Analyst Picks and Pans: UTX, WFMI, MDT, OXY, APA

United Technologies Corp. (UTX)

Jefferies & Co., Sterne Agee cut estimates

United Technologies, which owns jet engine maker Pratt & Whitney, Sikorsky Aircraft, Otis elevator and other business, cut its 2009 earnings-per-share forecast last week to between $4 and $4.50, including restructuring charges. In December, the company forecast a profit of $4.65 to $5.15 per share. The Hartford-based company also said it will reduce its global work force by 11,600 jobs, or 5 percent.

Analyst Howard A. Rubel of Jefferies & Co. on Mar. 16 cut his earnings estimate for 2009 to $4.20 per share from $4.45 per share. He reduced his 2010 estimate to $4.60 per share from $4.80 per share. Rubel's new estimates account for a $600 million restructuring that United Technologies announced last week in addition to a previously announced $150 million in restructuring, as well as expected savings and some offsetting gains.

Meanwhile, analyst Nicholas Heymann of Sterne Agee on Friday cut his 2009 earnings estimate to $4.20 per share from $4.50 per share. For 2010, he cut his estimate to $4.65 per share from $4.70 per share. His previous estimate of $4.50 per share was based on "severely stressed" revenue at Carrier and Otis in addition to pension expense and the impact of the strengthening dollar, he said.

Whole Foods Market Inc. (WFMI)

FBR Capital Markets upgrades to market perform

FBR Capital Markets analyst Karen Short upgraded Austin, Texas-based retailer Whole Foods Market on Mar. 16 to market perform from underperform and raised her price target on the stock to $14. On Mar. 13, Whole Foods shares closed up 1.9% at $14.38.

Last month, Whole Foods said it expects to earn 71 cents to 76 cents per share for 2009, while sales are seen at $8.3 billion. Short says these expectations are "possibly too conservative" -- she expects the company to earn 76 cents per share this year and 84 cents per share next year, on sales of $8.16 billion and $8.61 billion, respectively -- since last quarter's results showed that Whole Foods was doing an excellent job at cutting costs, "a testament to management's skill in adapting to a rapidly changing environment."

In its fiscal first quarter, Whole Foods said same-store sales fell by 4% from a year ago.

Short also said the company's recent settlement with the Federal Trade Commission was "favorable." Whole Foods agreed to settle federal regulators' antitrust charges by putting 13 stores -- 12 Wild Oats stores, 1 Whole Foods store -- up for sale. The company will also sell leases and assets of 19 closed Wild Oats stores. Whole Foods acquired the Wild Oats chain in 2007.

Medtronic (MDT)

Lazard Capital reaffirms hold

Deutsche Bank-North America reaffirms buy

Two analysts brushed off the potential for a heavy impact to Medtronic's stock Mar. 16 after the medical device maker disclosed more deaths possibly related to its heart device wires.

On Mar. 13, the company said as many as 13 patients may have died as a results of problems with wires, or leads, that connect its Sprint Fidelis implantable defibrillators to a patient's heart. The product has been off the market since October 2007 following the company's disclosure that five patients deaths may have been caused by broken wires.

"We do not see this news as cause for significant concern because the Fidelis lead has been off the market for over a year, physicians have been aware of the problems for quite some time, and 13 deaths is a relatively small number," said Lazard Capital markets analyst Dr. Sean Lavin, in a note to investors. "While it is possible that a few hospitals or physicians may switch away from Medtronic's devices at this time, we believe that most who were going to make a switch due to the Fidelis issue already have." He reaffirmed a hold rating on the stock.

Meanwhile, Deutsche Bank-North America analyst Tao Levy reaffirmed a buy rating. "[W]e believe that the relatively low number of deaths, the increasing time elapsed from the date that Medtronic pulled the product off the market, and robustness of its other ICD leads being sold, give us comfort of the limited impact on Medtronic's forward financial performance," Levy wrote in a note to investors.

Occidental Petroleum (OXY)

Plains Exploration & Production (PXP)

Denbury Resources (DNR)

Venoco Inc. (VQ)

Credit Suisse cuts each to neutral from outperform

Apache Corp. (APA)

Credit Suisse raises to outperform from neutral

Analyst Jonathan Wolff said that on Mar. 13 he cut his oil and U.S. NYMEX natural gas price views for the short- and longer-term. Now, with the recent outperformance of what he calls "oily E&Ps" vs. "gassy producers," and more significant changes made to his long-term oil price forecast, he cut his ratings on Occidental, Plains, Denbury, and Venoco to neutral from outperform, as many oil producer valuations look more full while asset growth is likely to be more constrained.

Meanwhile, Wolff sees long-term value in gas, so he lifted Apache to outperform from neutral on its large North American gas position.

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