Results for the tech stocks in last week's preview were a mixed bag, some beats, some misses, some in line. By and large, expectations for tech companies reporting results this week remain high, though. Here's what analysts surveyed by Thomson Financial are anticipating in the way of earnings, as compared to the same period of the previous year.
Citigroup upgraded shares of Amgen Inc. (NASDAQ: AMGN) to Buy from Hold and raised the target price to $70 from $50 following AMGN's better-than-expected Q2 results and positive Dmab results.
Credit Suisse upgraded Electronic Data Systems (NYSE: EDS) to Neutral from Underperform and expects the Hewlett-Packard (NYSE: HPQ) transaction to close at the $25/share price.
Analyst downgrades:
JP Morgan downgraded OmniVision (NASDAQ: OVTI) to Neutral from Overweight citing slowing growth and increased competition, as well as the impact on margins.
KeyBanc said Visa's (NYSE: V) strengths are its recurring revenue model, significant pricing power, no consumer credit risk, operating leverage, expense flexibility, and considerable free cash flow, among other reasons. The firm initiated shares with a Buy rating and $94 target.
Regal Entertainment (NYSE: RGC) was assumed at Caris with an Average rating and $18 target. The firm sees tough comps ahead for the company and does not expect any meaningful price increases.
Caris also initiated Marvel Entertainment (NYSE: MVL), as they are positive on the company's new financing vehicle. Shares were initiated with a Buy rating and $45 target.
MOST NOTEWORTHY: Telefonica, Affymax and Hatteras Financial were today's noteworthy initiations:
Deutsche Bank initiated Telefonica (NYSE: TEF) with a Buy rating and believes concerns of an economic slowdown in Spain are overdone and that company is on track to make 2008 guidance.
Baird assumed coverage of Affymax (NADAQ: AFFY) with an Outperform rating and $25 target. The firm believes the market has discounted the regulatory and commercial prospects of lead compound Hematide, which they believe is a $800M revenue opportunity, and recommends buying shares aggressively in the mid-$20s.
Shares of Hatteras Financial (NYSE: HTS) were started with an Outperform rating and $35 target at Friedman Billings. The firm believes management has the opportunity to stabilize its agency portfolio and generate a return on invested capital of about 20%.
OTHER INITIATIONS:
Caris assumed OmniVision (NASDAQ: OVTI) with a Buy rating and $15 target.
Pioneer Natural (NYSE: PXD) was initiated at UBS with a Buy rating and $110 target.
UBS also initiated CME Group (NYSE: CME) with a Neutral rating and $430 target.
Allied Capital (NYSE: ALD) was assumed with a Buy rating and $14.40 target at Merrill Lynch.
MOST NOTEWORTHY: Lloyds TSB Group, OmniVision and National Instruments were today's noteworthy downgrades:
Credit Suisse downgraded shares of Lloyds TSB Group (NYSE: LYG) to Underperform from Neutral as they see greater mortgage risk and capital issues.
Oppenheimer cut OmniVision (NASDAQ: OVTI) to Perform from Outperform to reflect challenging conditions in the low-end Chinese handset market.
Thomas Weisel downgraded shares of National Instruments (NASDAQ: NATI) to Market Weight from Overweight as they expect EPS growth as operating margins approach cyclical peaks.
OTHER DOWNGRADES:
Air France-KLM (OTC: AFLYY) was cut to Hold from Buy at Citigroup and to Neutral from Buy at Merrill.
Exelon (NYSE: EXC) and Edenor (NYSE: EDN) were both downgraded at Citigroup to Hold from Buy.
While the earnings season is beginning to wind down for the current quarter, there are still plenty of results to come. Here's a peek at what analysts surveyed by Thomson Financial are expecting from companies scheduled to report results in the final week of May 2008.
These companies are expected to post earnings growth, compared to the same period in the previous year:
Dell Inc. (NASDAQ: DELL) down 2.9% to 33 cents per share, on $15.66 billion in revenue
TiVo Inc. (NASDAQ: TIVO) is expected to swing to a loss of a penny per share, compared to a penny profit a year ago, and report $55.62 million in revenue. And analysts expect Borders Group Inc. (NYSE: BGP) to narrow its loss 7.8% to 47 cents per share, on $801.11 million in revenue.
