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Analyst Actions: salesforce.com, Costco Wholesale, General Growth Properties


From Standard & Poor's Equity ResearchUBS DOWNGRADES SALESFORCE.COM TO SELL FROM BUY

UBS analyst Heather Bellini says signs of potential softness have emerged for salesforce.com (CRM) as her checks show slight drop in utilization rates.

Bellini notes that this is the first time she's heard of this in the market. She says her checks show lengthening of sales cycles on enterprise deals of late, deal slippages. She notes concerns over deferreds and lack of visibility; she fears CRM might not give fiscal year 2010 (January) guidance as it normally does on its third quarter conference call.

She cuts $0.32 fiscal year 2009 (January) EPS estimate to $0.30 and $0.79 for fiscal year 2010 to $0.60. She cuts $82 price target to $44.

GOLDMAN SACHS UPGRADES COSTCO TO BUY FROM NEUTRAL

Goldman Sachs analyst Adrianne Shapira says she sees two trends driving Costco Wholesale (COST) shares higher: 1) evidence that the franchise is gaining critical share - she expects consistent traffic and sales trends in a sea of disappointing same-store sales releases, and 2) potential upside after management's downwardly revised EPS expectations due to LIFO charges and gas profitability as the commodity outlook has brightened and should positively affect gas profits.

Shapira says as the company addresses both issues, she expects current depressed valuation to revert toward historical means. She raises her price target to $72 from $68.

RBC CAPITAL UPGRADES GENERAL GROWTH PROPERTIES TO OUTPERFORM

RBC Capital analyst Rich Moore says it has been a long battle for General Growth Properties (GGP), but he believes the end is finally near. He says its strategy of excess leverage systematically brought the company to its knees and drove the shares down 81.6% year to date.

Moore upgrades GGP to outperform from underperform with a $13 target. He notes the upgrade is supported by his $13.02 NAV.

He says if GGP remains a going concern, he feels dividend will be reinstated. He says the current distressed price of shares puts the company in a vulnerable position and makes it a potential acquisition target.


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