From Standard & Poor's Equity ResearchRAYMOND JAMES KEEPS OUTPERFORM ON WILLIAMS-SONOMA
Raymond James analyst Budd Bugatch says Williams-Sonoma's (WSM) second quarter adjusted EPS of $0.08 beat his $0.06 estimate and $0.07 consensus on better-than-forecast cost control and lower tax rate.
But Bugatch notes that same-store sales fell 11.7%, retail revenue fell 4.9% and direct-to-consumer revenues were down 4.3%. He says the greatest declines appear to be in Pottery Barn and Pottery Barn Kids.
He notes that the company lowered its $1.45-$1.58 ($1.31-$1.44 adjusted) fiscal year 2009 (January) GAAP EPS forecast to $1.03-$1.15 ($0.89-$1.01 adjusted). He says about two-thirds of the reduction comes from lower forecast retail revenues; catalog circulation will fall by 18%-20% year-over-year.
The analyst notes that management is extremely cautious about its fiscal year 2010 outlook, and reduced expected square footage growth to 5% from 7%.
UBS FINANCIAL UPGRADES ENERGEN TO BUY FROM NEUTRAL
UBS Financial analyst Ronald Barone says the Energen (EGN) upgrade reflects his constructive outlook for natural gas fundamentals and his belief that EGN (and other integrated gas stocks) has seen excessive valuation compression with the recent pullback in commodity prices and sector rotation out of energy. He notes that prior to today's opening, EGN shares were down 30% from late June.
Barone says he remains attracted to EGN's lower-risk upstream strategy. He says positive fundamentals include: visible earnings growth and rising free cash flow, significant hedging of 2008-2010 production, and EGN's under-appreciated exploitation program and long-lived reserves.
He sees EPS of $4.58 for 2008 and $5.88 for 2009. He has an $80 price target on the stock.