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S&P Picks and Pans: Toyota, Walgreen, Manpower


Analyst opinions on stocks making headlines in Monday's market

From Standard & Poor's Equity Research12/22/2008- 9:39am S&P REITERATES SELL OPINION ON ADSS OF TOYOTA MOTORS (TM; 62.80)

Illustrating the depths of the global automotive industry's difficulties, Toyota Motor Corp. reduced its financial outlook. Although it expects to post net income in FY 09 (Mar.), TM projects a loss on an operating level. In our view, relative to peers, TM has a strong balance sheet that should help it weather this crisis, but further strength of the yen and demand weakness remain risks to results. We expect global automotive demand to decline in calendar '09. While we see TM as a long-term leader, we view the ADSs unattractive now, based on the near-term challenges we expect. /E. Levy, CFA

12/22/2008- 10:09am S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF WALGREEN CO (WAG; 25.19)

Nov-Q EPS of $0.41 vs. $0.46 is $0.06 below our estimate due primarily to operating expenses, which were adversely affected by a large number of new store openings and investments in retail healthcare and "rewiring for growth" initiatives. Walgreen Co. announced a reduction in the rate of store openings in FY 10 (Aug.) and FY 11. However, in the near term, we see the difficult consumer spending environment hurting sales and operating costs continuing to be high. We lower our FY 09 EPS estimate by $0.17 to $2.13 and our 12-month target price by $5 to $30. /J.Agnese, L.Braverman, CFA

12/22/08 10:59 am ET ... S&P MAINTAINS SELL OPINION ON SHARES OF MANPOWER (MAN; 31.95)

Shares are off about 12% so far today, after MAN says results in the first 2 months of Q4 are weaker than it expected and is seeing very soft demand in Dec. MAN reports revenues were down 20% in the first 2 months of Q4, vs. prior Q4 guidance of a 9%-11% decline, and MAN withdrew Q4 revenue and EPS guidance. We reduce our '08 EPS estimate by $0.40 to $4.45, and 09's by $0.55 to $2.70, as trends appear to be worse than we modeled in MAN's largely European business. But we leave our target price at $23, 8.5X our '09 EPS estimate, to reflect a recent rise in market valuations. /M. Jaffe


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