Analyst Actions: Hewlett-Packard, Yahoo, Chiquita
BANC OF AMERICA SAYS HEWLETT-PACKARD'S FOURTH QUARTER OUTLOOK IS ABOVE CONSENSUS
Banc of America analyst Scott Craig notes that Hewlett-Packard (HPQ) expects to report $33.6 billion fourth quarter revenue, above his/consensus forecast at around $33 billion; non-GAAP EPS of $1.03 above his $1.01 forecast and consensus estimate of $1.00.
Craig says more importantly, HP's fiscal year 2009 (October) revenue guidance is $127.5-$130 billion, vs. his estimate of $133.6 billion and consensus $135.1 billion, and non-GAAP EPS of $3.88-$4.03 compared to his $3.90 estimate and $3.85 consensus.
He notes guidance assumes better-than-expected margin, which may be tough in this environment. He says HP stock still appears to be very inexpensive, particularly relative to its peers. He has a $50 price target and rates the stock as buy.
NEEDHAM MAINTAINS HOLD ON YAHOO
Needham analyst Mark May says the search for a new CEO at Yahoo (YHOO) is a move many large investors have advocated given the failed Microsoft (MSFT) deal and Google (GOOG) partnership, and seems appropriate to him.
Given that the search has been initiated, May thinks the likelihood of an external candidate being chosen is above average. He notes continued distractions at Yahoo and challenges in the operating environment support his cautious view on stock.
That said, he also notes that Yang's departure as CEO could signal a new position by the board to reconsider terms of a merger with Microsoft.
BB&T CAPITAL UPGRADES CHIQUITA TO BUY FROM HOLD
BB&T Capital analyst Heather Jones says since Chiquita Brands International (CQB) reported third quarter earnings on Oct. 30, CQB shares have declined 31.7%, vs. a 10.8% drop for S&P 500, despite a 7.6% increase yesterday, which was triggered by insider buying.
Jones thinks the pressure is likely attributable to fund selling, as incremental fundamental data is positive. She adds that management has done an impressive job in cleaning up the balance sheet.
She notes CQB is very comfortably positioned with regard to its debt covenants. She expects the company to continue to reduce debt, as its cash flow has been solid. She sees $1.55 2008 EPS and $1.17 2009. Jones has a $14 price target on the stock.
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