Stock Picks: Bristol-Myers, Qualcomm, Dish Network, Kimberly-Clark

Wall Street analyst opinions on stocks making headlines in Tuesday's market

Bristol-Myers Squibb Co.: Barclays Capital analyst C. Anthony Butler reiterated an overweight rating on shares of drugmaker Bristol-Myers Squibb (BMY) on Mar. 2.

A committee of U.S. regulatory advisers recommended on Mar. 1 that Bristol-Myers' experimental drug belatacept should be allowed on the market. The outside panel voted 13-5 that the Food and Drug Administration approve the drug for the prevention of kidney transplant rejection because the benefits of the medicine outweigh the risks when compared with the older generic drug cyclosporine.

Butler said in a Mar. 2 note that "[w]e believe that belatacept will be a welcomed therapeutic option for patients who can not tolerate or take the current standard of care immunosuppressants, namely calcineurin inhibitors and cyclosporine." He said he projects that belatacept will receive a positive decision from the FDA in May 2010.

The analyst estimates that belatacept will generate peak sales of $500 million, vs. an earlier forecast of $800 million.

Butler kept his price target of $26 on the shares unchanged.

Qualcomm Inc.: Standard & Poor's equity analyst James Moorman reiterated a buy opinion on shares of Qualcomm Inc. (QCOM) on Mar. 2.

Qualcomm, the largest maker of mobile-phone chips, said on Mar. 1 that it plans to buy back as much as $3 billion of its shares and will boost its dividend by 12% to 19 cents a share from 17 cents. The program replaces a $2 billion buyback plan, which was recently completed with a $1.7 billion repurchase.

Moorman said in a Mar. 2 posting on the S&P MarketScope service that he expects average selling prices (ASPs) for the company's chipsets to stabilize following a recent drop, and expects demand to pick up in the latter part of 2010 as smart phone demand continues to increase.

"We believe the shares are attractive at current levels, particularly with the new buyback plan and a 2.1% [dividend] yield," the analyst wrote.

Moorman maintained a 12-month price target of $51 on Qualcomm shares.

Dish Network Corp.: Bank of America Merrill Lynch analyst Jessica Reif Cohen maintained a neutral rating on shares of Dish Network Corp. (DISH) on Mar. 2.

Dish Network, the second- largest U.S. satellite-television provider, posted a fourth-quarter profit that topped analysts estimates on Mar. 1 after luring customers with discounts and increased advertising. Net income fell to $179 million, or 40 cents a share. Analysts in a Bloomberg survey projected 32 cents on average.

In a Mar. 2 note, Cohen said she was raising her forecast for net subscriber additions to 507,000, from 352,000, after another quarter in which Dish Networks posted net additions above expectations. She raised her earnings before interest, taxes, depreciation and amortization (EBITDA) forecast for 2010 to $2.8 billion from a prior $2.6 billion estimate. The analyst lowered her free cash flow forecast to $718 million from $1 billion due to higher capital spending on satellite equipment and taxes.

Cohen raised her price objective on Dish Netork shares to $25 from $24. She said she finds better value in shares of Cablevision Systems Corp. (CVC), Time Warner Cable Inc. (TWC), and Comcast Corp. (CMCSA).

Kimberly-Clark Corp.: Goldman Sachs analyst Andrew Sawyer lowered a rating on shares of Kimberly-Clark Corp. (KMB) to sell from neutral on Mar. 2.

In a note, Sawyer said he lowered earnings estimates on Kimberly-Clark, the maker of Huggies diapers and Kleenex tissues, to $4.89 from $4.90 for 2010, to $5.10 from $5.20 for 2011, and to $5.45 from $5.55 for 2012 to reflect the potential for wood-pulp costs to climb to $940 per ton.

Sawyer noted that pulp prices have gone up in 9 of the past 10 months. "In our view ... the bias for pulp prices could be higher still, as the industry is at 93% utilization with 8% of global supply possibly at risk due to [the Feb. 27] Chile earthquake. He also said the competitive environment remains "challenging", with more aggressive moves from Procter & Gamble (PG) in tissues and diapers.

The analyst lowered his 12-month price target by $3 to $60.

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