Lehman on telecom
Lehman issued a broad survey of the telecom industry this morning, detailing how the industry is undergoing a massive restructuring. In telecom svcs, sees FON and Q as most exposed (see 7:11 FON downgrade); in wireless, sees AWE and PCS as survivors and NXTL and Voicestream at most risk; cuts ests on towers, and downgrades AMT to BUY from Strong Buy and SITE to MKT PERFORM from Buy; long-haul providers LVLT and TWTC will be hurt by consolidation of purchasing power; in wireline equipment, TLAB and NT at risk of lowering Q1 forecasts and TKLC, ADCT, and LU best positioned from customer perspective; prefers handset exposure in NOK and QCOM; in data networking JNPR is most exposed, prefers CSCO.
08:04 ET UMC United Micro: Spot secondary of 47 mln shares prices at $9.25 (9.75)
07:49 ET Drop in DRAM prices could hit tech stocks-- DBAB
DB Alex. Brown out of Japan believes that the probability has increased that a drop in DRAM prices will trigger a correction in tech stocks, based on: 1) firm does not believe there has been any increase in final demand for audiovisual equipment and PCs, 2) DRAM makers have begun stepping up their output, 3) MU-Hynix deal has hit a snag, and 4) spot dealers have accumulated DRAM inventories, which they will need to unload once prices start falling.
08:56 ET Solly cuts estimates for drillers, downgrades Transocean & Diamond Offshore
Salomon Smith Barney cuts 2002-03 ests for drillers RIG, DO, NE, and GSF due to lower day rate and utilization assumptions; downgrades RIG and DO to NEUTRAL from Outperform on valuation and shaky fundamentals, yet raises NE's price target to $46 from $41 and reiterates Buy rating.
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08:36 ET ONIS ONI Systems having second thoughts? (6.38)
Hearing from sources that SoundView Technology believes ONIS might be having second thoughts about its merger with Ciena (CIEN); however, firm notes that the price of ONIS is still close to the implied price of the deal, and it does not see other firms lined up to take CIEN's place nor does it expect a price increase from CIEN.
07:05 ET RNWK RealNetworks raised to Buy at Robertson Stephens; subscriber gains (6.72)
Robertson Stephens upgrades to BUY from Mkt Perform and increases its price target to $10 from $7. Firm is increasingly confident that RealOne subscriber base may continue to grow at the current rate of 100K per qtr to reach 1 mln subs by yr-end.
07:03 ET JNPR Juniper Networks cut by ABN to Hold; could trade down to $10 (12.96)
ABN AMRO downgrades to HOLD from Add. Believes consensus estimates are too high. Firm cutting its 2002 view to $0.13 from $0.18 and 2003 to $0.27 from $0.30. ABN does not expect co to achieve March revenue guidance of $150-$155 mln or 2nd-half guidance of $305-$315 mln. With exposure to rev and earnings disappointment, believes stk could trade down to $10 or lower.
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About This Page | Printable Version | Archive | Yesterday | Ticker Search:
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Updated: 14-Mar-02 10:14 ET Comprehensive coverage on Short Stories, analysis on Story Stocks
Today's In Play Set default to no-refresh
10:14 ET ABG Asbury Automotive IPO opens at $16.90 (16.85 +0.35)
10:07 ET Nasdaq Composite Intraday -- Technical --
Although there was an opening pop in several tech sectors the index failed to work through first level resistances with prices recently moving to fresh pullback lows. Next support comes in at 1850 (38% retrace of Feb/Mar rally) followed by 1841. First step to neutralizing the intraday weak bias is a move back through resistance at 1863/1867.
10:07 ET PAX Paxson rumored to be acquisition target (11.10 +0.50)
Hearing rumors that Disney (DIS) and GE's (GE) NBC unit, which already has a stake in PAX, are competing to acquire Paxson in the wake of a recent Supreme Court decision which eased restrictions on TV station ownership; rumors suggest a deal is possible over the weekend. There has been no comment from the companies or confirmation of this talk.
09:57 ET SMTF SmartForce pressured by Piper Jaffray estimate cuts (14.20 -1.85) -- Update --
Gaps down on USB Piper Jaffray pre-market comments. Firm's channel checks with SMTF customers, resellers, and partners indicate that the tough corporate spending environment continues to hamper e-learning sales efforts. Tough selling environment leads firm to lower estimates. Cuts FY02 to $0.52 from $0.60 and FY03 to $0.94 from $1.00.
09:51 ET Notable Laggards
GlaxoSmithKline (GSK 47.87 -0.94)... SmartForce plc (SMTF 14.60 -1.45)... Informatica (INFA 8.56 -1.28)... NVIDIA (NVDA 52.33 -1.27)... Isle of Capri Casinos (ISLE 17.01 -1.50).
