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Notable Wall Street analyst opinions on stocks in the news for the week of Mar. 8-Mar. 12:

Mar. 8

Hewlett-Packard Co.: Thomes Weisel Partners analyst Doug Reid reiterated his overweight rating on shares of Hewlett-Packard Co. (HPQ) on Mar. 8.

On Mar. 5, the world’s largest personal-computer maker revised its first-quarter results, cutting profit by 3 cents a share, after a U.K. lawsuit against its Electronic Data Systems unit increased its legal costs. The new net income figure is $2.25 billion, or 93 cents a share, down from the $2.32 billion, or 96 cents, reported on Feb. 17. Excluding some costs, the profit was $1.07 a share, compared with $1.10 in the earlier report.

Hewlett-Packard increased its legal reserve fund after a London court ordered EDS to make an interim payment of about $112 million to British Sky Broadcasting. The court ruled in BSkyB’s favor in a dispute over a services contract between the companies. Justice Vivian Ramsey said EDS was liable for “fraudulent misrepresentation giving rise to damages.”

“The revision is unrelated to H-P’s strong business performance in the first quarter,” the company said in an e-mailed statement on Mar. 5.

“We do not expect the increased contingency reserve to impact our future HPQ EPS estimates”, wrote Reid in a Mar. 8 note, because the company has adequate reserves in place, in our opinion”. Reid said he believes the current litigation will have no impact on his revenue and EPS growth outlook for the company.

The analyst maintained his second-quarter revenue and non-GAAP EPS estimates of $29.57 billion and $1.04, respectively. Reflecting the restated January quarter results, Reid reduced his full year fiscal 2010 EPS estimate from $4.40 to $4.37. He maintained his revenue and EPS estimates of $128.7 billion and $4.89 for fiscal 2011.

Reid said he estimates that Hewlett-Packard will end the April quarter with a total cash and investment balance of $23.2 billion, vs. his prior estimate of $23.6 billion. “We do not expect the payments to have a material impact on HPQ’s cash balance,” the analyst wrote.

The analyst has a $60 price target on the shares.

PNC Financial Services Group Inc.: FBR Capital Markets analyst Paul Miller raised his rating on shares of PNC Financial Services Group Inc. (PNC) to outperform from market perform on Mar. 8.

Miller said in a note that the Pittsburgh-based banking company announced on Feb. 2 the sale of $3 billion of common equity and the planned sale of its investment servicing business as part of a capital plan to repay the $7.6 billion TARP investment. Miller said the expected boost to tangible common equity shifted its risk profile “to low risk from medium risk”.

“We expect this upgrade to be somewhat controversial due to investor concern surrounding the lower quality of earnings driven by purchase accounting accretion”, Miller wrote, which he figured added $3.17 to his $3.63 fiscal 2009 operating EPS estimate. “While we acknowledge that this earnings stream is lower quality,” Miller said. The analyst said he believes that nearly $1.50 of this accretion can be recaptured as it stems from higher-cost CDs, which are transitioning into lower-cost core deposits at a rate greater than PNC’s initial expectations, and as the non-credit-impaired loan customers refinance or reprice into normal balance sheet loans.

“PNC also has some of the strongest credit metrics relative to peers, which we believe should limit downside risk from current levels,” the analyst wrote. He said that if PNC recaptures any of the accretion from the non-credit-impaired portfolio, “it should provide upside to our estimated $5.00 to $6.00 range of ‘normal’ EPS”.

Miller lifted his price target on the shares to $65 from $55.

Mar. 9

Apple Inc.: Broadpoint AmTech analyst Brian Marshall reiterated his buy rating on shares of Apple Inc. (AAPL) on Mar. 9.

In a note, Marshall said the next major catalyst for Apple shares will be the launch of the iPad on Apr. 3. “We believe the general consensus (i.e. select media outlets) view of this device and its potential is overly pessimistic,” Marshall wrote. “We note the vast majority of the naysayers have not yet had the opportunity to use the iPad on a firsthand basis.”

