Goldman keeps sell rating, narrows 2009 loss estimate
On Apr. 17, Citigroup posted a first-quarter operating loss of 18 cents per share. Goldman analyst Richard Ramsden said on Apr. 200 that while the first-quarter headline number was positive, credit losses, which are critical in drawing a line in stabilizing Citi's capital base, continue to grow at a rapid rate.
Ramsden narrowed his 50 cents 2009 loss estimate to a 25-cent loss and kept his 20 cents 2010 EPS estimate. He set a 2011 estimate of 40 cents EPS. The analyst remains focused on Citi's earnings power, and made no change to his sell rating, and $1.50 12-month share price target. He said the key question mark in his mind remains what Citi's earnings power will be on the other side of the crisis.
Citi Investment Research upgrades to buy from hold
Citi Investment Research analyst Mark Mahaney, in an Apr. 20 research note to investors, made what he called a "highly controversial call" in upgrading the Seattle-based company. The aggressive discounting of last year is easing up, Mahaney said. He believes the company is being more efficient with labor costs, and marketing expenses may lessen this year. Competitor eBay Inc. has said it is retreating from in-season retail products, setting Amazon up to gain market share, Mahaney said.
However, Mahaney cautioned that Amazon.com shares are already up 52% this year, and as a company based on consumers' wants, not needs, it faces risk from the ongoing recession. Nevertheless, the recession's impact on retailers in general, forcing many -- such as Circuit City Stores Inc. and Linens N Things -- into bankruptcy protection or liquidation, has likely benefited Amazon, Mahaney said.
Las Vegas Sands (LVS)
JPMorgan upgrades to overweight from neutral
JPMorgan analyst Joseph Greff said on Apr. 20 that his upgrade was based on 1) reasonable near-term, achievable expectations for the company's Las Vegas Strip properties; 2) stabilization in its Macau properties' operations; 3) the potential for continued improved investor sentiment in front of its early 2010 opening of its Singapore property; 4) better appreciation of its liquidity position; 5) the company's ability to improve its balance sheet and enhance its liquidity through asset sales; and 6) high short interest.
However, Greff pointed out that his upgrade is not without (meaningful) risks. He set an $8 year-end 2009 price target on the stock.
Zions Bancorp. (ZION)
SunTrust Robinson Humphrey upgrades to buy from neutral
SunTrust Robinson Humphrey analyst Jennifer Demba said on Apr. 20 that the regional bank should be able to survive the credit crisis without additional capital. "Industry net interest margins are improving and Zions has a very strong core earnings stream to support high loan losses spread over the next few years," Demba wrote in a note to clients.
Demba, who has a $24 target price on the stock, also revised her earnings estimates. She now expects a first-quarter loss of $1.71 per share, down from a prior estimate of a loss of $2.37 per share. The Salt Lake City-based bank will report first-quarter earnings after the market closes Monday.