09:47 ET LE Lands End gaps down following earnings report (51.00 -3.69)
09:47 ET Sector Watch
Solid start for a number of tech sectors off the open as traders attempted to run some of the groups hit hard yesterday. However, while semiconductor and software are still positive, they have pulled back off the early highs. Pacing the way on the upside are biotech, healthcare, utility and paper. Weakness being seen in oil service (downgrade), airline, gold, networking, telecom.
09:45 ET EK Eastman Kodak trades up after reiterating Q1 and FY02 guidance originally provided (32.00 +1.00)
09:42 ET DCTM Documentum (22.03 -0.90)
In pre-market note, Pacific Crest indicated that it believes the Verity (VRTY +10.7%) earnings report provides a positive indicator for content management vendors. Mentions DCTM and FileNET (FILE).
09:34 ET ADP Automatic Data rumored to lower guidance (55.87) -- Update --
We are hearing that ADP is lowering their guidance during their analyst day conference; stock is trading down (despite a JP Morgan upgrade), and PAYX (-2.6%) seems to be weak on the rumor as well.
09:33 ET ATYT ATI Tech gains traction at Compaq --CSFB (13.60 +0.46)
According to CSFB, co gained further traction with Compaq, garnering the default slot in one line of Compaq's 8000 Carbon series Presario desktop. Compaq's desktop PCs had been shipping default with NVIDIA (NVDA 53.35 -0.25) graphics processors in the past.
09:26 ET Crude oil slightly lower
Prices in London and the U.S. were slightly weaker in the wake of the DOE inventory report which showed a drawndown less than the most recent industry data. However, the futures remain within a week long range just slightly below the six month high as continued Mid-East violence underpins.
09:26 ET MGM Metro-Gldwn-Myr prices 10.5 mln follow-on offering at $16.50 (18.16)
09:23 ET MANU Manugistics could be profitable earlier than expected-- Pac Growth (19.82)
Pacific Growth believes that MANU may hit their profitability target in the May qtr, which is earlier than the Street consensus of break-even in the August qtr; firm says that biz is tracking well, as evidenced by the recent PFE deal, and visibility is improving. Price target is $23.
09:18 ET LE Lands End tops estimates (54.69)
Reports Q4 (Jan) earnings of $1.51 per share, $0.02 better than the Multex consensus of $1.49; revenues rose 10.7% year/year to $596.0 mln vs the $571.4 mln consensus.
09:17 ET Opening Indications
A lackluster tone in pre-market action as the S&P futures, +0.70, are 2.70 points above fair value while the Nasdaq 100 PMI is up 2.49 points
09:02 ET ADP Automatic Data upped by JP Morgan (55.87)
JP Morgan upgrades to BUY from Long-Term Buy, saying that the co provides a potential "double barrel" benefit from an improving economy via stabilizing employment and rising interest rates, both of which seem to be moving in ADP's favor. Price target is $64.
08:58 ET ABG Asbury Automotive prices IPO at $16.50 (n/a)
Auto dealership group prices its 7.7 mln IPO at $16.50 per share, the high-end of the $15-417 range. Goldman Sachs is leading the deal.
08:56 ET Solly cuts estimates for drillers, downgrades Transocean & Diamond Offshore
Salomon Smith Barney cuts 2002-03 ests for drillers RIG, DO, NE, and GSF due to lower day rate and utilization assumptions; downgrades RIG and DO to NEUTRAL from Outperform on valuation and shaky fundamentals, yet raises NE's price target to $46 from $41 and reiterates Buy rating.
08:55 ET Gapping Up/Down
NVTL +23% (Compaq modem deal), ANAD +11.5% (raises guidance), VRTY +10.7% (tops estimates), NEOT +9% (raises capital), RNWK +8% (upgraded by Robbie), CCUR +6.5% (Piper Jaffray defends stock), ATML +4.5% (BofA upgrade), TEVA +3.5% (favorable court ruling)... Gapping Down: CSGS -15% (AT&T Broadband seeks to terminate relationship), JNPR -6% (ABN downgrades), VPHM -5% (Fulcrum starts with a Sell), RTRSY -4.3% (Morgan Stanley downgrades to Underperform), HELX -2.9% (prices follow-on offering),
08:54 ET Opening Indications
Looking like a mixed start for the cash market as the S&P futures, -0.20, are 1.80 points above fair value while the Nasdaq 100 PMI is up 1 point.
08:45 ET CSGS CSG Systems: AT&T Broadband seeks to terminate agreement (35.45)
CSGS announces that AT&T Broadband (T) is considering the initiation of arbitration against CSGS relating to a 1997 agreement between the companies; AT&T is seeking to terminate the agreement due to alleged breaches by CSGS.
