MARKET TALK: Outlook Cuts Into VeriSign Shares
25 Jan 14:19
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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2:18 (Dow Jones) VeriSign (VRSN) shares are off 7% after reporting in-line 4Q
results but lowering its 2002 outlook. Thomas Weisel analyst Tim Klasell cut
his rating to attractive from buy and reduced his 2002 estimates. He cited
weakness in VeriSign's mass markets unit, which includes the domain-name retail
business. He also cut his price target to $40 from $65. On the other hand, Bear
Stearns analyst Chris Kwak was "heartened" by VeriSign's cash flow, which rose
from 3Q. He also boosted his 2002 earnings view, but mostly because he'll now
factor in a lower tax rate. (PDL)
2:10 (Dow Jones) Entrepreneurs continue to gravitate toward sectors poised to
benefit from technological and regulatory changes, a survey from vFinance.com
(VFIN) shows. The utilities industry, powered by a surge in interest in
alternative energy, showed a 140% jump in entrepreneurial activity in December
compared to November. That was followed by the metals and mining industry, with
a 100% increase, and materials and construction, which rose 75%. For the fourth
straight month, the computer software and services industry remained the most
popular market segment for entrepreneurs seeking funding. But the sector showed
a 25% decrease in activity from November, and a 32% drop from its October peak.
(JAW)
1:58 (Dow Jones) For investors hoping that Nortel's (NT) new HDX optical
switch, which is in customer trials, would start to bolster the firm's network
business later this year, think again. HSBC analyst Paul Howbold believes that
Lucent (LU) is set to officially launch next week its new Lambda Unite optical
switch, making for an increasingly competitive market. Ciena's (CIEN)
Coredirector is the market leader and Alcatel (ALA) also sells a competing
product known as the 1680 OGX. In this environment, Howbold advises "investors
to temper expectations of a major HDX sales ramp" in the second half of the
year. (BED)
1:46 (Dow Jones) Robert Trumka, secretary-treasurer of AFL-CIO, urges
chairman of Motorola (MOT) nominating committee that Ronnie Chan not be
renominated to another term as a Motorola director unless Chan, who's also an
Enron (ENRNQ) director, "can show he personally took meaningful steps to
protect Enron investors." (JCC)
1:37 (Dow Jones) Lazard Freres analyst James Winchester raised his price
target on Royal Caribbean Cruises (RCL) to $19 from $16, while maintaining his
hold rating. The increase was based on the probability of a merger with P&O
Princess Cruises (POC), he said. The analyst also narrowed his 4Q loss
projection to 16 cents from 22 cents, and raised his 2002 earnings estimate to
84 cents a share from 65 cents. RCL up 2% at $17.81. (DDO)
1:24 (Dow Jones) Bankers say they still plan to bring the Alliance Medical
IPO next week, but what the offering looks like will likely change. Talk is
that Alliance is readying a new filing with the SEC and that the price terms of
the deals will be reduced. As it stands, Alliance is trying to sell 4 million
shares at between $14 and $16 a share through UBS. (RJH)
1:09 (Dow Jones) To reach its goal of $6.6 billion in cash flow over six
years, Eastman Kodak (EK) would have to see 12% annual earnings growth beyond
2003 - a target that Salomon Smith Barney analyst Jonathan Rosenzweig found
"hard to swallow." He also doubted that Kodak could realize low-to-mid-single
digit growth at its conventional film and camera businesses, considering that
those operations are "most subject to cannibalization" by digital products. He
kept his neutral rating and 12-month price target of $30 on the stock. Shares
up 1.7% at $28.73. (DDO)
12:53 (Dow Jones) Mirroring the stock market's plunge and the downturn in the
economy, 25% fewer entrepreneurs sought funding in 2001 comparedto 2000, a new
survey from vFinance.com Inc. (VFIN) shows. "Entrepreneurial sentiment seems to
be in lockstep with the Nasdaq," says Dave Spector, a vice president with the
