MERRILL CUTS EBAY TO NEUTRAL FROM BUY
Merrill Lynch analyst Justin Post tells salesforce his positive stance on eBay (EBAY) was based on gross merchandise volume (GMV) growth acceleration opportunity from positive search and pricing changes and attractive relative valuation.
Based on second quarter results, its turnaround is not materializing to his expectations (GMV decelerated to 4% year-over-year ex-forex) and while there were factors (weak autos) adding to disappointing growth, he sees risk of further deceleration.
Post cuts $39 price target to $30 as he reduces his marketplace target multiple to reflect lower growth expectations. Despite lower revenues, based on lower taxes and share count assumptions, he raises $1.76 2008 pro-forma EPS estimate to $1.77 and $1.95 2009 EPS to $1.97.
RBC CAPITAL REITERATES OUTPERFORM ON NOKIA
RBC Capital analyst Mark Sue says Nokia's (NOK) results quelled numerous investor concerns; revenues of €13.15 billion were ahead of his €12.55 billion forecast, while EPS was €0.36 vs. most views of €0.35- 0.36.
Sue says NOK shipped 122 million mobile devices vs. expectations of 120 million units and pointed toward 10% or more global unit growth this year. He believes the outlook for NOK may strengthen as we move toward end of 2008.
He notes NOK gaining share in global handset market in Latin America, Asia, and modestly in North America. Considering NOK's dominant position and its revamped new products overlaid on a stable demand environment, he reiterates outperform and $40 price target.
GOLDMAN REITERATES BUY ON BLACKROCK
Goldman Sachs analyst Marc Irizarry says BlackRock's (BLK) second quarte adjusted EPS of $2.14 beats his $1.98 estimate. He cites higher performance fees and Blackrock Solutions advisory revenue.
Also, he notes adjusted operating margin expanded 30 basis points in the second quarter. He adds that assets under management came in at $1.43 trillion (including $43.6 billion in advisory liquidation portfolio), up 4.6% on a linked-quarter basis.
In addition, Merrill Lynch (MER) decided to not only retain its BLK stake, but to extend, strengthen its global distribution relationship, lifting weighty overhang on stock.
Irizarry believes the quarter's results once again highlight breadth and diversification of BLK's platform. He believes the company's business pipeline remains robust at $64 billion of wins. His estimates and target are under review.