08:43 ET VPHM ViroPharma initiated with Sell rating at Fulcrum (17.50)
Fulcrum initiates VPHM with a SELL rating; firm believes that the March 19 Antiviral Drugs Advisory Committee meeting for Picovir will result in a recommendation against approval to the FDA, which could prompt a selloff of the shares down to as low as $7.50; firm is also concerned about what it views as a very weak co-promotion partnership as well as a director's recent stock sales and hedging arrangement.
08:39 ET Opening Indications
A sligtly negative response in the futures market to the economic data, but nothing serious of note... Presently, the S&P futures are +0.40, and are trading 2.40 points above fair value while the Nasdaq 100 PMI is up 3 points.
08:36 ET ONIS ONI Systems having second thoughts? (6.38)
Hearing from sources that SoundView Technology believes ONIS might be having second thoughts about its merger with Ciena (CIEN); however, firm notes that the price of ONIS is still close to the implied price of the deal, and it does not see other firms lined up to take CIEN's place nor does it expect a price increase from CIEN.
08:33 ET Jobless Claims fell 3K to 377K; close to expectations
Jobless claims fell 3K to 377K in the Mar 9 week, which was very close to the 375K consensus and will have no impact. January Business Inventories posted a surprise increase of 0.2%, the first increase in a year. This increase is consistent with the notion that inventory rebuilding is the catalyst behind the economic recovery. The Current Account deficit was $98.8 bln in Q4, a touch below the $101.3 bln consensus and of little interest. Nothing in today's release will move the markets.
08:30 ET PETM PETsMART exceeds Wall Street views (12.10)
Reports Q4 net of $0.23 a share, $0.02 better than the Multex consensus, vs a yr-ago loss of $0.24. Sales increased 21% to $737.8 mln. "2001 was the most profitable year in the history of the company. Sales ramped up during the holiday period and the momentum continues."
08:26 ET RTRSY Reuters Group slides 3.5% on Morgan Stanley downgrade (44.80)
Morgan Stanley Europe downgrades to UNDERPERFORM from Neutral; believes it gets worse before it gets better.
08:24 ET CTAS Cintas Corp posts in line Q3 earnings (46.65)
Reports Q3 (Feb) earnings of $0.32 per share, in line with the Multex consensus of $0.32; revenues rose 1.5% year/year to $545.0 mln vs the $548.0 mln consensus. Co sees 2002 revenue and EPS growth of 3-5% and 5-7%, respectively.
08:22 ET MAS Masco Corp downgraded at Morgan Stanley on valuation (28.59)
Morgan Stanley downgrades to NEUTRAL from Outperform based on valuation; sees $2-3 upside potential and $6 of downside risk for the stock; also higher rates could pressure stock performance, given that its stock price is inversely correlated to rates and multiples tend to contract as rates rise.
08:20 ET Opening Indications
Futures market continues to maintain a positive bias ahead of the economic releases (see 8:07 ET) at 08:30 ET as traders are hopeful they will point to further signs of economic recovery... Presently, the S&P futures, +2.50, are 4.50 points above fair value while the Nasdaq 100 futures, +5.50, are 9.50 points above fair value.
08:16 ET CCUR Concurrent sell-off overdone; Piper Jaffray would be aggressive buyer (7.60)
USB Piper Jaffray views recent pullback related to pricing concerns and a high-profile competitor win as overdone. Firm would be aggressive buyers at current prices, as the VOD market is poised for long-term sustainable growth.
08:14 ET DOX Amdocs Ltd: positive comments by Goldman Sachs (26.60)
Goldman Sachs reiterates Recommended List rating and says that recent weakness creates a compelling buying opportunity; shares have fallen due to senior mgmt changes and possibly the reduced outlook for CMVT, yet mgmt change seems to be a normal transition, there seems to be little correlation between DOX and CMVT biz drivers, and the co is a leader in its industry, has attractive long-term growth drivers, and the potential for 20% or so annual EPS growth.
08:07 ET Jobless claims expected little changed at 375K
There are four economic releases at 8:30 ET, though only jobless claims is likely to get any mention; claims are seen falling slightly to 375K from 376K in the Mar 9 week. Business Inventories get second billing, with a 0.4% decline expected in January (inventory rebuilding probably got underway in Feb). Export/import prices and Current Account unlikely to get any notice.
08:06 ET HELX Helix Tech prices 3 mln follow-on offering at $20.25 (21.21)
08:05 ET Opening Indications
S&P futures, +2.50, are 4.50 points above fair value while the Nasdaq 100 futures, +5.50, are 9.50 points above fair value... Not much news to induce the bullish bias, but traders appear to be anticipating a modest rebound in stock prices after yesterday's drubbing.
