I would kiss her in a NY minute? Would you give Dan a kiss?
RESEARCH ALERT-Lehman reiterates buy on Compaq
NEW YORK, June 30 (Reuters) - Lehman Brothers analyst Dan
Niles on Friday reiterated his "buy" rating on Compaq Computer
Corp. <CPQ.N> saying "we remain confident on our revenue and
earnings per share estimates."
His comments helped boost the shares after the stock fell
nearly 4 points Thursday on Salomon Smith Barney analyst
Richard Gardner's downgrade of the stock to "buy" from
"neutral."
Following Lehman Brothers' comments and comments late
Thursday by Merrill Lynch analyst Steve Fortuna that there was
no change in his outlook, shares rose 15/16 on Friday to
25-7/16 on the New York Stock Exchange.
-- "In general, we believe that weakness in consumer is
being counteracted by strong server and high-end corporate
sales," Lehman's Niles wrote in a note to clients.
-- "Confirming some of our verbal comments yesterday
following a downgrade of the stock by a competitor, Compaq
stated after the market close that there have been no changes
to price protection terms and that channel inventory has been
low and in some cases stock out," the note said.
-- "Sales of consumer PCs at the low end are probably worse
than expected. However, consumer sales in mid to higher range
price points are as expected. Corporate sales have picked up
consistently since early March, especially in servers over the
past month. Unix servers are particularly strong, with Wildfire
tracking ahead of plan."
Merrill Lynch's Fortuna on Thursday afternoon also wrote a
note defending Compaq, saying that after speaking to the
company in relation to Gardner's downgrade, there was no
material change to guidance.
-- "We believe the quarter is a back-end loaded quarter.
There was some supply constraints in the early part of the
quarter," Fortuna wrote in the note to clients. "The
competitor's call was that Compaq extended price protection by
ten days and citing concerns over channel inventory. However,
we believe that the company is quite comfortable with inventory
levels as they stand in the channel."
-- "More importantly, they have not changed any of the
terms and conditions with respect to the channel."
-- "Corporate demand looks very solid. We believe it will
spike up in the second half of the year related to Windows
2000. Distribution checks are very solid in relation to
Compaq."
((--Nicole Volpe, New York Newsdesk (212) 859-1700))
REUTERS
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