StarMedia Ntwrk (STRM) 1.91 +0.09: Goldman Sachs downgrades Internet media company targeting Spanish and Portuguese speaking markets to MARKET PERFORM from MARKET OUTPERFORM to reflect slower expected growth in the online ad market in Latin America and reduced visibility; although firm is encouraged by STRM's announced cost cutting initiatives (25% workforce reduction), firm cautions that STRM could be challenged to maintain its market presence and generate 18% revenue growth in 2001 in light of continued competition from deep-pocketed competitors.
Cabletron Sys (CS) 18.35 +0.60: UBS Warburg initiates coverage with a BUY and a price target of $21; believes Cabletron provides telecom investors with an attractive opportunity of short-term investment appreciation, as well as long-term growth; as a holding company for four highly-focused on different telecommunications market subsidiaries (Enterasys, Riverstone, Aprisma and GNTS), Cabletron is trading at 30-35% discount to its projected fair market price; expects Cabletron stock to continue to gain strength in anticipation of the spin-off of its operating units.
Crown Castle (CCI) 18.91 +0.41: JP Morgan initiates coverage with a BUY and an 18-month price target of $37; CCI is a leading global tower operator with strong tower footprints in the US, UK, and Australia; says company's is leading provider of turnkey wireless solutions including transmission of wireless signals.
American Tower (AMT) 24.25 delayed: JP Morgan initiates coverage with a BUY and an 18-month price target of $43 as firm expects strong growth in the industry from an increase in wireless subscriber usage, collocation activity, the provision of full suites of service, and international expansion; as a leading tower operator in the US and Mexico with more than 4,000 of its sites in the top 50 U.S. markets, AMT is creating strong urban clusters, and is also the leading provider of wireless infrastructure in Mexico, a rapidly emerging wireless market; expects AMT to use Mexico to launch its Latin American expansion.
BEFORE THE OPEN (Updated throughout the hour)******
Retek (RETK) 30.94: Provider of software solutions and services to the retail industry issues upside preannouncement for Q2, expecting EPS above the current First Call EPS estimate of $0.00; see press release.
FuelCell Energy (FCEL) 80.30: Friedman Billings downgrades to ACCUMULATE from BUY as stock price stock has surpassed firm's target of $75; says the much publicized debate on energy public policy coupled with the ongoing power crises in California bode well for energy technology stocks and may continue to fuel upside momentum; expects results from 2Q to be announced by end of May, and looks for FCEL to provide an update on its progress relating to the build out of their new manufacturing facility, results from various field trials, and commercialization plans.
CacheFlow (CFLO) 8.40: Wedbush Morgan downgrades to long-term ATTRACTIVE from BUY as company's guidance for flat revenue next quarter leaves firm with little confidence that CFLO shares can continue their recent run in the short-term; management also expects a return to moderate growth in the second half of the year; firm says company remains well positioned to benefit from anticipated strong growth in caching market, and would use price weakness to establish positions.
Tyco Intl (TYC) 55.70: Diversified manufacturing and service company announces that it has entered into a definitive agreement with Cambridge Protection Industries, L.L.C., to acquire its electronic security systems businesses, which includes SecurityLink, and provides services to approximately one million residential, commercial and government customers, for approximately $1 bln; see press release.
AnnTaylor (ANN) 36.40: Bear Stearns upgrades to ATTRACTIVE from NEUTRAL; believes that the bad news at ANN is out and recognizes that a turn in results may not be evident for at least 6 months; however, with two new senior management members in place and the stock trading at a significant discount to its branded retail peers, believes that the risk-reward ratio for investors with at least a 12-month time horizon is attractive.
Arena Pharma (ARNA) 27.20: ABN AMRO initiates coverage with a BUY rating and price target of $40; says sound business model underpins ARNA's technology; ARNA sells (Constitutive Activated Receptor Technology)CART-modified receptors to drug discovery partners, and is entitled to milestone payments; ARNA can also participate on the downstream end through royalties on drug sales; company has established a number of validating CART deals, which have allowed it to reach profitability.
Venator Group (Z) 13.80: Specialty athletic retailer reports Q1 earnings of $0.23 a share, in line with the First Call consensus, vs year-ago earnings of $0.17; revenues rose 3.8% to $1.05 bln from a year-ago of $1.02 bln; company is comfortable it can achieve adjusted EPS in second quarter 2001 of $0.12-$0.14 (First Call estimate $0.13), and sees full year 2001 of $0.90-$0.94 (First Call estimate $0.94); see press release.
Biogen (BGEN) 60.28: ABN AMRO initiates coverage with a ADD rating and price target of $80; as a reasonably priced biotech concern with an emerging pipeline, firm sees Biogen as a good long-term value for biotech investors; after a number of years, Biogen's pipeline will finally produce a new product, Amevive, and with a filing for product approval expected this summer, Amevive could become a meaningful product for treating psoriasis; firm expects this drug to contribute to meaningful sales in 2003.
Foundry Networks (FDRY) 19.28: UBS Warburg initiates coverage with a HOLD and a 12-month price target of $20; believe FDRY's "best-of-breed" networking technology and one of the best price-performance ratios in the industry will position the company to benefit from the rapid build-out of the next-generation metro access optical networks, proliferation of content-aware intelligent networking, and the next upgrade cycle to Layer 3 Gigabit Ethernet in the enterprise markets; however, at its current price, believes company is trading at a fair value.
Extreme Networks (EXTR) 33.66: UBS Warburg initiates coverage with a HOLD and $35 price target; firm views EXTR as a key long-term holding for enterprise networking investors, but believes the stock is currently fairly valued; believes that Extreme will be the major beneficiary of the next technology upgrade cycle in the enterprise market and the proliferation of Ethernet in the metro access networks of service providers.
Informatica (INFA) 17.84: Goldman Sachs initiates coverage with a MARKET OUTPERFORM; expects INFA to continue to invest more in development while improving operating efficiency throughout the rest of FY01; relative to its comparable group, INFA is trading near the high-end of the range, and firm believes company deserves a premium valuation given its strong growth, competitive position, and operating leverage.
Kmart Corp (KM) 10.13: Reports Q1 loss of $0.02 a share, $0.05 better than the First Call consensus of ($0.07), vs year-ago earnings of $0.06; revenues rose 1.7% to $8.34 bln from a year-ago of $8.20 bln; says results were highlighted by positive trends in same-store sales, merchandise in-stock position, and customer service. "These results are in-line with our plan to fix our business by taking decisive, aggressive, and focused steps to transform our company," said CEO.; see press release.
CIENA Corp (CIEN) 58.90: Reports Q2 earnings of $0.20 a share, $0.04 better than the First Call consensus of $0.16, vs year-ago earnings of $0.06; revenues rose 129.1% to $425.40 mln from a year-ago of $185.68 mln. Company expects to achieve 2001 revenue growth of between 95%-105% and meet current consensus range of $0.72-$0.75 (mean $0.73), provided that company continues to successfully execute and macro economic conditions do not change dramatically; see press release.
Art Tech Grp (ARTG) 9.41: Banc of America Sec downgrades to MARKET PERFORM from BUY due to concerns over company's long term strategy and position in the market; believes that ARTG is moving away from its core market into a fragmented and competitive market with a complex message, placing too much emphasis on the importance of partnerships with hardware vendors.
Citigroup (C) 51.79: Company announces major acquisition of Grupo Financiero Banamex-Accival (Banacci), Mexico's top financial institution for $6.25 bln in cash and another $6.25 bln in Citigroup stock; total value of $12.5 bln; Citigroup expects the transaction to be accretive to earnings in the first year; see press release. |
