Glenn, here comes the pimps again.
>NEW YORK, April 4 (Reuters) - Donaldson Lufkin Jenrette and Banc of America Securities on Tuesday initiated coverage of several online retailers with buy and market perform ratings.
DLJ analyst Jamie Kiggen started coverage of online grocery delivery service HomeGrocer.com Inc. <HOMG.O> with a buy rating.
No further information was available.
Banc of America analyst Tom Courtney initiated coverage of HomeGrocer.com with a buy rating and a 12-18 month target price of $16 and started another online grocer, Webvan Group Inc. <WBVN.O>, with a market performer rating.
Believes customers will embrace this distribution method.
Believes HomeGrocer.com's model can generate a strong return on invested capital at maturity.
Said HomeGrocer.com has "very strong management team, board and strategic partner in Amazon.com Inc. <AMZN.O>, which has a significant investment in the company."
Said that Webvan should be able to enter into other lucrative categories besides groceries with its entrance into the home and an established distribution network.
Believes that Webvan's "target single distribution center model can break-even in its fifth or sixth quarter of operation and generate strong return on invested capital as it matures."
Said Webvan's stock performance over the next 12 months depends on performance in the San Francisco Bay Area market and the company's ability to open distribution centers in new markets on time and within projected cost models.
Courtney initiated coverage of buy.com Inc. <BUYX.O> with a market performer rating.
Said "the company has an opportunity to become an Internet retailing powerhouse, and to be one of the few multi-category sites that achieves scale."
Expects the company, which sells items such as personal computers, software, consumer electronics, books and videos, to start raising prices and generate a positive gross margin.
Believes that consensus estimates are "quite conservative with upside" and expects buy.com to reach break-even well ahead of consensus estimates.
Courtney initiated coverage of Barnesandnoble.com Inc. <BNBN.O> with a buy rating and a 12-month price target of $15.
Said the company continues to build back-end infrastructure to provide excellent customer service and a strong overall customer experience.
Believes the company's "huge war chest" of about $550 million in cash and management's road map to profitability positions it as a leader in this market segment.
Shares of the online retailers were mixed in Tuesday morning trading on the Nasdaq. HomeGrocer.com shares were off 1/4 at 8-15/16, Webvan shares were up 3/16 at 7-11/16, Buy.com shares were off 7/16 at 8-1/8 and Barnesandnoble.com shares were up 1/16 at 10.
10:42 04-04-00 |
