Analyst Actions: Google, Research in Motion, Tellabs, J.B. Hunt, Pall

Comments from Wall Street analysts on some stocks on Friday

Bear Stearns raised its price target on Google (GOOG) to $700. Bear Stearns says it updated its model to reflect a more thorough fundamental look at Google's online search drivers, YouTube's potential revenue contribution, and its efforts in radio and print advertising.

Google shares rose 2.6% to $593.97 during trading on Oct. 5. The stock hit a new 52-week high of $596.81 on Oct. 2.


Research In Motion (RIMM) reported second quarter EPS of $0.50, vs. $0.25 a year ago, on a sharp revenue rise. Morgan Keegan analyst Tavis McCourt says these results topped his estimates, and third quarter guidance was very strong, with revenue and EPS growth expected to be maintained in the 100% range.

McCourt says CDMA Pearl launches and WiFi-enabled 8320 and 8820 should drive continued strong subscriber and device growth for the next two quarters. He notes channel inventory in the second quarter was about flat relative to sales, and RIMM expects a slight uptick in the third quarter with continued operating margin expansion.

He increased his $2.01 2008 EPS estimate to $2.15 and $2.60 for 2009 to $2.98. Given the accelerated growth rates at RIMM and the large total available market (RIMM has less than 2% share of the worldwide handset market), he maintains outperform.

RIMM shares jumped 11.6% to $112.19 - earlier on Oct. 5 it hit a fresh 52-week high of $112.84.


Tellabs (TLAB) cut its third quarter forecast on Oct. 5, sending its stock down about 4% to $9.20.

Goldman Sachs analyst Brantley Thompson says the company's fundamentals are weakening, and sales and gross margin were significantly lower than what he had forecast. He says the company expects gross margin pressure to continue due to mix shift to lower-margin new products.

He believes AT&T's (T) recent discussion regarding ramp of Lightspeed in BellSouth territories limits opportunities for Tellab's access business in coming quarters.

Thompson notes that Tellabs' third quarter EPS guidance was cut significantly to $0.02-$0.03, vs. consensus of $0.06. He cut $0.27 2007 EPS estimate to $0.16, and $0.43 for 2008 to $0.34 (all include ESO), to reflect lower sales in transport, broadband segments. He lowered his $11 12-month target to $9.50.


Truckers were getting jumpstarted on reports Banc of America raised its rating on J.B. Hunt Transport Services (JBHT) to neutral from sell. J.B. Hunt shares rose 4.9% to $27.01 during trading on Oct. 5.


Lehman Brothers analyst Analyst C. Anthony Butler says Pall (PLL) preliminarily reported $646.3 million fourth quarter revenue and 15.2% EBIT margin. While the company was not able to provide EPS (it has delayed filing most recent financials), he thinks it may have exceeded his estimate by $0.03.

Butler believes the underlying fundamentals of Pall's business is strong, but there has been a recent overhang on the stock around its tax issue. He thinks worst is behind Pall, and believes forward tax rate will not change significantly from current levels.

He says while it is impossible to pick bottoms, he believes the risk-reward is skewed to the upside and he would be a buyer of Pall shares. He raised his earnings estimates and $47 price target to $52. He upgraded the stock to overweight from equal-weight.

Pall shares rose 6.5% to $43.43.

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