Marshall said the “true genius” of the device is its media and content — such as eBooks, newspapers, magazines, applications, games, movies and TV episodes — which he believe will be help provide recurring revenues for Apple.

The analyst raised his estimate for calendar 2010 iPad shipments to 4.0 million units from 2.2 million units. He also hiked his calendar 2010 revenue estimate to $57.913 billion from $55.738 billion, and his earnings per share (EPS) estimate to $12.75 from $12.00.

“In our view, Apple remains the best technology company on the planet,” Marshall wrote. He raised his price target on Apple shares to $280 from $264.

Intel Corp.: Robert W. Baird analyst Tristan Gerra upgraded a rating on shares of Intel Corp. (INTC) to outperform from neutral on Mar. 9.

In a note, Gerra said that checks with industry sources point to large PC manufacturers recently raising their procurement forecasts for the first half of 2010, in part due to a rebound in corporate PC spending for 2010. “Intel could outperform semiconductor peers this year, notably those with stretched lead times,” Gerra wrote. “Should a gradual recovery in true end-demand prolong the current upcycle, INTC shares should benefit as well.”

Gerra expects Intel’s revenues to rise 15% in 2010, following two consecutive years of revenue declines.

“Intel’s valuation is compelling, in our view,” Gerra wrote. The analyst raised a price target on the shares to $26 from $24.

Mar. 10

Chevron Corp.: Bank of America Merrill Lynch analyst Doug Leggate lowered his rating on shares of Chevron Corp. (CVX) to neutral from buy on Mar. 10.

In a note, Leggate said that in the near term, production for the second-largest U.S. energy company looks “flat”; the improving margin trend vs. the company’s peers is “largely done”, while “elevated” capital spending over the next few years would “challenge” relative returns.

“Oil leverage differentiates CVX,” the analyst wrote, “but only the conviction that prices move higher drives upside vs. peers and is reflected in [the stock's] relative performance within the [oil majors] group”.

Regarding Chevron’s refining and marketing business, Leggate said reducing refining exposure “is likely welcomed … [c]urrent downstream weakness is probably priced in [to the stock] while any reward for paring exposure at the low of the cycle may be limited”.

The analyst forecasts EPS of $8.84 for 2010, $9.13 for 2011, and $8.69 for 2012.

“Absolute value and an attractive dividend position CVX as a staple in energy portfolios for those with a long-term view,” Leggate said. “[N]ear term, we believe the value proposition has shifted to Exxon Mobil Corp. (XOM),” which he rates buy.

Leggate lowered his price target on Chevron shares to $90 from $95.

NYSE Euronext: Raymond James analyst Patrick O’Shaughnessy maintained his outperform rating on shares of NYSE Euronext (NYX) on Mar. 10.

In a note, O’Shaughnessy said he was raising earnings per share (EPS) estimates on the owner of the world’s largest stock exchange to reflect stronger-than-expected derivatives trading in Europe. His new 2010 and 2011 EPS estimates are $2.34 and $2.67, up from $2.24 and $2.57, respectively.

Based on quarter-to-date trends, the analyst said he was also raising his expectations on U.S. equities volumes, but lowering his forecast for European equities volumes.

As for the company’s Mar. 10 announcement that it completed the sale of a minority stake in its U.S. futures exchange, NYSE Liffe, to six banks and brokers including Citadel Investment Group LLC and Goldman Sachs Group Inc. (GS), the analyst said that “[w]hile we continue to be skeptical that NYSE Liffe U.S. will be able to compete effectively with CME Group [CME], we acknowledge the downside of the venture is relatively limited.”

“With a combination of top-line revenue growth opportunities and continued cost-cutting, NYSE Euronext has the opportunity for strong earnings growth in 2010 and 2011 and is currently our top exchange investment recommendation,” O’Shaughnessy said.

