Analyst Actions: MasterCard, Electronic Arts, ADC Telecom
COWEN DOWNGRADES MASTERCARD, VISA, PAYCHEX
Cowen analyst Moshe Katri says he downgrades MasterCard (MA) and Visa (V) to underperform from outperform. He cuts MasterCard on expectations of tougher comps for purchase volume growth impacting revenue and EPS growth. He cuts Visa on expectations of increasingly tougher comps for debit, credit purchase volume growth.
In addition, Katri cuts Paychex (PAYX) to underperform from neutral after drop in non-farm payrolls, potential for significant increase in unemployment, larger-than-expected increases in failure of small businesses, prolonged recession, further drops in float income, and premium valuations.
WEDBUSH DOWNGRADES ELECTRONIC ARTS
Wedbush analyst Michael Pachter downgrades Electronic Arts (ERTS) to buy from strong buy. He says as ERTS stock hovers near a 7-year low and the company continued its recent history of disappointment and significantly cut fiscal year 2009 (March) guidance on weaker-than-expected sales across the board.
Pachter notes, while ERTS plans to further reduce its cost structure and headcount, he's no longer confident that the company is taking the steps necessary to achieve its fiscal year 2011 goals of $6 billion in revenue and $1.5 billion in operating profit.
He cuts $1.40 fiscal year 2009 EPS estimate to $0.75 and $2.10 fiscal year 2010 EPS to $1.50. He also lowers his $38 target to $25.
MORGAN KEEGAN DOWNGRADES ADC TELECOMMUNICATIONS TO MARKET PERFORM
Morgan Keegan analyst Simon Leopold downgrades ADC Telecommunications (ADCT) to market perform from outperform.
Leopold says fourth quarter results are fine with sales of $352 million vs. his $356 million estimate and the Street's $347 million; $0.19 EPS is ahead of his $0.11 and the Street's $0.13. He notes lower operating expenses and other income provided the boost.
But he says poor first quarter forecast for sales of $255-$290 million with $0.06 loss to $0.06 EPS vs. consensus estimates for $317 million and $0.09 EPS are likely pressuring the stock. He also notes that the company's release and 8-K lacked typical detail and reduced disclosures add to his concern.
He cuts $0.66 fiscal year 2009 (October) EPS estimate to $0.32.