• Bowater shares are down to $23 from a high of $59 in 2000 while Abitibi shares are down from $20 a decade ago to $2.80
• The combined company will be the third largest forest-products company in the US behind Weyerhaeuser (WY) and International The merged company will have 50% market share of the North American newsprint business
• The decline in newsprint demand might have bottomed as demand from emerging markets is beginning to offset the decline in mature markets. Newsprint demand grew 1% last year. However, North American demand decreased 7%
• By 2008, global newsprint demand could increase 2%, according to Citigroup

Bowater & Abitibi deal might point to industry bottom originally appeared on BloggingStocks on Mon, 02 Apr 2007 08:00:00 EST. Please see our terms for use of feeds.

Abitibi-Consolidated Inc. (NYSE:ABY) and Bowater Inc. (NYSE:BOW) are very much alike. Both companies are in the paper business. And, yes, both companies have been dealing with the problems of lagging newspapers and magazines growth.

Well, now these companies are going to merge. The new name? It will be AbitibiBowater.

True, it's a terrible name (I'm really not sure how to pronounce it). Then again, the brand really doesn't matter so much because the companies do not sell to consumers.

However, Wall Street loves the deal. Basically, AbitibiBowater should realize tremendous cost savings. The estimate is about $250 million per year.

Currently, Abitibi's stock price is up 27% and Bowater is up 30%.

However, there could be a hitch -- antitrust complications. But, in light of some of the tough foreign competitors and the difficulties in the print market, U.S. regulators may let the AbitibiBowater deal get done.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Abitibi and Bowater trying to print more money originally appeared on BloggingStocks on Mon, 29 Jan 2007 11:22:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Bank of America upgraded The Kroger Co (NYSE: KR) to Buy from Sell with a $29 target. Due to streamlined distribution and reduced SG&A expenses having closed the productivity gap with Wal-Mart Corp (NYSE: WMT), the firm believes Kroger is well positioned to accelerate growth and modestly increase operating margins.

• JP Morgan upgraded shares of Quest Diagnostics Inc (NYSE: DGX) to Overweight from Neutral as they not only believe the company's results will outperform expectations over the next few quarters, but that management will become more aggressive in the acquisitions market.

• Sterne Agee upgraded Coast Financial Holdings Inc (NASDAQ: CFHI) to Hold from Sell, with an $8.50 target.

• Goldman Sachs upgraded shares of Nova Chemical Corp (NYSE: NCX) to Neutral from Sell, with a $12 target, citing the potential sale of Nova's styrene business.

• Citing the possibility of a merger with Abitibi-Consolidated Inc (NYSE: ABY), Bowater Inc (NYSE: BOW) was upgraded to Neutral from Sell at Bank of America and to Buy from Hold at Soliel Securities.

Analyst upgrades 1-29-07: Kroger gets a Buy originally appeared on BloggingStocks on Mon, 29 Jan 2007 10:55:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Citing peak employee productivity and margin expansion difficulties, Citigroup downgraded Cisco Systems Inc (NASDAQ: CSCO) from its previous Buy rating and assumed the company with a Hold rating.

• Goldman Sachs downgraded Continental Airlines Inc (NYSE: CAL) to Sell from Neutral on valuation.

• JP Morgan assumed coverage of Caterpillar Inc (NYSE: CAT) with an Underweight rating, downgraded from its previous Neutral rating.

• Following CIBC's outlook for the Paper & Forest sector through 2008, the firm downgraded Bowater Inc (NYSE: BOW) to Sector Underperformer from Sector Performer. The broker believes pulp, paper and packaging prices are near cyclical highs.

• Goldman Sachs expects a slowdown in revenue growth and margins in 2007 for TRW Automotive Holdings Corp (NYSE: TRW) and added the company to its America's Conviction Sell List.

• USA Truck Inc (NASDAQ: USAK) was downgraded to Market Perform from Outperform at Morgan Keegan following the trucking company's disappointing Q4, guidance and lack of near-term catalysts.

Analyst downgrades 1-26-07: Continental Airlines left on the tarmac, downgraded to Sell originally appeared on BloggingStocks on Fri, 26 Jan 2007 11:10:00 EST. Please see our terms for use of feeds.