Raymond James Cuts Maytag Estimates

Analyst Sam Darkatsch says the home-appliance maker met his estimates, yet he notes more weakness is ahead for the Hoover segment

Raymond James cut its estimates on Maytag (MYG ), the nation's third-largest home appliance retailer.

Analyst Sam Darkatsch says the 56 cents (excluding items) met his estimate. Wall Street was expecting 57 cents earnings per share. He notes management forecast 51 cents to 56 cents fourth-quarter earnings per share, and assumes its Hoover segment will remain a problem as it continues its recovery strategy. However, chairman and chief executive Ralph Hake says Maytag Appliances "witnessed solid gains in market share as a result of new product introductions within an environment of strong industry shipments."

Darkatsch cut the $2.34 2003 earnings per share estimate to $2.18, and cut the $2.55 2004 estimate to $2.40. Still, Maytag may have as much as $3 in earnings per share power next year, may initiate headcount reductions, and will see incremental business generated by multiple new products. As a result, he's applying a price-earnings multiple of 15 (in-line with the historical median) to the 2004 earnings per share estimate, yielding a $36 target. Darkatsch rates the shares as strong buy.

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