From Standard & Poor's Equity ResearchCITIGROUP DOWNGRADES CABLEVISION TO SELL FROM BUY
Citigroup analyst Jason Bazinet says he recently upgraded Cablevision Systems (CVC) shares to buy from sell based on CVC's robust second quarter performance despite threats from Verizon's (VZ) fiber-optic service FiOS.
Bazinet now believes that CVC is trading too high vs. peers such as Comcast (CMCSA) and Time Warner Cable (TWC), and also wonders how long CVC can remain immune to FiOS. He cites VZ's recent announcement to build out New York City and CVC's heavy exposure in the Bronx and Brooklyn.
As for the downgrade, he adds that near-term selling pressure could be strong because of the increased concentration of CVC shares -- the top holders now control 73% of the equity not owned by the Dolan family, vs. 52% a year ago. He maintains a $29 target price.
JEFFERIES CUTS HEALTHWAYS TO UNDERPERFORM FROM BUY
Jefferies analyst Arthur Henderson tells S&P MarketScope that Healthways' (HWAY) premium-priced offering is less attractive to customers looking to reduce discretionary spending, and its "low-touch" call center strategy seems to be losing ground to new, lower priced, "higher-touch" models that offer payors, physicians, patients more robust approaches to DM (disease management)/wellness.
Anderson thinks Healthways needs to rapidly adjust approach to integrated DM and wellness programs: the company needs more home nurses on staff and needs to build greater trust with patient in engagement phase. This doesn't come from telephone calls but rather face-to-face interaction in which physician is an active participate.
He cuts $40 price target to $18.50.
RBC CAPITAL RAISES ALPHARMA'S $36 TARGET TO $40, REITERATES OUTPERFORM
On Friday, King Pharmaceuticals (KG) said its bid to acquire Alpharma (ALO) was rejected. RBC Capital analyst Ken Trbovich says there are four reasons he thinks ALO gets taken out at higher price: 1) ALO's rejection of $33 bid indicates KG must raise bid if it has any hope of gaining board support; 2) KG's offer could trigger ALO's Board to conduct auction as one alternative to KG offer; 3) he thinks ALO would be great fit for number of other companies in the pain space; 4) he believes premium to $33 bid can easily be justified with potential synergies.
He believes ALO's board easily rejected the bid because it implies valuation for ALO's pharma business is well below recent acquisitions in the space and even below current peer group multiples.