Analyst Actions: UBS, ValueClick, Baidu.com, Netgear
CITIGROUP MAINTAINS HOLD ON UBS
Citigroup analyst Jeremy Sigee says UBS' (UBS) fourth quarter and 2007 losses came in as preannounced. But outstanding net exposures, with some new disclosures, appear to be bigger than he had expected, with some still to be clarified (by UBS). Sigee also says he found asset flows disappointing in the core private banking business and in asset managememt.
Regarding his hold rating, Sigee says he's become more cautious on investment banking after recent capital market disruptions. He notes UBS has lost market share and incurred proprietary losses in fixed income in recent quarters, and may struggle to regain momentum here.
He believes these company-specific and broader capital market issues may continue to impact results a while longer.
BAIRD UPGRADES VALUECLICK TO OUTPERFORM FROM NEUTRAL
Baird analyst Mark Bacurin says ValueClick's (VCLK) fourth quarter revenue and adjusted EBITDA topped forecasts. He bases his upgrade on: what he views as attractive valuation, his increased confidence in achievability of revised 2008 estimate, strong balance sheet, and viability of potential takeout.
Bacurin says his increased confidence in the company's $0.78-$0.81 2008 EPS on $730-$745 million revenue guidance is based on a generally more conservative growth expectation, a more stable outlook for lead generation with an FTC settlement agreement, and continuing strong performance from MeziMedia/comparison shopping.
He lowers 2008 revenue forecast by $19 million to $740 million and operating EPS by $0.03 to $0.91. He has a 30 target price on the stock.
RBC CAPITAL UPGRADES BAIDU.COM
RBC Capital analyst Jordan Rohan says Baidu.com's (BIDU) fourth quarter GAAP EPS beat his and consensus estimates. He says first quarter guidance is lower than expected, but thinks that's already priced in. He cuts $4.64 2008 EPS estimate to $4.00 and $8.19 for 2009 to $7.48. He says below-expected guidance still implies 93%-99% growth.
Rohan believes the company continues to dominate the Chinese search market and should add another growth driver in the long term by monetizing its non-search traffic through display and other formats. He thinks very few companies on Internet have BIDU's growth profile.
He cuts 400 price target to 361, as target is based on a 50 p-e. He says the long-term investment thesis is still intact; he upgrades to outperform from sector perform.
UBS FINANCIAL CUTS ESTIMATES FOR NETGEAR
UBS Financial analyst Maynard Um says Netgear's (NTGR) $198.3 million fourth quarter revenue was within the company's guidance, but $0.41 EPS missed his $0.44 estimate and $0.45 consensus forecast due to higher air freight costs.
He cuts his $1.80 2008 EPS estimate to $1.74 and $2.08 for 2009 to $1.91. He notes, however, he expects air freight issues to normalize in the coming quarters. Also, he says fundamentals appear solid, with management citing market share gains.
He expects new RangeMax N and ReadyNAS Dual products to ship in the first quarter 2008, with a more meaningful impact from these products in the second quarter. He also notes management indicated little impact from the broader economy as broadband penetration globally continues to grow. He reiterates a buy rating with a 31 target price for the stock.