Needham & Co picked up coverage of Onsale (ONSL) to "STRONG BUY"
Is it too late to cover Amazon?
We couldn't let an analyst update slip by
without noting that Needham & Co. has
just now gotten around to covering some
of the Internet players.
Among others, the investment house
picked up coverage of Onsale (ONSL)
and N2K (NTKI) with a Strong Buy and
Buy, while also starting Amazon
(AMZN), Cybershop (CYSP), and
Preview Travel (PTVL) with Holds.
THE FULL ARTICLE
ANALYST UPDATE:
AS EARNINGS
EXPLODE, THE
STREET UPGRADES
By Peter D. Henig
Red Herring Online
July 17, 1998
Not only is Marv Albert back with the
Knicks -- yessss! -- but technology
stocks are back for a major rebound.
Upside surprises carried the market
from one end of the technology court to
the other, hitting field goals for
boxmakers and chipmakers,
double-pumping for software, and
slam-dunking for the major Internet
players.
Apple jams, Intel soars
Apple (AAPL) Computer, the comeback
kid of the decade, led by Steve Jobs,
hinted at future profits at its recent
Macworld Expo in New York, and it
wasn't kidding. Apple posted earnings of
$0.50 per share, far above than the
Street's expectations of $0.33.
Now, investors have reason to finally
think different(ly). The stock has
climbed to two-year highs above 38, and
analysts are finally getting in the game.
"I'm actually excited about this one,"
said Daniel Kunstler, analyst with J.P.
Morgan Securities, revealing his
newfound ebullience the day before
pulling the trigger on an upgrade from
Long-Term Buy to Buy. "I'm even going
to go out and buy an iMac for my home."
You can't get much more bullish than
that.
Intel (INTC) also pulled down some big
time upgrades, with Bear Stearns and
Volpe Whelan Brown raising the
semiconductor giant from Neutral to
Buy, while Sutro & Co. raised its rating
from Hold to Accumulate.
The chipmaker also posted strong
earnings results on Tuesday, although
analysts had to look at the numbers
behind the numbers to see the real
turnaround story in progress.
Intel posted earnings of 0.66 per share, 2
cents less than First Call's estimates of
0.68, but the Street looked at the strength
in the notebook business, improvements
in Japan, and effective cost-cutting in
line with previous company guidance,
and said "Buy 'em!" And investors did.
The stock has surged more than 15
percent over the past two weeks on
renewed bullishness that the company is
figuring out how to more effectively
meet demand, and its growing
confidence that newly appointed Chief
Executive Officer Craig Barrett has
things under control.
Cable rides the high wires
Want to take a cable ride? Then hook up
with Morgan Stanley's analysts and hang
on.
Following AT&T's (T) $48 billion
pre?mptive strike into the industry
through its acquisition of
Tele-Communications Inc. (TCOMA),
the investment bank took the hint that
cable is now more relevant ever before
-- by upgrading four of the largest cable
companies in the nation.
Morgan Stanley not only raised TCI
from Neutral to Outperform, but upped
Cablevision Systems (CVC) and
Comcast Corporation (CMCSK) from
Neutral to Outperform, while bumping
up Cox Communications (COX) from
Outperform to Strong Buy.
Analysts across the Street were
unanimous that AT&T's move had given
credibility to cable as a bandwidth
solution, though they doubted that AT&T
could really use TCI as a local
telephone quick fix anytime soon.
"It's great for the cable companies," said
Dana Serman of Schroder & Co., of the
AT&T-TCI deal. "But I think AT&T is
going to have to put twice the money
they think they will have to into TCI to
really make it work." TCI is the least
upgraded of all the major cable players
in terms of return path, or two-way,
capability.
Quattrone's brain drain
Why is Credit Suisse First Boston
picking up 10 tech companies? Frank
Quattrone, that's why. When the tech
investment banker packed his bags at
Deutsche Bank Securities and moved
over to CSFB, most of his analysts
followed. Who did Mr. Quattrone's
loyal lackeys pick to cover? The list of
winning hopefuls includes: Tellabs
(TLAB); Lucent Technologies (LU);
ADC Telecommunications (ADCT);
Ascend Communications (ASND); DSP
Communications (DSP); Nokia
(NOKA); Ericsson Telephone (ERICY);
3Com (COMS); Cisco (CSCO); and
Broadcom (BRCM).
Better luck next time
It wasn't all slam dunks and hoop
dreams there in tech-land however.
Just ask Applied Materials (AMAT).
Wall Street proved that it still knows
how to bust a move on the downside,
following the company's warnings that
third-quarter results would be weak,
blaming order delays, lower customer
spending, weak personal computer sales
and struggling Asian economies.
As a result, Robertson Stephens cut its
rating on the stock of Applied Materials
to Long-Term Attractive from Buy,
while Donaldson Lufkin Jenrette Analyst
Robert Maire downgraded the
semiconductor equipment maker to
Market Perform from Buy.
"We have gone from a situation of
uncertainty with some upside, to a
situation of certain gloom for a longer
period of time than anybody previously
imagined with virtually no potential
upside for the next two to four quarters,"
said Mr. Maire in a prepared statement.
"Applied Materials, in our opinion, is
still the best in the business and a core
holding, but the best we seem able to
hope for is flatness."
Standard & Poor's was not so forgiving,
however. The debt rating agency revised
its outlook on the company to negative
from stable.
Is it too late to cover Amazon?
We couldn't let an analyst update slip by
without noting that Needham & Co. has
just now gotten around to covering some
of the Internet players.
Among others, the investment house
picked up coverage of Onsale (ONSL)
and N2K (NTKI) with a Strong Buy and
Buy, while also starting Amazon
(AMZN), Cybershop (CYSP), and
Preview Travel (PTVL) with Holds.
What were they thinking?
"I've said it before and I'll say it again:
There just ain't nothing left in Internet
stocks," commented Rick Berry, analyst
with J.P. Turner.
With the Nasdaq index now above 2000,
he may finally be right.
Analysts had to look behind Intel's earnings for
the good news.
The AT&T-TCI deal was great for cable
companies, but did Ma Bell pay too much?
Would you upgrade tech stocks based on
earnings? Sober us up.
TODAY'S
NEWS
What's not up
with Cisco and
Lucent?
In brief: NBC
sends execs
to Snap
Is IBM back for
good?
Analyst
Update: As
earnings
explode, the
Street
upgrades
Head count:
Novera,
Kleiner
Perkins, Salon
Broadcast.com
IPO rocks
market
Earnings
Update: The
numbers just
keep getting
better
IPO Update:
The non-event
IPOs
Earnings
Update:
Tellabs posts
amazing
quarter
Earnings
Update: Tech
earnings back
up valuations
Time Warner
ain't singing
the blues
Earnings
Update:
Compaq
delivers on a
promise
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SOURCE:http://www.redherring.com/insider/1998/0717/analysts.html |
