MARKET TALK: Meeker, Noto In eBay's Corner
28 Feb 10:44
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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10:44 (Dow Jones) Morgan Stanley's Mary Meeker and Goldman's Anthony Noto are
out with bullish calls on eBay (EBAY) Thursday morning. Meeker upgrades the
stock to strong buy from outperform and Noto issued a favorable note
reiterating his recommended-list rating. Both analysts, longtime Internet
bulls, contend the online auction company's stock has plenty of room to rise
from Wednesday's $49.11 close and express confidence in their future estimates
for the company, even though other observers have for some time expressed
concern about eBay's valuation. Stock up $2.86 at $51.97. (RS)
10:36 (Dow Jones) A rock to cling to in troubled times. That's essentially
what Merrill is calling GE in a recent in-depth report on the conglomerate,
whose stock is up better than 5% over the last week or so. GE possesses many
qualities that are scarce in the market now: familiarity, consistency, cash and
a solid AAA rating, according to analyst Jeanne G. Terrile. That's worth a
higher multiple and a $50 stock price before year end, she says. GE is up 69c
to $39.45. (CCW)
10:27 (Dow Jones) The hot gain in the Chicago PMI puts the index above 50 for
the first time in 18 months and suggests that the ISM survey on Friday,
expected at 51.0, could be even stronger, says Anthony Karydakis, Banc One
economist. (MSD)
10:24 (Dow Jones) Speculation mounting in Tokyo banking circles that Japan
government is mulling a new fiscal package, says London-based Japanese bank
source. Package could be unveiled in May, will center on stimulating consumer
demand rather than new public works, could include income tax, sales tax cuts.
(JMG)
10:19 (Dow Jones) While Hewlett-Packard (HWP) Chief Executive Carly Fiorina
was touting the company's proposed merger with Compaq Computer(CPQ) on
Wednesday, dissident director Walter Hewlett made a regulatory filing in which
he detailed his vision of an H-P future without Fiorina. Hewlett extolled the
virtues of interim and replacement chief executives and cited Procter & Gamble
(PG), Honeywell International (HON) and Apple Computer (AAPL) as companies that
prospered when their CEOs departed. Hewlett said that in those three cases,
only the chief executive departed, and he suggested that the same could be true
for Hewlett-Packard. He cited statements by H-P executives, other than Fiorina,
indicating the executives will remain with the company even if the merger falls
through. (RG)
10:10 (Dow Jones) It looks like Mel was right. Entertainment conglomerate
Viacom (VIA, VIAB) is poised to benefit from chief operating officer Mel
Karmazin's decision last year not to sell TV time on CBS for cheap during the
upfront selling season, says Merrill Lynch entertainment analyst Jessica Reif
Cohen. The analyst suggests that network scatter inventory pricing for March is
positive and 2Q scatter "is up an estimated 10%." Of all the broadcast
networks, says Cohen, "CBS has the most to gain in a positive pricing
environment since they sold the least amount of inventory in the upfront
advertising market.' (BS)
10:05 (Dow Jones) The February Chicago PMI rose by a very respectable degree,
moving to 53.1 versus 45.1 the prior month. Meanwhile, the Chicago Fed's
national activity index moved to -0.51 from -0.82 in December. Stocks rallying,
Treasurys falling. (MSD)
10:02 (Dow Jones) Phew! Much to the relief of nervous investors, industry
leader Waste Management (WMI) didn't lower 2002 guidance earlier this week when
it reported 2001 earnings, lifting shares of the whole sector. J.P. Morgan
analyst Amanda Tepper believes the current valuations of the waste sector
already fully reflect the expected economic recovery. She puts a good word for
Allied Waste (AW), which she said offers the biggest long-term upside in the
group. Allied is up 8 cents to $13.27. (CCW)
9:46 (Dow Jones) Merrill's small-cap strategist, Satya Pradhuman, says the
weakness in earnings this cycle is even more severe than in the past recession.
Earnings of smaller stocks slowed to a median growth rate of roughly 1% back in
1990, while the current cycle has seen a collapse of down 15%. He notes
interestingly that small-cap earnings appear to have stabilized in a
quarter-over-quarter comparison, while large-cap earnings fell shy of 3Q
results (down 11% and 14% in 3Q and 4Q for small-caps, respectively, and down
2% and 13% for large-caps). (TG)
9:34 (Dow Jones) Offered a one-time $17 payment by Cox Communications (COX)
to hold onto their convertibles, holders of Cox convertibles due 2021 put back
to the company less than half ($329M, or 42.7%) of the $771M outstanding, says
Deutsche analysts. And they say the converts are still an attractive
investment. Meanwhile, $454.5M, or 99%, of the outstanding Cox Enterprise 2%
convertibles due 2021 were put back earlier in the month, says Morgan Stanley's
ConvertBond.com. COX up 0.8% to $36.05. (RTB)
9:23 (Dow Jones) Goldman Sachs' John Youngdahl says the FOMC's formal
"balance of risks" language "probably will be maintained in the direction of
economic weakness at the March 19 FOMC meeting, though it might well be shifted
to a neutral tone by the following meeting on May 7." (JCC)
9:17 (Dow Jones) Ericsson (ERICY) closed Wednesday at $4.14, and WR Hambrecht
says that's about where it should be. Why? When the firm applies historical P/E
to hypothetical 2003 EPS estimate, which assumes Ericsson can return to its
historical operating margins of 10%-15% (above Hambrecht's current view of 5%),
the number they come up with is $4.25 a share. Starts coverage with market
perform. (TG)
9:10 (Dow Jones) Final sales - GDP less inventories - was revised up to a
strong 3.6% growth from 2.5%, reflecting a smaller trade deficit due to less
imports and increases in consumption and government spending. There was a very
small revision to a smaller rate of inventory reduction. (JM)
(END) DOW JONES NEWS 02-28-02
10:44 AM |