08:04 ET Lehman on telecom
Lehman issued a broad survey of the telecom industry this morning, detailing how the industry is undergoing a massive restructuring. In telecom svcs, sees FON and Q as most exposed (see 7:11 FON downgrade); in wireless, sees AWE and PCS as survivors and NXTL and Voicestream at most risk; cuts ests on towers, and downgrades AMT to BUY from Strong Buy and SITE to MKT PERFORM from Buy; long-haul providers LVLT and TWTC will be hurt by consolidation of purchasing power; in wireline equipment, TLAB and NT at risk of lowering Q1 forecasts and TKLC, ADCT, and LU best positioned from customer perspective; prefers handset exposure in NOK and QCOM; in data networking JNPR is most exposed, prefers CSCO.
08:04 ET UMC United Micro: Spot secondary of 47 mln shares prices at $9.25 (9.75)
07:49 ET Drop in DRAM prices could hit tech stocks-- DBAB
DB Alex. Brown out of Japan believes that the probability has increased that a drop in DRAM prices will trigger a correction in tech stocks, based on: 1) firm does not believe there has been any increase in final demand for audiovisual equipment and PCs, 2) DRAM makers have begun stepping up their output, 3) MU-Hynix deal has hit a snag, and 4) spot dealers have accumulated DRAM inventories, which they will need to unload once prices start falling.
07:45 ET PFGC Performance Food upped by Lehman; accounting issue isolated (30.75)
Lehman upgrades to STRONG BUY from Buy. Firm confident that accounting irregularity disclosed Monday is an isolated incident. Given firm estimating that accounting mishap only due to impact 2002 earnings by 4.6%, views 13% decline in stk provides an attractive entry point. PFGC gained 5.3% yesterday on a BofA upgrade.
07:44 ET ABS Albertson's downgraded at UBS (31.69)
UBS Warburg downgrades to REDUCE from Hold based on valuation and our concerns regarding the co's current strategic direction; firm believes the co is more focused on improving its cost structure rather than growing sales at a time when the food retail sector is becoming increasingly competitive and undergoing a secular shift.
07:39 ET FBF FleetBoston downgraded by UBS on valuation (36.65)
UBS Warburg downgrades to HOLD from Buy due to valuation (price target is $38) and shaves 2002 est; firm also continues to see near and intermediate term earnings risks from commercial credit quality, Argentina, and the strategic repositioning of several business lines that the co currently has underway.
07:36 ET CRTK CoorsTek tapped by InVision for supply chain management (33.05)
Signs letter of intent to become a contract manufacturing partner to support the expansion of production capacity of InVision's CTX brand explosives detection systems. Under the letter of intent, CoorsTek will also manage InVision's supply chain related to its CTX 2500 and CTX 5500DS systems, whether manufactured by CoorsTek or otherwise.
07:34 ET RBK Reebok Intl cut by Merrill; co losing momo (26.72)
Merrill Lynch downgrades to near-term NEUTRAL from Buy after several data pts in the past week suggest that co may be losing momentum in the athletic specialty segment. About a quarter of the stores firm talked with characterized Reebok as "losing momentum", and no one characterized Reebok as "gaining momentum".
07:30 ET CSFB reduces estimates for EMS co's
CSFB believes current expectations for EMS co's in the later quarters of this year are too high, as 2002 outlooks for the wireless infrastructure, data networking, and PC markets have deteriorated since December. Lowers 2002 ests for SLR, JBL, SANM, PLXS, and PMTR; prefers CLS, FLEX, and PLXS.
07:25 ET ATML Atmel Corp upped to Buy at BofA -- biz has bottomed (8.42)
Banc of America Sec upgrades to BUY from Mkt Perform. Firm believes that business at Atmel has bottomed and is likely to reaccelerate in the JunQ. While firm does not anticipate any upside to the MarQ, believes sequential growth of 5-10% in JunQ. Firm has a price target of $12.
07:24 ET Opening Indications
This morning's fair value figures -- S&P 500 fair value: 1155, closed 2 pts above fair value. Nasdaq 100 fair value: 1493, closed 4 pts above fair value. Current indications: S&P 500 futures are +2.70 or 4.7 pts above fair value. Nasdaq 100 is +6.50, or 10.5 pts above fair value... Initial claims and Business Inventories out at 8:30.
07:19 ET CSFB lowers PC forecast, trims estimates
CSFB lowers their 2002 PC unit growth forecast to 5% from 10% due to the following reasons: 1) checks indicate there is no evidence of a commercial pick-up with 2 weeks to go in Q1, 2) most IT managers seem to have pushed their hardware procurement plans into late 2002 or beyond, 3) consumer PC sales have recently shown signs of cooling, and 4) stronger macro economic data is occurring without tech end market participation; firm does not believe that rallies are worth chasing. Trims 2002 ests for HWP and CPQ, and 2003 ests for DELL and TECD. |
