From Standard & Poor's Equity ResearchBARCLAYS DOWNGRADES DOW CHEMICAL TO EQUAL-WEIGHT FROM OVERWEIGHT
Barclays analyst Sergey Vasnetsov says the cancelation of the joint venture with Petrochemicals Industries Co. leaves Dow Chemical (DOW) with full downside exposure to commodity chemicals trough, without $7 billion of expected cash inflow.
Vasnetsov also says debt leverage from pending acquisition of Rohm & Haas (ROH) is now higher. He believes the ROH acquisition is on track for January 2009 closure and should not be impacted by the joint venture news, as the transaction is fully financed by a syndicated bridge loan and convertible preferred investments by Warren Buffett and Kuwait Supreme Petroleum Council.
He is downgrading DOW on cancelation of the venture and his view of a lack of potential catalyst in 2009.
CARIS DOWNGRADES LIONS GATE TO ABOVE AVERAGE FROM BUY
Caris analyst David Miller says he downgrades Lions Gate Entertainment (LGF) as a result of muted opening weekend for the company's "Spirit."
Miller says with only $6.5 million in gross receipts accumulated over the Friday-Monday period, his sense is that those numbers do not match up with what LGF had budgeted film to come in in domestic theatrical frame. Notes revenue effect is the fourth quarter story.
As a result, he cuts fourth quarter revenue view to $537.3 million from $549.3 million, $0.35 EPS to $0.25, free cash flow to $240.1 million from $252.1 million. For fiscal year 2009 (March), he cuts free cash flow assumption to $92.3 million from $104.3 million.
He cuts $12.50 price target to $9.50.
BREAN MURRAY DOWNGRADES CALIFORNIA WATER TO HOLD FROM BUY ON VALUATION . . .
Brean Murray analyst Michael Gaugler says he believes the benefits that California Water Service Group (CWT) has seen recently from the California Water Action Plan have contributed to the run-up in the share price.
He thinks the shares are fairly valued, as they are trading above his $45 target price, well above the lower end of historical forward and trailing p-e multiples. He says he remains optimistic about the company's future prospects, but for now will await a more favorable valuation for the shares and/or specific catalysts before recommending investors once again purchase the shares.