Analyst Actions: Micron Technology, Prologis, Orbital Sciences
MICRON TECHNOLOGY, INC.
Goldman Sachs maintains sell
Micron Technology (MU) posted a first-quarter loss. Goldman analyst James Covello says the company's calendar fourth quarter pro forma loss of $0.70 was $0.19 wider than his estimate, and $0.25 wider than the Street's view. He notes that $1.4 billion sales were 20% above his estimate and 6% above the Street's forecast. Covello says EPS downside was driven by lower gross margin, higher other expense, and higher taxes. He maintains his estimates for a $2.40 calendar 2009 loss per share and a $1.55 calendar 2010 loss. Covello says that while current memory production cuts should be a positive for average selling prices in 2009, he still expects Micron to generate significant losses, potentially requiring a capital raise in the first half of 2010. He maintains his $1.80 six-month price target.
Deutsche Bank ups to buy
Prologis (PLD) received $1.26 bilion for fourth-quarter contributed property. On Dec. 23, the company agreed to sell its China operations and Japan property fund interests for $1.3 billion in cash plus assumed liabilities. Deutsche Bank analyst Lou Taylor says he upgraded the shares from hold, and thinks Prologis has significantly reduced its liquidity risk. He sees liquidity improving further as the company sells completed developments into its funds. Taylor expects availability under the company's credit line to improve after the China sale, to $2.5 billion from $1.2 billion. He sees the company surviving the liquidity crisis, and believes there significant value in Prologis shares. The analyst still sees $3.50 2008 funds from operations per share, with FFO of $1.90 in 2009. He keeps his $15 target.
ORBITAL SCIENCES CORP.
Jefferies reiterates buy
Orbital Sciences (ORB) received a NASA contract. Jefferies analyst Howard Rubel says Orbital was one of two companies chosen by NASA to provide commercial resupply service (CRS) to the International Space Station from 2010-2016. Rubel says Orbital has signed a CRS contract but needs task orders to carry out the work and recognize revenues; he expects a task order in early 2o009. The analyst thinks revenues in the 2011 time period should be well in excess of $300 million, and believes Orbital could be generating revs of about $600 milliom from the Taurus II and CRS program combined. Rubel thinks the award has the potential to produce net present value of $1.00-$2.00 per share for Orbital. He has a $24 price target.