Stock Picks: M&T Bank, Nike, Seagate Technology

Wall Street analysts offer buy, sell, or hold opinions on stocks in the news on Sept. 21

M&T Bank: Standard & Poor's equity analyst Erik Oja maintained a buy rating on shares of M&T Bank (MTB) on Sept. 21. He raised a price target on the shares to $100, from $95.

M&T may give up a majority stake to Banco Santander through a merger with the Spanish lender's U.S. unit while retaining some elements of control, according to people with knowledge of the matter cited in a Sept. 21 Bloomberg News report.

The banks are in informal talks with the U.S. Federal Reserve to gauge how such a deal would be received, and they expect to hear back within two weeks, said the people, who spoke on condition of anonymity because the talks are private. Many of the terms, including the timing as to when Santander would get the majority stake, have yet to be worked out, the people said.

An agreement would allow Santander to put its Sovereign Bank unit, which had pretax losses for the past three years, under the management of M&T Chief Executive Officer Robert Wilmers, 76, and his team, the people said. Buffalo-based M&T, which counts Warren Buffett's Berkshire Hathaway (BRK/A) among its biggest shareholders, steered through the financial crisis without posting a loss.

M&T has a market value of more than $10 billion. Together, M&T and Sovereign—which are about the same size—would become the ninth-largest U.S. savings institution by deposits.

"Given our view of the growth limitations of the regional banking industry due to weak loan growth, we see this deal, if it happens, as a positive, due to the potential for cost-cutting," said Oja in a posting on the S&P MarketScope service.

The analyst said the raised price target was a multiple of 15.5 times his unchanged 2011 earnings per share (EPS) estimate of $6.47, equivalent to the company's peers.

Nike: UBS Securities equity analyst Michael Binetti maintained a neutral rating on shares of Nike (NKE) on Sept. 21. He raised a price target on the shares to $82, from $77.

In a note, Binetti said he believes "global trends have been solid" for the footwear maker, and that the fall and holiday outlook is "slightly better than we expected." He said his industry sources suggest to him that inventories remain lean amid strong demand, which "should be positive" for Nike's gross margins in the first quarter of fiscal 2011 (ending May).

The analyst raised his first-quarter EPS estimate to $1.07, from $1.02.

"While NKE's stock has outpaced peers recently and valuation is above the [five-year average,] we would view any pullback as an opportunity to get more constructive on the stock based on our improving fall/holiday outlook," he said.

Seagate Technology: Capstone Investments equity analyst Shebly Seyrafi maintained a hold rating on shares of hard-disk drive maker Seagate Technology (STX) on Sept. 21. He lowered a price target on the shares to $12.00, from $12.50.

In a note, Seyrafi said the lower price target reflected a weak market for hard-disk drives in terms of pricing and unit sales. He noted that since Apple (AAPL) started selling its iPad tablet computer on April 3, "there was a more noticeable slowdown in consumer PC sales".

Seyrafi lowered EPS estimates for fiscal 2011 (ending June) to $1.79, from $1.86, and for fiscal 2012 to $1.84, from $1.94.

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