Stock Picks: BB&T, JetBlue, Microsoft

Wall Street analysts offer buy, sell, or hold opinions on stocks in the news on July 23

BB&T Corp.: Keefe, Bruyette & Woods equity analyst Jefferson Harralson reiterated an outperform rating on shares of BB&T Corp. (BBT) on July 23, with a $32 price target.

On July 22, the bank holding company reported a second-quarter adjusted profit of 33 cents a share. The average estimate of analysts surveyed by Bloomberg was for a profit of 33 cents a share.

In a brief note, Harralson said that "[w]hile BBT's bottom line continues to benefit" from its August 2009 acquisition of Colonial BancGroup, "credit costs began to mount in the quarter as bad assets were removed from the balance sheet."

Harralson lowered earnings-per-share (EPS) estimates for 2010 to 67 cents from $1.24 and for 2011 to $1.75 from $2.10, reflecting his expectation of elevated credit costs. He said he "continue[s] to like [the] shares."

JetBlue Airways Corp.: Soleil Securities raised a rating on shares of JetBlue Airways Corp. (JBLU) to buy from hold on July 23, with a price target increase to $8 from $7.

On July 22, the airline reported second-quarter net income of 10 cents a share. The average estimate of analysts surveyed by Bloomberg was for a profit of 8 cents a share.

In a brief note, equity analyst James Higgins said the price target increase suggested "upside of 25-30 percent" in the shares.

Higgins raised a 2010 EPS forecast for JetBlue to 40 cents from 32 cents after the company exceeded his second-quarter estimate by 2 cents. He raised a 2011 EPS estimate to 60 cents from 47 cents.

"Simply put, we have more confidence in the earnings outlook and the stock appears attractively valued," the analyst wrote.

Microsoft Corp.: Standard & Poor's equity analyst Jim Yin maintained a buy rating on shares of Microsoft Corp. (MSFT) on July 23. He raised a price target on the shares to $35 from $34.

On July 23, Microsoft, the world's largest software maker, posted record fourth-quarter revenue after the most successful debut of its flagship operating system.

Sales gained 22 percent, the biggest quarterly increase in more than two years, to $16 billion, the company said. Net income topped analysts' predictions, as did revenue for the division that sells Windows. Revenue in the Windows unit rose 44 percent to $4.55 billion. Business division sales, made up mostly of Office software, were $5.25 billion. Microsoft released a new version of Office during the quarter. Server software sales were $4.01 billion.

Fourth-quarter net income climbed 48 percent to $4.52 billion, or 51 cents a share, exceeding the 46-cent average of estimates compiled by Bloomberg. Analysts had predicted Microsoft would have total sales of $15.3 billion in the period, which ended June 30.

In a posting on the S&P MarketScope service, Yin said the company's fourth-quarter EPS beat his estimate of 48 cents.

"We expect sales growth momentum to continue as enterprises refresh their aging PCs," the analyst wrote. "We are also optimistic on the next version of Xbox 360 with its motion-detecting input device, Kinect."

Yin raised a fiscal 2011 (ending June) EPS estimate to $2.34 from $2.21.

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