Lehman Cuts Estimates on Linens'n Things
Lehman slashed its estimates on Linens'n Things (LIN ), citing the company's third quarter outlook and possible sale.
Analyst Alan Rifkin says business trends continue to be very poor. He believes the company's holiday season is in jeopardy as product transitions are not taking place as effectively as thought. As a result, he slashes his 2005 earnings per share estimate by 50 cents to 63 cents and his 2006 estimate by 40 cents to 90 cents. In response to the news of a possible sale of the company, he says there's talk that Bed Bath & Beyond (BBBY ) could be a suitor. He says that given huge cultural differences between these two companies, a Bed Bath & Beyond/ Linens'n Things combination makes no sense. The analyst thinks investors should value the stock on its fundamentals, not takeout speculation, and rates it at underweight.