MOST NOTEWORTHY: Teradyne, Omnivision and DemandTec were today's noteworthy upgrades:
Oppenheimer upgraded shares of Teradyne Inc (NYSE: TER) to Outperform from Perform after channel checks indicated several positive catalysts, including continued market share gains and that the company is benefiting from the inventory build of game consoles.
Jefferies upgraded Omnivision Technologies (NASDAQ: OVTI) to Buy from Hold and named the stock their Tuesday Value Pick, as they find the risk/reward favorable at current levels. Jefferies thinks fundamentals will likely bottom in the April quarter.
JMP Securities raised DemandTec Inc (NASDAQ: DMAN) to Strong Buy from Outperform, as they believe the company had a very strong close to the year and is seeing real traction with its Promotions product.
MOST NOTEWORTHY: Arcelor Mittal, OmniVision and ABB were today's noteworthy upgrades:
Citigroup upgraded shares of Arcelor Mittal (NYSE:MT) to Buy from Hold, as they believe the company's supplies of iron ore are likely to give it a comparative advantage over competitors.
OmniVision (NASDAQ:OVTI) was upgraded to Outperform from Neutral at Baird. The firm said valuation already reflects a slowdown in the China mobile phone market and April quarter seasonality.
ABB (NYSE:ABB) was raised to Overweight from Neutral at HSBC after good earnings from Siemens (NYSE:SI).
OTHER UPGRADES:
Merrill upgraded Lukoil (LUKOY) to Buy from Neutral.
Herbalife (NYSE: HLF) closed at $38.27 Wednesday. HLF is scheduled to report EPS on February 26. HLF March option implied volatility of 55 is above February volatility of 43 and its 26-week average of 39 according to Track Data, suggesting price fluctuations in March.
OmniVision Tech (NASDAQ: OVTI), a designer of semiconductor image sensors, is scheduled to report Q3 EPS on February 28. OVTI March implied volatility of 62 is above its 26-week average of 52 according to Track Data, suggesting larger price risks.
Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
MOST NOTEWORTHY: Deere, Boeing and Air France were today's noteworthy upgrades:
Banc of America upgraded shares of Deere (NYSE: DE) to Buy from Neutral and raised their target to $186 from $130 as they expect upside in 2008 from favorable global agriculture fundamentals.
Wachovia raised its rating on Boeing (NYSE: BA) to Outperform from Market Perform citing favorable risk/reward as domestic economic concerns and 787 development risks are discounted in valuation.
Air France (NYSE: AKH) was upgraded to Buy from Hold at Citigroup, as they believe the company's joint venture with Delta Air Lines (NYSE: DAL) will boost margins.
OTHER UPGRADES:
Baird upgraded OmniVision (NASDAQ: OVTI) to Neutral from Underperform.
Deutsche Bank upgraded Philips Electronics (NYSE: PHG) to Buy from Hold.
Tidewater (NYSE: TDW) was upgraded to Buy from Hold at Jefferies.
Lehman raised Kimberly Clark (NYSE: KMB) to Equal Weight from Underweight.
Even the technically challenged among us know that digital cameras use no film. Instead, such devices record pictures on solid-state silicon chips called image sensors. One of the best known manufacturers of such chips is headquartered in Sunnyvale, California.
OmniVision Technologies (NASDAQ: OVTI) makes semiconductor image sensor devices called CameraChips. These capture and convert images for such consumer instruments as cameras, surveillance systems, games, videophones and medical imaging units. The firm's customer list includes Sony (NYSE: SNE) and Motorola (NYSE: MOT).
The company pleased investors last week, when it reported Q1 EPS of 23 cents and revenues of $173.1 million. Analysts had been looking for 8 cents and $160.2 million. Management attributed the solid results to a shift in market demand toward its higher-resolution sensors. The firm also guided Q2 EPS to 19-31 cents (13 cent consensus) and Q2 revenues to $210-230 million ($170.88 million consensus). Needham subsequently reiterated its "buy" recommendation on the issue and boosted its price target to $26.
