S&P Upgrades Amgen to Accumulate

Also: analysts' opinions on State Street and Media General

Amgen (AMGN ): Upgrades to 4 STARS (accumulate) from 3 STARS (hold)

Analyst: Frank DiLorenzo

Amgen completed its acquisition of Immunex for about $10.3 billion. After a sharp sell-off in its shares, Amgen is now attractive, with the strongest lineup of biotech drugs in the industry. S&P sees pro forma combined revenues at $5.8 billion in 2002 and $7.1 billion in 2003. S&P estimates proforma earnings per share of $1.30 in 2002, $1.65 in 2003, and $2.03 in 2004. S&P's EPS growth rate of 18.9% results in a price/earnings to growth ratio of 1.0 on the 2003 EPS estimate. While S&P has become less bullish on Immunex's Enbrel drug because of manufacturing constraints and competition, S&P has already priced this factor into Amgen's stock price.

State Street Corp. (STT ): Upgrades to 4 STARS (accumulate) from 3 STARS (hold)

Analyst: Stephen Biggar

The company posted second quarter earnings per share of $0.54 vs. $0.53, in line with estimates. Revenues rose a modest 3%, but State Street again had good control of expense growth. Assets under management increased 6%, which is impressive amid equity market declines and highlights the company's success in new business wins. After a recent price decline, State Street shares offer an attractive entry point in anticipation of stabilizing core macro trends in 2003. The high $40's price target would give shares a return to a high-teens price-earnings multiple on S&P's $2.50 EPS estimate for 2003.

Media General (MEG ): Adds to coverage with 4 STARS (accumulate)

Analyst: William Donald

Media General posted second quarter earnings per share of $0.70 vs. $0.33. Revenues rose 2.9% as a 16.5% advance in broadcast advertising sales and a 24% jump in interactive media revenues offset a 3.9% decline in newspaper revenues. Operating profit jumped 30%, helped by sharply lower newsprint costs and by expense controls. Net income includes $11 million in a negative swing from 33%-owned SP Newsprint. S&P sees $2.25 EPS for 2002, and a 20% advance to $2.70 in 2003. Media General has appreciated 8% year to date, but is still 11% below S&P's $61 12-month target.

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