From Standard & Poor's Equity ResearchBB&T CAPITAL DOWNGRADES CHIQUITA BRANDS TO HOLD FROM BUY
BB&T Capital analyst Heather Jones says Chiquita Brands International's (CQB) $0.74 fourth quarter loss, excluding writedown on Fresh Express, was much worse than her $0.23 loss estimate.
She says the shortfall relative to her view was attributable to flood costs in Costa Rica, which were not in her model, higher-than-expected legal fees and investment spend, and bigger hit from fuel hedges.
Jones cuts $1.17 2009 EPS estimate to $0.95 largely due to the incremental interest expense. She believes the shares are now fully valued, particularly given overall multiple compression across the group.
CITIGROUP UPGRADES WEBMD HEALTH TO BUY FROM HOLD
Citigroup analyst Mark Mahaney says WebMD Health's (WBMD) $112 million fourth quarter revenue was ahead of his and the Street's $106 million forecast and $34 million EBITDA was ahead of his and the Street's $32 million estimate.
Mahaney upgrades the stock as: 1) $20 stock price (before open), or 7 times EV/EBITDA, appears to be good support level, implying 10% downside, 25%+ upside; 2) Cash & Investments are 27% of WBMD's market cap; 3) fourth quarter results showed positive momentum; 3) WBMD's outlook for 15%-25% 2009 advertising growth is in sharp contrast to Yahoo (YHOO) and Bankrate (RATE) outlooks; 4) WBMD is a must-online buy for biopharma advertisers; 5) Company has unusual visibility.
He has a $25 target.
GOLDMAN DOWNGRADES VERIGY TO NEUTRAL FROM BUY
Goldman Sachs analyst James Covello says Verigy (VRGY) reported weak fourth quarter with sales down 55% quarter-to-quarter, loss of $0.70/share.
Covello notes he was bullish going into the call, as weak results were expected after recent pre-announcement, expected management to guide for another significant leg down in first quarter sales. He says VRGY failed to set expectations appropriately, however, and guided sales to be +/-10% quarter-to-quarter, which he views as unrealistic and thinks it almost ensures revenue miss in the first quarter.
He widens $2.20 calendar year 2009 loss forecast to $2.45 loss, $1.35 calendar year 2010 loss to $1.50 loss. He cuts $9 6-month target to $8.