As most of us have now come to realize, there is no film in digital cameras. In fact, such devices record pictures on solid-state silicon chips called image sensors. One of the best known manufacturers of such chips is headquartered in Sunnyvale, California.
OmniVision Technologies (NASDAQ: OVTI) makes semiconductor image sensors called CameraChips. These capture and convert images for such consumer instruments as cameras, surveillance systems, games, videophones and medical imaging units. The firm's customer list includes Sony (NYSE: SNE) and Motorola (NYSE: MOT).
The company pleased investors last week, when it reported Q4 EPS of six cents and revenues of $119.2 million. Analysts had been looking for a loss of a penny and $105.2 million. Management noted that customer demand strengthened as the quarter progressed and guided Q1 EPS to 13-21 cents (6 cent consensus) and Q1 revenues to $155-$165 million ($117.17M consensus). Merriman Curhan Ford and Am Tech/JSA Research subsequently upgraded the issue to "buy." OVTI shares popped into a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the issue with three "buys," twelve "holds" and a "sell." Analysts expect a 30% growth rate, through the next year. The OVTI P/E ratio (19.62), PEG ratio (1.31), Price to Sales ratio (1.68), Price to Book ratio (1.87) and Price to Cash Flow ratio (13.40) compare favorably with industry, sector and S&P 500 averages.
Institutional investors hold about 92% of the outstanding shares. Over the past 52 weeks, the stock has traded between $11.00 and $29.63. A stop-loss of $13.75 looks good here.
MOST NOTEWORTHY: Dell (DELL), Boyd Gaming (BYD) and OmniVision Tech (OVTI) were today's noteworthy upgrades:
Dell Inc. (NASDAQ: DELL) was upgraded to Buy from Hold at AG Edwards to reflect the strong April quarter results.
Boyd Gaming Corp. (NYSE: BYD) was upgraded to Outperform from Market Perform at Wachovia due to ongoing improvement in the locals business through revenue growth and cost reductions, expected benefits at Borgata from the summer season, and a new hotel tower at the property.
OmniVision Technologies Inc. (NASDAQ: OVTI) was upgraded to Buy from Hold at American Technology and to Buy from Neutral at Merriman to reflect the company's improved revenue and gross margin outlook.
OTHER UPGRADES:
Universal Compression Partners (NASDAQ: UCLP) was upgraded to Buy from Hold at AG Edwards, as the firm believes the potential for additional asset acquisitions creates likely upside to estimates.
UBS upgraded shares of Norsk Hydro (NYSE: NHY) to Buy from Neutral and shares of Lear (LEA) to Neutral from Reduce.
Cowen upgraded VistaCare Inc. (NASDAQ: VSTA) to Outperform from Neutral and added shares to the firm's Focus List. Cowen believes the company's decision to review strategic alternatives will unlock value.
Matrix USA upgraded shares of Whole Foods Market Inc. (NASDAQ: WFMI) to Sell from Strong Sell based on valuation.
CHLM upgraded shares of 3D Systems Corp. (NASDAQ: TDSC) to Accumulate from Neutral.
Cantor upgraded shares of NMS Communications Corp. (NASDAQ: NMSS) to Buy from Hold on potential restructuring benefits.
Results for the tech stocks in last week's preview were a mixed bag, some beats, some misses, some in line. By and large, expectations for tech companies reporting results this week remain high, though. Here's what analysts surveyed by Thomson Financial are anticipating in the way of earnings, as compared to the same period of the previous year. .gif){kind=logo}
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had been looking for a loss of a penny and $105.2 million. Management noted that customer demand strengthened as the quarter progressed and guided Q1 EPS to 13-21 cents (6 cent consensus) and Q1 revenues to $155-$165 million ($117.17M consensus). Merriman Curhan Ford and Am Tech/JSA Research subsequently upgraded the issue to "buy." OVTI shares popped into a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
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