on Monday for the President's day holiday. (SPC)
1:02 (Dow Jones) With three hours to go until stock trading ends and the long
weekend starts, major stock-market indexes are still in the red. The Dow Jones
Industrial Average is down 0.4%, and the Nasdaq Composite Index is off 1.8%.
(GFC)
12:55 (Dow Jones)J.P. Morgan H&Q lifts its 12-month share price target to
$45 from $40 on Adobe Systems (ADBE). The move was made "as we approach the
Photoshop launch, which we believe to be the major catalyst in the new cycle to
drive bigger and more powerful quarters," the firm said. Adobe shares,
meanwhile, are off 70 cents at $36.31. (GFC)
12:41 (Dow Jones) Raymond James believes there is "significant value" in U.S.
Cellular (USM) shares, now trading at $36.40, compared with the firm's $54
target price. But short-term - think six months - catalysts that would push the
stock price higher "are difficult to project at this time," said analyst Ric
Prentiss, in downgrading U.S. Cellular shares to buy from strong buy. (GFC)
(END) DOW JONES NEWS 02-15-02
04:19 PM |
