Stock Picks: Microsoft, Regal Entertainment, SanDisk

Wall Street analysts offer buy, sell, or hold opinions on stocks in the news on July 12

Corporate Office Properties Trust: Keefe, Bruyette & Woods initiated coverage on shares of Corporate Office Properties Trust (OFC), a real estate investment trust focused on suburban office properties, with an outperform rating and $44 price target on July 12.

The company's "focused strategy over the past decade on its customer base and their real estate needs that often include buildings with specialized security designs adjacent to major military bases, gives it strategic advantages, in our view," said equity analyst Sheila McGrath in a brief note.

"We view OFC's niche-focused strategy and captive growth profile via its development pipeline favorably," she said.

Microsoft Corp.: Janney Montgomery Scott equity analyst Sasa Zorovic raised a rating on shares of Microsoft Corp. (MSFT) to buy from neutral on July 12, with a fair value estimate of $30.

"We view our upgrade as more of a shorter-term trading call for the next several quarters rather than a longer-term, bullish call on Microsoft," Zorovic said in a note. He said that recent releases of new versions of Windows and Office were performing "very well" and are likely to carry strong operating results over the next several quarters. He said he expects that the fiscal fourth-quarter results "will be very strong, as will the next few quarters as well."

Zorovic raised fourth-quarter estimates for revenue to $15.1 billion from $14.8 billion, and for earnings per share (EPS) to 45 cents from 42 cents. He hiked estimates for fiscal 2011 (ending June) to $66.8 billion in revenue from $66 billion, and EPS of $2.30 from $2.27.

"Longer-term concerns (particularly in mobile, online) keep us from taking a more aggressive stance, but getting to $30 per share does not require 'heroic assumptions,' in our view," Zorovic said.

Regal Entertainment Group Inc.: Morgan Joseph & Co. maintained a long-term buy rating on shares of theater chain operator Regal Entertainment Group Inc. (RGC) on July 12, with a $20 price target.

In a note, equity analyst Jeffrey Thomison said he was lowering his 2010 revenue and EPS expectations due to the movie industry's recent soft box-office performance. "Our view of Regal's competitive position is unchanged, yet some disappointing films during the summer season have led to reductions to our financial projections," he said.

He lowered 2010 estimates for revenue to $2.940 billion from $3.025 billion and for EPS to 70 cents from 82 cents. He also reduced 2011 estimates for revenue to $3.054 billion from $3.105 billion, and for EPS to 88 cents from 94 cents.

"We remind investors that the movie business tends to move unpredictably in the short term, but is more stable in the longer term," Thomison said. "Despite some recent disappointing films and a still difficult economic environment, we believe Regal's 2010 revenues will surpass last year by 1 percent to 2 percent."

SanDisk Corp.: UBS Securities equity analyst Uche Orji raised a rating on shares of SanDisk Corp. (SNDK) to buy from neutral on July 12. He raised a price target on the shares to $55 from $46.

Orji said in a note that the rating change for the flash-data storage company was based on better-than-expected trends in average selling prices that are expected to persist in the second half of 2010 on tight market supply, strong smartphone and consumer handheld design win momentum, and a modest expansion in production capacity over the next year.

"We view the risk of oversupply in 2011 as a modest risk as demand for tablet devices combined with greater smartphone penetration could keep this risk in check," Orji said.

The analyst increased his calendar 2010 estimates for sales by 5 percent to $4.92 billion, and for EPS by 5 percent to $3.89. For calendar 2011, he boosted his estimates for sales by 14 percent to $5.77 billion and for EPS by 22 percent to $4.15.

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