Analyst Picks and Pans: Palm, Boston Private, MTS Systems
Palm Inc. (PALM)
Canaccord Adams reiterates sell
Deutsche Bank keeps buy
Palm Inc.'s fiscal first-quarter results and guidance left analysts split on the likely outcome of the smart phone maker's turnaround effort.
Palm said after the close of trading Sept. 17 that it shipped 823,000 phones during the three months ended Aug. 28. But it did not say how many were the Palm Pre, the company's best hope for competing with the BlackBerry from Research in Motion (RIMM), and Apple's (AAPL) iPhone.
Palm also forecast sales for the full year of $1.6 billion to $1.8 billion, while analysts were expecting only $1.57 billion, according to Thomson Reuters. But for the current quarter, the company projects $240 million to $270 million in sales, below analysts' estimate of $344.4 million.
In a note to investors Sept. 18, Canaccord Adams analyst Peter Misek said "questions surrounding management's soft (second-quarter) guidance will limit near-term upside in the stock."
He added that shares are already overpriced "given the abundance of new smart phone offerings on the horizon." He reiterated a sell rating on the stock.
Deutsche Bank's Jonathan Goldberg took the opposite view on Sept. 18. He kept a buy rating on shares, telling clients, Palm's uneven outlook for the next few quarters suggests the company is lining up new carriers for its phones.
"We think momentum remains healthy," he said.
Boston Private Financial (BPFH)
RBC upgrades to outperform from sector perform
RBC analyst Gerard Cassidy said on Sept. 18 that Boston Private announced the sales of Gibraltar Private Bank & Trust and RINET Co., non-core divestitures that follow the sales of Sand Hill and Boston Private Value Investors earlier in 2009. Cassidy said Boston Private continues to streamline itself, removing higher risk assets from its balance sheet while improving capital ratios.
The analyst narrowed his $0.53 2009 loss per share estimate to a $0.27 loss, and raised his $0.05 2010 EPS view to $0.30. He also raised his $4.80 12-month price target to $6.50.
MTS Systems (MTSC)
Janney Montgomery Scott downgrades to neutral from buy
Liam D. Burke of Janney Montgomery Scott downgraded his rating on the Eden Prairie, Minn., company on Sept. 18 because the stock of the industrial testing and position sensing equipment maker reached what he considers fair value.
"Although business is getting no worse and the company is continuing to generate earnings and free cash flow, MTS shares are fairly valued," which he puts at $30.
"The company continues to manage the business for long-term growth during a period of economic uncertainty and is capable of generating those results over the long-term," Burke wrote in a client note.