financial services company. "It really shows that a lot of entrepreneurs are
looking at cashing out via an IPO." (JAW)
12:46 (Dow Jones) It seems like deja vu. RSA Security's (RSAS) CEO mentioned
in passing during Thursday's 4Q conference call the company is under formal SEC
investigation. But RSA failed to include this important bit of information in
its 4Q press release. And what does the investigation concern? The SEC appears
to be looking into whether the company should have disclosed an accounting
change last year in a press release, instead of waiting until later and
mentioning it in a requlatory filing. The probe also concerns trading in the
company's securities. The stock is down 30%. (RS)
12:35 (Dow Jones) Stocks acting pretty well, led by some old economy groups -
chemicals, metals, railroads and insurance are on top. Honeywell and DuPont are
on top of DJIA, and Nasdaq Comp just turned positive. SOX up 2.3%,and Intel is
moving higher. DJIA up 93 to 9889, Nasdaq gains 1 to 1943, and S&P 500 adds 5
to 1137. (TG)
12:23 (Dow Jones) If the economy recovers, food stocks are unlikely to
outperform the market. That's part of the reason why Goldman food analyst
Romitha Malley lowered her investment opinion on the entire packaged foods
sector Friday to market weight from market overweight. Slowing earnings growth
and "less compelling" valuations also were factors. But given that Goldman's
economists now expect the economy to recover sooner than they first thought,
that really does not bode well for food stocks, which historically "thrive in a
recession," notes Malley. "We believe that some exposure to food stocks is
still warranted since there is enough uncertainty in the world to warrant some
caution." Her top picks are Kraft (KFT) and Sara Lee (SLE). (CEG)
12:12 (Dow Jones) Sen. Jean Carnahan, D-Mo., is proposing legislation in
response to Enron (ENRNQ) mess to require information about sales of company
stock by executives of publicly traded corporations to be filed electronically
and made available instantly to the public via the Internet. (JCC)
11:59 (Dow Jones) Hold the paper shredder! Now we know who has a bit more
pull among paper investors between Salomon Smith Barney and Deutsche Banc, at
least today. In a duel, Salomon upgraded Georgia-Pacific (GP) while Deutsche
Banc downgraded. The stock is up almost 9%. Two things in Salomon's favor:
Investors are likely still pleased with GP's asbestos disclosure yesterday and
the overall market is higher, pulling up all the cyclical paper stocks. (CCW)
11:51 (Dow Jones) Alcan (AL) execs did a good job controlling costs and
managing cash flow in response to depressed aluminum demand and prices that
plagued 2001, Lehman says. When economy rebounds, Lehman expects demand for
aluminum to be very strong, as buyers have significantly reduced inventories
during recent downturn. Keeps buy rating, valuation attractive. (TG)
11:29 (Dow Jones) ABN-Amro trims Qualcomm (QCOM) target to $52 from $56, 2002
EPS view to 91c from 99c, and 2003 outlook to $1.02 from $1.13. Keeps add
rating, though, saying the shares should only face modest pressure in face of
management's outlook (stock is actually up now), and longer-term fundamentals
still look good. Shares up 0.2% at $43.79. (TG)
11:23 (Dow Jones) High-yield bond mutual funds reported their first cash
outflows of the year as $266 million left the funds during the week ended Jan.
23, according to market researcher AMG Data Services. (JD)
11:07 (Dow Jones) Open TV (OPTV) extending plunge, down 17% at $6.97 after
posting a 4Q net loss of $2.5M from a $2.4M loss last year, taking a $9.1M
restructuring charge, shedding jobs. Analyst says shares mostly down on
disappointing outlook. Open TV expects a net loss for the 1Q of this year
between $10.5M and $11.5M. (MFV)
11:03 (Dow Jones) EUR/USD "is entering a very dangerous phase which could
bring new lows," says a trader, who reckons the pair is preparing to test
$0.8500-20. (GMM)
(END) DOW JONES NEWS 01-25-02
02:19 PM |
