APPLE NAMED TO CITIGROUP'S TOP PICK LIVE LIST
Citigroup analyst Richard Gardner says after Apple's (AAPL) 37% drop in stock price since the beginning of 2008, the shares fully reflect cuts to calendar year first quarter iPod and iPhone build plans.
While iPod unit growth is likely to remain sluggish through the first half of calendar year 2008, he sees several significant offsets, including: robust PC build thanks to strong demand, lean channel inventories, further expansion of Best Buy (BBY) relationship, recent introduction of MacBook Air; more favorable than expected NAND flash pricing; continued expectation for 3G iPhone in the first or second quarters; additional carrier relationships in Europe.
Gardner thinks the percentage of iPhones unlocked, used on networks where Apple receives no residual will decline as Apple launches iPhone in more countries. He has a $212 price target on the stock
CREDIT SUISSE DOWNGRADES LEVEL 3 COMMUNICATIONS TO NEUTRAL FROM OUTPERFORM
Credit Suisse analyst Christopher Larsen says he thinks Level 3 Communications' (LVLT) lack of revenue growth and sequential decline in EBITDA in the first quarter 2008 will not be enough to get the stock working. Nor, will it prove the company's ability to provision more services, which he believes is a key to its growth prospects.
Larsen thinks investors, in the short term, will key on these figures as the building blocks for longer term growth. Therefore, given the relatively high valuation and weaker economic environment, he steps to the sidelines and lowers his price target to $4 from $5.
However, he continues to believe in the long term investment thesis, which is that rising bandwidth demand will ultimately drive higher revenues and cash flow.
ST ROBINSON HUMPHREY DOWNGRADES NEUROMETRIX TO NEUTRAL FROM BUY
ST Robinson Humphrey analyst Jonathan Block says his upgrade of Neurometrix (NURO) in early January was predicated on his belief the most likely final outcome from American Medical Association panel would be NURO's NC-Stat product gets its own code at a lower level of reimbursement. He says even if a dramatic reimbursement cut were to occur, he believed the company still had a compelling business model.
Block says it now appears the company will get a Category III code, defining its device as "emerging technology." Based on this coding, he says the company wouldn't be assigned reimbursement level from CMS. As NURO is mainly a one product company, without a chance for reimbursement in 2009, he thinks his future revenue estimates are at risk. He moves to the sidelines pending better clarity.