Analyst Actions: HP, Nordstrom, Consol Energy
CREDIT SUISSE KEEPS OUTPERFORM ON HEWLETT-PACKARD
Analyst Robert Semple says Hewlett-Packard (HPQ) reported better-than-expected fourth quarter results, raised its fiscal year 2008 outlook on strength in both its server and PC business along with cost savings. HP said that the overall demand environment remained solid, with steady growth in consumer and improving demand in enterprise (1/3 of company revenue).
While Semple remains more optimistic about global economy than most, he believes HP is the best defensive name to own in IT hardware given its strong recurring revenue, geographic diversity, significant cost cutting capabilities, which he believes will drive material upside of at least $0.20 to his new $3.37 fiscal year 2008 (October) EPS estimate, which is up from $3.24. He has a $60 price target on the stock.
GOLDMAN SAYS DON'T CHASE NORDSTROM SHARES
Analyst Adrianne Shapira says Nordstrom (JWN) third quarter operating EPS of $0.59 beat her/consensus $0.53/$0.52. She says the upside driven largely by better expense leverage from lowered incentive costs.
Shapira cuts her 1.4% fourth quarter same-store sales growth estimate to -0.5%, and $0.94 EPS to $0.92. She raises $3.06 fiscal year 2009 (January) EPS estimate to $3.10 due to the company's aggressive third quarter share repurchase activity, and sees $3.53 fiscal year 2009 EPS. She notes her net income estimates for these years actually moves lower by 3% on account of lower sales and margin pressure.
She advises investors to not chase the stock given that second half EPS were actually more or less in-line and macro concerns remain unabated. She feels further sales and margin risk exists. She cuts her $46 price target to $42. She keeps a neutral opinion on the stock.
RAYMOND JAMES UPGRADES CONSOL ENERGY TO STRONG BUY FROM OUTPERFROM
Raymond James analyst James M. Rollyson says the pullback in Consol Energy's (CNX) share price provides a compelling entry point. He notes since hitting a new high less than two weeks ago, stock has pulled back more than 14%.
At the same time, Rollyson says the company's outlook has improved further. He notes that the strong international coal market is driving interest in U.S. coal. The combination of higher international prices, increased levels of exports, and beginning of a tightening U.S. inventory picture has begun to push U.S. coal prices upward. He says the above aforementioned factors drives him to upgrade the stock. He has a $76 12-month price target.