From Standard & Poor's Equity ResearchOPPENHEIMER MAINTAINS UNDERPERFORM ON CITIGROUP
Oppenheimer analyst Meredith Whitney says Citigroup's (C) offering price is 4% below Tuesday's close and follows $6 billion preferred raise last week; she believes it precedes one or more significant raises to come.
Whitney says the fact that it has raised capital now did not surprise her, but the fact that it raised such a small amount confounds her. She estimates Citi needs to raise additional $10-$15 billion or sell several hundreds of billions worth of assets in order to truly shore up its capital position.
She continues to be negative in her outlook on Citi due simply to fact that the company has seriously constrained EPS power that will result in pressure to cut/eliminate current dividend and will lead Citi to seek additional capital from outside investors.
JEFFERIES DOWNGRADES SAVVIS TO HOLD FROM BUY
Jefferies analyst Jonathan Schildkraut says Savvis (SVVS) first quarter revenue of $203.3 million is short of his $207.7 million estimate, while EBITDA of $40.3 million is above his $37.4 million estimate. He says bookings of $84 million and churn of 1.9% is marginally worse than expected.
Schildkraut says management reduced its 2008 revenue estimate to $840-$870 million and EBITDA to $175-$190 million, as bookings and churn levels are unlikely to improve over next few quarters, in part, due to extending sales cycles in weakening economy.
He cuts $904.1 million 2008 revenue estimate to $852.3 million, $1.033 billion forecast for 2009 to $936.3 million; EBITDA forecasts go from $199.3 million for 2008 to $179 million and $257.3 million for 2009 to $216.6 million; breakeven 2008 estimate goes to $0.42 loss per share and $0.66 2009 EPS estimate to $0.34 loss, all to reflect increasing competition in colocation and network services spaces.
COWEN UPGRADES BUFFALO WILD WINGS TO OUTPERFORM FROM NEUTRAL
Cowen analyst Paul Westra says his upgrade of Buffalo Wild Wings (BWLD) follows "better news" first quarter report that alleviated his concerns regarding possible recession hit to comps and EPS miss vs. guidance. He notes April company/franchise comps accelerated to about +7%/+3%.
He also says management has de facto reduced its 2008 operating EPS outlook by now, including the impact of its expected third quarer 2008 Las Vegas acquisition, into its unchanged 2008 EPS guidance of about $1.38.
Westra raises $1.30 2008 EPS estimate to $1.38 driven by $0.03 better forward comps, $0.03 better forward G&A leverage and $0.02 better Vegas acquisition impact. He sees $1.72 2009 EPS. He expects BWLD shares to outperform market by over 20% in the next 12 months.