business

Stock Picks: LDK Solar, Prudential, Verizon

Wall Street analysts offer buy, sell, or hold opinions on stocks in the news on Aug. 10

LDK Solar: Soleil Securities maintained a hold rating and 6 price target on shares of LDK Solar (LDK), the Chinese manufacturer of wafers used in solar power cells, on Aug. 10.

In a note, equity analyst Paul Leming said LDK was scheduled to release second-quarter earnings after the close of trading on Aug. 10. Leming said he expects results to exceed the analysts' consensus estimate of earnings per share (EPS) of 22¢ on revenues of $458 million.

"We expect guidance for [the second half] to be well ahead of [the] current consensus, which shows decline in both revenue and EPS from Q2 to Q3, as well as Q3 to Q4," Leming wrote. He said he expected the company's guidance to be for flat to modestly higher revenues and stable gross margin in the second half of the year.

Leming said that key issues in the company's conference call, scheduled for 5 p.m. EST on Aug. 10, would include its progress on working down its net debt of $1.6 billion and on ramping up to full output its first two 5,000-metric-tonne production lines for polysilicon.

Prudential Financial: Keefe, Bruyette & Woods equity analyst Jeffrey Schuman reiterated an outperform rating and 70 price target on shares of Prudential Financial (PRU) on Aug. 10.

On Aug. 4, Prudential, the second-biggest U.S. life insurer, reported its fourth-straight profit increase as investment results improved. Second-quarter net income surged sevenfold to $1.08 billion, from $163 million in the same period a year earlier, the Newark (N.J.)-based company said in a statement. Excluding the results of policies sold before the company went public, as well as some investments, profit was $1.51 a share, beating the $1.31 average estimate of 17 analysts surveyed by Bloomberg.

In a brief note, Schuman said he was raising EPS estimates on Prudential to reflect quarter-to-date equity market performance and improving asset management trends, partially offset by the loss of some profitable group insurance accounts. He increased his EPS estimates for 2010 to $5.83, from $5.60, and for 2011 to $6.65, from $6.50.

"We reiterate PRU at Outperform based on generally solid operating trends and our expectation that material deal accretion or capital management will eventually materialize," the analyst wrote.

Verizon Communications: Standard & Poor's equity analyst Todd Rosenbluth maintained a hold rating on shares of Verizon Communications (VZ) on Aug. 10.

On Aug. 9, Verizon and Google (GOOG) urged U.S. regulators to leave wireless Internet services outside most policies that are designed to prevent carriers from making some Web sites perform better than others.

The companies issued a "compromise proposal" for so-called net neutrality rules. The plan would restrict Internet-service providers from selectively slowing content that travels over their wires, but wouldn't apply such limits to Web use on mobile devices, according to a blog post by the companies. They would also exempt new offerings beyond traditional Internet and TV services, such as health-care monitoring.

Google and Verizon argue that the mobile-Internet market is more competitive and changing rapidly, and therefore different from the wireline market. Critics say the proposal would let Verizon and other carriers discriminate against certain traffic, possibly favoring their own services.

Verizon and Google had been adversaries over the issue. New York-based Verizon was among the cable and phone carriers saying they need leeway on the delivery of Web content to protect performance of their networks. Google had led content providers and advocacy groups that say restrictions are required so communications companies don't favor their own online offerings or those of partners that pay for higher speeds.

In a posting on the S&P MarketScope service, Rosenbluth noted that the companies also proposed "a carve-out for additional differentiated online services, including entertainment and gaming options, that is likely to face net neutrality objections".

"From VZ's perspective, we believe this effort is intended to help shape pending FCC policy on broadband, without adding regulations to its faster-growing wireless operations," Rosenbluth wrote.

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