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Wall Street Journal - Dow Jones News
by: kristy_kream (29/F/Venice, CA)
7/1/00 8:30 am
Msg: 166980 of 166981
Street Dismisses-2: Lehman Sees Compaq 2Q EPS At 21c
Dow Jones Newswires
McCarthy and Fortuna weren't the only ones to disagree with Salomon analyst Gardner.
Lehman Brothers Inc. analyst Daniel Niles put out a research note reiterating his buy rating on
Compaq, saying the company's second quarter is on track.
"We remain confident in our revenue and EPS estimates," said Niles in the note. "In general, we
believe that weakness in consumer (PC sales) is being counteracted by strong server and high-end
corporate sales."
Niles has a second-quarter earnings estimate of 21 cents a share for Compaq.
"Given the opportunity created by a competitor's downgrade, our expectations for a strong second
half, and statements from the company after the close, we would be aggressive buyers of the stock,"
Niles wrote.
He went on to say that he finds it "hard to believe" that Compaq would put out Thursday's press
release if it expected to post a weak second quarter, "given the legal ramifications that poor results
would surely create after this action by the company" so late in the quarter.
A.G. Edwards analyst Jimmy Johnson said Compaq is on a comeback trail and that channel
inventory is doing "really well."
Retail demand for PCs slowed down a little in the second quarter, he said, but that is always a
seasonally slow time for retail PC sales.
Johnson, who has a buy rating on Compaq, also agreed that the stock's decline is a good buying
opportunity.
At Wit SoundView, analyst Mark Specker said he routinely conduct checks into inventory levels. As
a result of his checks, he said, he didn't think inventory levels were "at all high" and, in fact, were on
the low side in most cases.
Specker is predicting that the stock price will climb because Compaq is doing very well.
Investors, however, remained dubious Friday. Shares were recently off 3/8, or 1.5%, at 25 3/8 on
volume of 21.2 million, compared with a daily average of 15.4 million.
Gardner nor Compaq officials were immediately available for comment.
Kristy:) |
