MOST NOTEWORTHY: Lehman Brothers, Nokia and Intuitive Surgical were today's noteworthy initiations:
Morgan Stanley initiated Lehman Brothers (NYSE:LEH) with an Overweight rating and $31 target. The firm believes Lehman's discount to book value prices in significant write-downs.
Bernstein believes Nokia (NYSE:NOK) will see a slowdown in demand for devices and could loss market share. Shares were initiated with an Underperform rating.
Merriman assumed Intuitive Surgical (NASDAQ:ISRG) with a Neutral rating and believes the tightened credit markets could impact capital equipment spending for small and mid-sized hospitals. They find shares appropriately valued at current levels.
Klausner Technology Inc, which has sued several companies for damages and future royalties, has settled the suits and reached an agreement Monday with Apple Inc (NASDAQ: AAPL), eBay Inc (NASDAQ: EBAY) and AT&T Inc (NYSE: T) to license its "visual voicemail" technology that sends visual alerts to computers or mobile telephones when a user has a voice message.
Meanwhile, Barron'sTech Trader Daily gave several analysts' assessments of the upcoming 3G iPhone: At RBC, they're expecting "massive" shipments of the phones in Q4; this was supported by an analyst at Deutsche Bank. The Goldman analyst didn't stop there but said he expects improvements in the iPod and Mac business segments as well.
And while Apple is increasing its global foot print, so is Yahoo! Inc. (NASDAQ: YHOO). The internet portal company said on Tuesday that its mobile search service will be offered by six more telecom companies in Asia, bringing the total to 60 partnerships with companies reaching 600 million subscribers. A Yahoo! exec said he expects the mobile advertising market to rise to $16.2 billion in 2011 up from $1.5 billion in 2006 where Yahoo! is well poised to get a large share.
But all is not rosy at Yahoo! to say the least, as is evident by the massive loss of talent. The recent is Yahoo's EVP Jeff Weiner. Yahoo's president Sue Decker has apparently emailed employees following his resignation. TechCrunch has the surprisingly cheerful and positive email.
For the first time Monday I heard John McCain comparing Barack Obama to Jimmy Carter. I had heard this before in other arenas, but not from McCain. I guess that despite these two presidential candidates pledging to the American people to bring change and resist politics as usual, they are both, as usual as one could get.
Obama is being shaped by the pressures of running for office and to believe otherwise is delusional. I suppose one has to have hope but the effects of the campaign are becoming clear. Obama has been painting McCain as an extension of Bush, which is nonsense, and now in a typical tit-for-tat response, McCain is filling the air with Carter references.
Both McCain and Obama are wrong in their assessments of their opponents and they are becoming commoners to resort to the bottom of the barrel campaign techniques used in every campaign for most of our nation's proud history. Obama gave up the high ground too easily and McCain has decided he can sling mud with the best of them.
Jefferies & Co reiterated its "buy" rating on BioMarin (NASDAQ:BMRN) ahead of its analyst meeting, according to the AP.
Oppenheimer downgraded Motorola (NYSE:MOT) to "underperform" from "perform" according toBriefing.com. The news service also reports that Lehman upgraded Northwest (NYSE:NWA) from "equal weight" to "overweight".
MOST NOTEWORTHY: Alaska Communications, Royal Bank of Scotland and Frontier Oil were today's noteworthy upgrades:
Banc of America upgraded shares of Alaska Communications (NASDAQ: ALSK) to Buy from Neutral as they believe the company will return to a dividend growth focus after completing its strategic initiatives.
Credit Suisse raised Royal Bank of Scotland (NYSE: RBS) to Neutral from Underperform as they believe the company has already taken "prudent" write-downs.
Bear upgraded Frontier Oil (NYSE: FTO) to Peer Perform from Underperform as they believe the company is better positioned to withstand this period of margin weakness.
OTHER UPGRADES:
Jefferies upgraded Adobe Systems (NASDAQ: ADBE) to Hold from Underperform.
RBC Capital lifted Medarex Inc. (NASDAQ: MEDX) to Sector Perform from Underperform.
According to The Wall Street Journal, Microsoft Corp. (NASDAQ: MSFT), attempting to avoid a huge hostile takeover bid, indicated it may be willing to raise its bid to as much as $33 per Yahoo Inc. (NASDAQ: YHOO) share. Microsoft's board had failed to reach a final decision on how to proceed with its bid for the Internet search group. Yahoo!, though, may want $35-37 per share. And I thought Ballmer said he would lower the bid ... Don't they know by now these negotiating tactics are well known? In any event, it's starting to look more and more like the deal is closer than ever and the parties are willing, despite each showing off some muscle first.
Starbucks (NASDAQ: SBUX) reported late Wednesday a 28% drop in second-quarter earnings to $108.7 million, matching market expectations. While the drop was expected, it doesn't mean the report showed any positive changes following Schultz coming back to the CEO role. Perhaps it's too early to see them manifested, but Starbucks, once such a darling, isn't showing improvement yet. Stock is up about half a percent in premarket trading.
Adobe Systems Inc., (NASDAQ: ADBE) estimated that fiscal second-quarter earnings and revenue would come in near the high end of its targets and affirmed its earnings outlook for the full year. That is about 45-47 cents, compared to analysts' estimates of 43 cents per share.
