Analyst Actions: Apple, JPMorgan Chase, Furniture Brands
GOLDMAN DOWNGRADES APPLE TO NEUTRAL FROM BUY
Goldman Sachs analyst David Bailey says he downgrades Apple (AAPL) on concerns about consumer spending in seasonally softer first half of 2009 and AAPL's valuation premium.
Bailey notes that checks in Asia for the December quarter were better for AAPL than for other PC and smartphone vendors, but some nicks started to emerge. He says shipments of MacBooks, iPod nanos and iPhone were all slightly lower than what was expected going into the quarter, and AAPL should face tougher environment in the March and June quarters as consumer demand takes another leg down.
He cuts $5.13 calendar year 2009 EPS estimate to $4.75 and $125 12-month target to $115.
MERRILL DOWNGRADES JPMORGAN CHASE TO UNDERPERFORM FROM NEUTRAL
Merrill Lynch analyst Guy Moszkowski says it is increasingly clear that credit costs in the U.S. will get much worse, particularly in credit cards and commercial lending.
Moszkowski cuts JPMorgan Chase (JPM) $0.25 fourth quarter EPS estimate to $0.11 loss on expectation of another significant round of credit reserve builds exacerbated by capital markets activity, mark-to-market losses. He cuts $3.21 2009 EPS view to $1.98 to reflect the deteriorating economy and impact of WaMu loan portfolio.
He says the key driver is expectation of loss rates moving up in line with higher unemployment. He cuts $44 price objective to $27.
RAYMOND JAMES CUTS FURNITURE BRANDS TO UNDERPERFORM FROM MARKET PERFORM
Raymond James analyst Budd Bugatche says there are many moving parts where Furniture Brands International (FBN) management continues to avow a transformation strategy.
Bugatche notes that Thursday night, the company said it plans to cut 1,400 jobs; it said the elimination of direct-production-related positions (catalyzed by continued weak demand) will help it avoid incremental factory downtime costs, but not that it would deliver additional run-rate savings.
He says the company may survive this period, but it seems unlikely it can outperform peers or market until financials settle down and its turnaround strategy gains traction. He sees a $4.53 2008 loss per share.