MERRILL UPGRADES WILLIAMS-SONOMA TO BUY FROM UNDERPERFORM
Merrill Lynch analyst Alan Rifkin says his upgrade of Williams-Sonoma (WSM) is based on a long-term outlook; he still sees difficult second half of fiscal year 2009 (January) and fiscal year 2010, but thinks improved inventory position and significantly easier comps paves the way for sequential improvement.
Rifkin believes the worst of a sales shortfall announcements are behind the retailer. He thinks WSM is one of the strongest brands in all of hardlines. He says the company is reigning in costs and reduced capex firming up balance sheet; he sees opportunity for the company to reduce rents on existing and future sites.
He sees $0.20 fiscal year 2009 EPS, $0.20 fiscal year 2010. He raises $8 price target to $10.
COWEN DOWNGRADES PALM TO NEUTRAL FROM OUTPERFORM
Cowen analyst Matthew Hoffman says Palm (PALM) sees $190-$195 million second quarter revenue, with huge shortfall suggesting weaker-than-anticipated sales of Treo Pro, much slower run-rate for its primary product, the Centro.
Hoffman notes with the majority of the company's revenue U.S.-based, the balance of PALM's fiscal year 2009 (May) results are likely to be similarly weak. He widens $0.32 fiscal year 2009 loss estimate to $1.19.
He says with PALM now poised to post operating cash flow of at least negative $100 million in fiscal year 2009, common equity holders may bear the brunt should the company require additional cash to fund operations.
BAIRD DOWNGRADES GLOBAL PAYMENTS TO NEUTRAL FROM OUTPERFORM
Baird analyst David Koning says while Global Payments (GPN) stock has been a solid relative performer over the past 12 months, he believes deteriorating macro trends and currency present formidable near-term pressures, with currency potentially limiting upside potential in market/economy rally.
Koning says with data points from processors/ISO's suggesting weakening retail sales in September/October, he believes guidance and consensus for GPN may be too high.
He lowers his $2.42 fiscal year 2009 (May) EPS estimate to $2.32 and $2.76 fiscal year 2010 to $2.56, mainly reflecting new forex assumptions. He cuts his target to $38.