From Standard & Poor's Equity ResearchGOLDMAN KEEPS NEUTRAL ON BJ'S WHOLESALE CLUB
Goldman Sachs analyst Adrianne Shapira says BJ'S Wholesale Club's (BJ) $0.80 fourth quarter EPS topped her and consensus estimate of $0.74, with upside driven by lower expenses and share count, partially upset by lower gross margin and a higher tax rate. She notes BJ also posted higher 5.9% February comps and provided initial first quarter same-store sales guidance of up 4%-6%.
While Shapira expected BJ shares to rise today given fourth quarter's beat, she says to maintain its rich valuation, management will need to confirm initial fiscal year 2009 (January) EPS guidance and give an update on its initiatives to clarify continued top-line and margin opportunities.
She says she has her estimates and target under review until after its conference call.
OPPENHEIMER PUTS ESTIMATES FOR CHICO'S FAS UNDER REVIEW
Oppenheimer analyst Roxanne Meyer says Chico's FAS (CHS) $0.12 fourth quarter loss per share is narrower than her and Street's estimates. But she thinks 30% rise in inventories, given 8.3% sales decline, is a big disconnect.
Meyer notes SG&A ratio rose as result of spending on stores, marketing and deleverage. She also notes that February comps fell; she expects progress at Chico's to be slow. The company guided for negative comps for the first half of fiscal year 2009 (January) in light of traffic issues and continued markdowns.
She still believes Chico's has strong brands and store growth prospects, but thinks it could take time for the company to benefit from a multitude of personnel and infrastructure changes. She keeps perform rating; and puts $0.44 fiscal year 2008 EPS estimate under review.
LEHMAN DOWNGRADES PDL BIOPHARMA
Lehman Brothers analyst Jim Birchenough says he cuts PDL Biopharma (PDLI ) shares to equal-weight from overweight following the end of the company's strategic review.
Birchenough notes with $500 million in proceeds to be distributed to shareholders from prior asset sales and commitment to distribute 50% of value of humanization royalties, he estimates the value of shareholder distributions at $11/share assuming $14 net present value for antibody royalties. Regarding the retained value of pipeline products, he maintains prior estimate of $2/share; he assesses total value to PDLI assets at $13 a share.
Given the early stage of pipeline products and capital requirements for future development, he expects limited upside beyond his $13 target over the next 12 months.