Analyst Actions: Motorola, UAL, Limited Brands
CREDIT SUISSE UPGRADES MOTOROLA TO NEUTRAL FROM UNDERPERFORM
Credit Suisse analyst Kulbinder Garcha says that owing to his belief that Motorola's (MOT) Mobile Devices losses have bottomed, and given Motorola's valuation which suggests limited downside from current levels, he moves to neutral.
Garcha has more confidence that operating losses in Devices will narrow to $1.2 billion in 2009 vs. $1.5 billion in 2008, as MOT's spending reductions of $1.5 billion for 2009 appear to be on track. He notes non-handset businesses deteriorate, but are still resilient.
He raises $0.28 2010 EPS estimate to $0.37, given increased confidence in management's focus on spending reductions. He maintains $4.50 price target.
BOA/MERRILL LYNCH UPGRADES UAL CORP. TO BUY FROM NEUTRAL
Bank of America/Merrill Lynch analyst Michael Linenberg says he upgrades UAL Corp. (UAUA) following its 51% share price decline year-to-date which he feels is overdone.
While UAUA, like most airlines, faces a very challenging 2009, Linenberg thinks those concerns more than adequately discounted in share price, but doesn't think UAUA share price fully accounts for significant decline in fuel prices. He notes UAUA has been very disciplined in the allocation of capacity, thus it can still achieve profitability for 2009 in spite of the recession.
He cuts $14 price target to $10.
CITIGROUP UPGRADES LIMITED BRANDS TO BUY FROM HOLD
Citigroup analyst Kimberly Greenberger says she is upgrading Limited Brands (LTD) on the company's strong cash flow and dividend yield of 8%.
She says, although she believes LTD will violate one of its debt covenants, she thinks the company can get covenant relief, and will likely provide an update on its strategy when it posts fourth quarter results Feb. 26.
Meanwhile, Greenberger believes LTD's $0.60 annual dividend is secure. She says, while fundamentals likely remain challenging for LTD through the recession, she believes she's factored this into her $0.81 fiscal year 2010 (January) EPS estimate. She has a $10 target price.