Stock Picks: Apple, AutoZone, Verizon

Wall Street analysts offer buy, sell, or hold opinions on stocks in the news on Sept. 20

Apple Inc.: Kaufman Brothers equity analyst Shaw Wu reiterated a buy rating on shares of Apple Inc. (AAPL) on Sept. 20. He raised a price target on the shares to $374 from $350.

In a note, Wu said that his contacts with industry sources indicate that sales of the company's iPad tablet device "are likely to surprise on the upside" due to better availability of screens and continued strong demand. Wu said that the success of the iPad "appears to be having a slight cannibalistic impact" on sales of the company's low-end MacBook laptop computers.

Wu saw "strong momentum" for the company's iPhone device but his sources indicated that tight supply of small screens could limit sales growth. He said that sales momentum for the company's iPod "appears strong," helped by new models.

The analyst raised estimates for the fourth quarter to $19.3 billion in revenue from $18 billion, and to $4.12 in earnings per share (EPS) from $3.74; for fiscal 2010 (ending October) to $64.1 billion in revenue from $62.9 billion, and to $14.64 in EPS from $14.25; and for fiscal 2011 to $80 billion in revenue from $76.3 billion, and to $18.00 in EPS from $16.75.

AutoZone Inc.: Morgan Joseph equity analyst Jeffrey Blaeser maintained a hold rating on shares of AutoZone Inc. (AZO), the biggest U.S. auto-parts retailer, on Sept. 20.

In a note, Blaeser said AutoZone is scheduled to report fourth-quarter fiscal 2010 results before the market opens on Sept. 21. He said he expects EPS of $5.34, vs. $4.43 a year earlier, on year-over-year sales growth of 6 percent, to $2.37 billion; he projects 4 percent comparable-store sales gain and a net 130 new stores in operation.

Blaeser said he expects AutoZone to remain active in repurchasing its common shares.

The analyst said he expects "another strong quarter" from AutoZone, with EPS likely to expand more than 20 percent from a year earlier. He maintained his hold rating based on the stock's valuation.

Verizon Communications Inc.: Standard & Poor's equity analyst Todd Rosenbluth maintained a hold rating and $32 price target on shares of Verizon Communications Inc. (VZ) on Sept. 20.

On Sept. 20, Verizon Communications, the second-largest U.S. phone company, named wireless-unit head Lowell McAdam president and chief operating officer, putting him in line to succeed Chief Executive Officer Ivan Seidenberg.

The appointment, effective Oct. 1, "is an important step in the succession process for when Seidenberg retires from the company," New York-based Verizon said in a statement. The company also named Francis Shammo as chief financial officer.

McAdam has run Verizon Wireless, the most profitable part of Verizon, for more than three years, competing against rivals such as AT&T Inc. and its iPhone, helping the parent company grow even as it loses home-phone customers. McAdam, 56, will report to Seidenberg, who turns 64 in December.

"We believe these moves support VZ's succession planning, highlight[ing] the deep managerial bench at VZ, and are unlikely to result in major shifts in financial priorities," Rosenbluth wrote in a posting on the S&P MarketScope service.

"However, with our expectation of slow earnings growth due partially to a recent spin-off, we see the shares as fairly valued … despite a 6 percent yield," Rosenbluth said.

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