Analyst Picks and Pans: RIM, Marvel Entertainment, TD Ameritrade
Research In Motion (RIMM) Credit Suisse upgrades to outperform from neutral
Following an extensive review of the smartphone market, Credit Suisse analyst Kulbinder Garcha upgraded shares of BlackBerry maker Research In Motion, as well as raised his earnings estimate and target price.
Garcha noted, based on his new proprietary model, which takes into account total cost of ownership, income distribution and GDP to forecast long-term smartphone volumes globally, he materially raised his smartphone volume estimates for 2009 and 2010 to 176 million and 223 million, from 158 million and 187 million previously.
He raised his earnings per share estimate for RIM for fiscal year 2011 (February) by 9% to $5.32 (vs. $4.86 consensus forecast).
Garcha also raised his $76 price target to $95, and given the over 29% upside from current levels (before market open) he upgraded RIM shares to outperform from neutral.
Marvel Entertainment (MVL) Lazard Capital Market downgrades to hold from buy
Marvel Entertainment was downgraded to hold from buy by Lazard Capital Markets analyst Barton Crockett, who said the buyout offer received from Walt Disney (DIS) on Monday will likely lock Marvel's share price within a limited range.
"Barring a competitive bidding situation, which we see as unlikely, Marvel stock is now a Mickey Mouse story -- swinging with Disney's stock price, with limited upside to the takeover offer," wrote Crockett in a note Tuesday.
Disney made a $4 billion offer for Marvel and its roster of superhero characters on Monday. The deal gives Marvel shareholders $30 per share in cash and 0.745 Disney shares for every Marvel share they own. That valued Marvel shares at roughly $50 -- above Crockett's previous price target of $46.
Marvel's stock soared 25% to $48.37 on Monday.
TD Ameritrade (AMTD) BMO Capital Markets upgrades to outperform from market perform
Online brokerage TD Ameritrade Holding is posting solid trading activity and has a strong long-term outlook, said a BMO Capital Markets analyst Tuesday, upgrading the shares to outperform from market perform.
The company's trends on new client accounts and assets have been "solid" for the past several quarters, wrote analyst Michael Vinciquerra. He set a $23 price target on TD Ameritrade shares, which closed at $19.24 Monday.
The typical seasonal pattern of lower August trading didn't happen, he said. According to his checks, retail trading actually surged 15% in August from July.
Vinciquerra also noted that the brokerage is boosting earnings by funneling its customers' credit balances from brokerage accounts to its money-market deposit accounts, and will be in a good position to increase profit when the government lifts interest rates.
Its acquisition of options-trading specialist thinkorswim, completed during its fiscal third quarter, is also going to improve product offerings and grow TD Ameritrade's client base, Vinciquerra added. TD Ameritrade said in June that it expects the deal to add 10% to 15% to fiscal 2011 earnings.