Analyst Actions: Apple, Ford, CA
Apple Inc. (AAPL; $180.5)
Goldman Sachs adds to Americas Conviction Buy list
Goldman (GS) analyst David Bailey says he is adding Apple to the firm's Conviction Buy list in order to capture the catalyst around the 3G iPhone launch next month and the upside potential from sharply higher projected iPhone sales in the back half of the year. Bailey notes the next-generation iPhone is expected to be launched in June. He continues to expect Apple to beat its 10 million unit sales goal for calendar 2008, driven by broader global distribution and the availability of third-party applications, which he thinks should keep the company well ahead of its competition. Bailey sees Apple almost doubling its available subscriber base in calendar 2008 vs. calendar 2007.
The analyst sees $5.17 fiscal 2008 (Sep.) EPS, rsing to $6.36 in fiscal 2009. He raised his $185 price target on the stock to $220.
Ford Motor Co. (F; $6.8)
Calyon downgrades to neutral from add
On May 22, Ford said it expects to be about breakeven company-wide in 2009. Caylon analyst Mark Warnsman says the automaker looks headed toward the third version of its Way Forward plan after saying it wouldn't meet objective of North American and total corporate profitability in 2009 as it laid out in a second version of the plan. Warnsman says the timing of the news (a short time after Ford's upbeat first quarter EPS announcement) and a lack of detailed plan to address the shortfall until July, suggests mamnagement was blindsided by large adverse moves in its 2008 forecast, prompting reconsideration of its 2009 business plan.
Warnsman says Ford's revised prospects and constrained balance sheet flexibility make him wary of building a further position in the stock absent identification of additional restructuring actions.
CA, Inc. (CA; $25.36)
Goldman Sachs raises estimates, maintains buy
CA posted fourth quarter GAAP EPS from continuing operations of 13 cents. Goldman analyst Sarah Friar says CA reported a solid fourth quarter; cash flow and bookings grew 32% and 30%, respectively. She says the company's bookings and fiscal 2009 (Mar.) outlook indicates future strength well in excess of analysts' consensus expectations. Friar thinks CA's execution and cost management have improved over the last few quarters. She believes restructuring activities remain well on track and CA's focus on new license sales and more disciplined cross-selling processes are paying off in better business momentum.
The analyst says CA remains her favorite idea for calendar 2008. She raised her $1.45 fiscal 2009 EPS estimate to $1.50 and her $1.57 fiscal 2010 forecast to $1.67. Friar also raised her $30 12-month price target to $33.