S&P: Still Hold Apple

Also: Analysts' opinions on Charter Communications and Paxar

Apple Computer (AAPL ): Reiterates 3 STARS (hold)

Analyst: Megan Graham-Hackett

Apple launched the new iMac G5 in Paris, which had been delayed by a few months due to supply availability issues. The new iMac features a 17- or 20-inch LCD, and is about 2 inches thick, with a built-in combo drive or DVD/CD burner. Originally, the new iMac was expected to be available by the beginning of the back-to-school season, and now is slated for shipping in mid-September. We have made no change to our fiscal 2004 (ending September) earnings per share estimate of 64 cents. At a price-to-sales ratio of 1.8, Apple trades above the peer average, but with $12 per share in cash and equivalents, we view the shares as worth holding.

Charter Communications (CHTR ): Reiterates 3 STARS (hold)

Analyst: Tuna Amobi, CPA, CFA

Charter unveiled details of its VoIP telephone partnerships. Level 3 (LVLT ) and Sprint (FON ) would provide long distance and local connectivity in selected Charter markets, while Accenture (ACN ) would anchor provisioning support. Charter says it is exploring other potential partners to achieve maximum cost savings and flexibility. We note a similarity in the VoIP deployment approach recently adopted by some cable peers. We think VoIP phone should help with long-term penetration of Charter's bundled services, but remain conservative on expected profitability of the outsourced model.

Paxar (PXR ): Reiterates 4 STARS (accumulate)

Analyst: Markos Kaminis

As Paxar has shifted manufacturing to Asia and other overseas locations, matching its customers' efforts, we believe it is regaining market share lost in 2003. We project EPS benefits as the company gains leverage from manufacturing capacity, and gets a boost from the consolidation of operations in North America and Western Europe. We are increasing our 2004 EPS estimate by 9 cents to $1.16 and our 2005 forecast by 10 cents to $1.32. Based on upward adjustments to our near-term free cash flow forecasts within our discounted cash-flow model, we are raising our 12-month target price to $25 from $22.

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