S&P Upgrades Univision

Also: Analysts' opinions on Aeropostale and UnumProvident

Univision Communications (UVN ): Upgrades to 4 STARS (accumulate) from 3 STARS (hold)

Analyst: Tuna Amobi, CPA, CFA

After Univision's conference call, we are more convinced that it is one of the fastest-growing media companies, with its niche Spanish-language demographic segment. Still, with a 25% retreat in 2004, the stock has lagged S&P's Broadcast & Cable index. Univision trades at 1.5 times estimated 2005 p-e-to-growth (PEG), 34 times 2005 estimated free cash flow and 16.5 times estimated 2005 EBITDA, all ample but sharply narrowed historic multiples vs. its broadcast peers. We think strong third-quarter guidance could likely prove conservative. After Univision's solid second quarter, we have raised our 2004 EPS estimate by 4 cents to 74 cents. Our target price stays at $36, based on relative valuation.

Aeropostale (ARO ): Reiterates 4 STARS (accumulate)

Analyst: Marie Driscoll, CFA

Aeropostale reported July sales up 44%, driven by a 14% comparable-store sales increase. July-quarter sales rose 50% to $195 million on 20% higher comp-store sales. Concurrently, Aeropostale raised its July-quarter EPS guidance to 17 cents from 11 cents. We've reworked our model and are raising our comp-store sales, total sales, and EPS projections for fiscal 2005 (ending January) and fiscal 2006. We now expect comp-store sales to grow about 10% for the rest of fiscal 2005, dropping to a 5% increase for fiscal 2006. Our EPS estimates rise to $1.45 and $1.79, respectively, from $1.30 and $1.61. Our target price rises to $34 from $32, or 19 times our fiscal 2006 EPS estimate.

UnumProvident (UNM ): Reiterates 2 STARS (avoid)

Analyst: Gregory Simcik, CFA

UnumProvident reported second-quarter operating EPS of 43 cents, vs. 41 cents one year earlier, 4 cents ahead of our estimate. EPS include a 2-cent gain related to a change in the retiree medical plan. As for the company's business lines, we estimate Other segment results at 1 cent better than our estimate, Income Protection results were 3 cents better, and Closed Block results were 2 cents worse. We are concerned with Life & Accident results, where sales and earnings were below our forecast. We are raising our 2004 EPS estimate to $1.65 from $1.61 on the second-quarter results, and raising our 12-month target price to $15 from $13, based on a higher multiple for Income Protection.

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