We have seen this play before, and there are two scenarios as to how it could end. Starbucks Corporation (NASDAQ: SBUX) is being challenged like never before, having saturated the market place in some locations it is now facing the challenges of selling expensive coffee in a slowing economy.
Would you rather pay $4 for a cup of coffee or a gallon of gas? You can find cheaper coffee but you have few options to find cheaper fuel. Amid the already difficult operating environment Starbucks is faced with competition from the largest restaurant chain in the world, McDonald's Corporation (NYSE: MCD). McDonald's is looking to steal its morning thunder with competitive offerings at a far lower pricing structure. The threat is very real no matter what spin Starbucks puts on it.
This brings to mind two similar situations both involving Microsoft Corporation (NASDAQ: MSFT) and past competitors. Early on there were two word processing programs that together probably had 90% market share. Those were Wordperfect and Wordstar. Both of them were fine programs offering strong features, and now they are nowhere. Microsoft displaced both of them with MS-Word integrated with their Office suite of products, and is now king.
Adobe Systems (NASDAQ: ADBE) offers business and mobile software and services. The firm's products include tools for professional publishing, Web design, video production, business process automation, and mobile device interfacing. Its well-known Acrobat Reader displays portable document format (PDF) files on the Internet. Its Web and print publishing products include the widely-used Photoshop, Illustrator, and PageMaker programs. Adobe's InDesign publishing package provides professional layout and design applications. Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) are competitors.
The company pleased investors last week, when it reported Q1 EPS of 48 cents and revenues of $890.4 million. The Street had been expecting 45 cents and $875.8 million. Management also guided Q2 EPS to 45-47 cents (44 cent consensus), Q2 revenues to $855-$885 million ($874.69M consensus) and FY08 EPS to $1.86-$1.92 ($1.82 consensus).
Shares of Adobe Systems Inc. (NASDAQ: ADBE) have been soaring after the company reported yesterday after the market closed that its first-quarter profit jumped 52%, helped by strong demand for its design tools. The software maker also issued a stronger-than-expected sales and earnings outlook, despite fears of an economic slowdown.
For the quarter, Adobe Systems reported that its profit climbed to $219.4 million, or 38 cents a share, boosted by strong sales from its software tools like Photoshop, Illustrator, Dreamweaver and Acrobat. Excluding special items, the company's earnings came in at 48 cents a share, topping analysts' estimations for quarterly earnings of 45 cents a share.
Adobe Systems also announced a respectable 37% growth in revenues, to $890.4 million, up from $649.4 million a year earlier. Revenue during the period was helped by a 57% increase in its Creative Suite 3 solutions sales which rose up to $543.5 million in the quarter. Analysts, on average, were expecting the company show $876 million in revenue, according to Thomson Financial.
Adobe (NASDAQ: ADBE)'s Flash player is used for most videos available on the internet. Almost all PCs use it for content play-back. Now, Adobe will use Apple (NASDAQ: AAPL)'s software development kit to develop the product for the iPhone.
According toThe Wall Street Journal, "In comments widely reported last month, Apple Chief Executive Steve Jobs said the company's iPhone hadn't adopted Adobe's mobile version of its Flash program because of technical and performance concerns."
Adobe obviously think Jobs is full of beans. It means to prove that by getting its Flash player on Apple hardware so that customers can watch video from tens of thousand of websites. The Flash player is on about 700 million PCs worldwide, which is why content companies use it.
What is curious is that Jobs would resist allowing iPhone customers the ability to watch a wide variety of content. It would seem that would make the iPhone an even more popular item.
Maybe Apple wanted some cash from Adobe for the privilege of being on the hot handset product, and the media player company said "no."
Douglas A. McIntyre is an editor at 247wallst.com.
Adobe Systems (NASDAQ: ADBE) shares are climbing 6.4% after forecasting second-quarter earnings above Wall Street estimates. Demand for design tools like Photoshop, Illustrator and Dreamweaver and for its Acrobat publishing tool pushed its profit up 52% in the first quarter. Adobe forecast just 13% revenue growth for the year, compared to 37% in the first-quarter, perhaps indicative of how the slowdown in the economy could be affecting the software maker going forward and hence its cautiousness.
The Register reports that Apple Inc. (NASDAQ: AAPL) took 14% of the US retail computer market last month, up from 9% a year ago. When looking at sales revenue, Apple's share is more like 25%, up from 14% in the same period last year, according to market watcher NPD. In case anyone has forgotten, these figures only prove that Apple is not just iPod and iPhone, but a growing computer business as well.
Also, the Financial Times reported that Apple is in talks with major music companies to radically change the music download business. As Doug McIntyre noted when posting on the report, instead of charging for songs, Apple may give away all of the music on the iTunes service and make up for it by charging more for iPods and iPhones. The negotiations will have to overcome a dispute over the price Apple would be willing to pay for access to the labels' libraries.
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MOST NOTEWORTHY: Lehman Brothers, Nokia and Intuitive Surgical were today's noteworthy initiations:
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For the first time Monday I heard John McCain comparing Barack Obama to Jimmy Carter. I had heard this before in other arenas, but not from McCain. I guess that despite these two presidential candidates pledging to the American people to bring change and resist politics as usual, they are both, as usual as one could get.
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We have seen this play before, and there are two scenarios as to how it could end. 
Shares of 
Siemens (SI): More than layoffs, a strong sign of recession
McDonald's continues its coffee crusade
Cramer on BloggingStocks: Paulson and Bernanke step up to the plate