The analyst has a $33 price target on the shares.

Mar. 11

CA Inc.: Raymond James analyst Michael Turits maintained a strong buy rating on shares of CA Inc. (CA) on Mar. 11.

CA Inc., the second-largest maker of software for mainframe computers, agreed on Mar. 10 to buy closely held Nimsoft Inc. for about $350 million to expand in cloud computing. The all-cash deal will probably cut net income by 10 cents a share in the year ending March 2011, Chief Financial Officer Nancy Cooper said on a conference call. Nimsoft’s products help customers monitor so-called cloud systems, which access computers, applications and data through the Internet.

In a Mar. 11 note, Turits said the purchase continues a string of “aggressive” acquisitions this fiscal year aimed at extending CA’s ability to monitor virtualized and service provider data center environments. “We have been impressed by the quality, aggressiveness and strategic discipline CA has shown with these purchases, which we believe should be effective in accelerating sustainable top-line growth,” said Turits. “However, they do extract a price near term”. The analyst estimates that CA spent as much as $700 million on acquisitions in fiscal 2010 (ending March) vs. its target range of $300-$500 million.

He said Nimsoft had $54 million in calendar 2009 bookings, up 32% from the previous year, and $32 million in revenues, up 18%, and was cash flow positive every quarter last year.

Turits said the Nimsoft deal, which is expected to close this quarter, will be dilutive to CA’s fiscal 2011 earnings per share (EPS) by 3 cents, The deal is expected to be neutral to CA’s earnings in fiscal 2012, he said. His EPS estimates are $1.68 for fiscal 2010 and $1.84 for fiscal 2011.

Bed Bath & Beyond Inc.: FBR Capital Markets analyst Stephen Chick lowered his rating on shares of Bed Bath & Beyond Inc. (BBBY) to underperform from market perform on Mar. 11.

In a note, Chick said the largest U.S. home-furnishings retailer is expected to “cycle” market-share benefits from the liquidation of former competitor Linens ‘N Things, which had fully liquidated from the home furnishings market through December 2008. Chick said he thinks removal of Linens ‘N Things from the market likely helped the company’s same-store sales in 2009 by around 400 basis points. He said that estimated sales and EPS for the fiscal fourth quarter “should be good for BBBY … yet we expect that recent trends represent the best it gets”.

“Given that we have heard other companies have to increase expenses for things such as bonuses and labor, this leaves us concerned” about selling, general and administrative (SG&A) expenses heading into 2010 for Bed Bath & Beyond, the analyst wrote.

Chick said his upwardly revised fourth-quarter EPS estimate of 76 cents is ahead of the Wall Street consensus estimate of 72 cents; his 2010 EPS estimate of $2.50 is above the Street consensus estimate of $2.47.

The analyst lowered his price target for the shares to $38.00, from $38.50.

Mar. 12

Netflix Inc.: Morgan Stanley analyst Scott Devitt lowered a recommendation on shares of Netflix Inc. (NFLX) to equal-weight from overweight on Mar. 12.

In a note, Devitt said the rating change on the largest U.S. mail-order movie-rental service was based on the stock’s valuation. “We remain positive on Netflix’s core DVD-by-mail and digital offering, but the recent rally in [the] share price, expectation of future earnings beats, longer-term potential hike in postal rates, [and] competition from Redbox and emerging digital players lead us to look elsewhere for investment ideas,” the analyst wrote.

Devitt noted that Netflix’s shares were 59% since mid-August, vs. gains of 19% for the Nasdaq composite index and 15% for the S&P 500 index.

“We think Netflix shares are fairly valued and that short interest of [nearly] 19% could provide near-term support if the company continues to beat [or] meet expectations as we expect,” Devitt wrote. “We believe Netflix’s hybrid distribution model (physical DVD-by-mail and digital streaming) positions the company favorably to capture meaningful share of the video/TV rental market.”

The analyst has a price target of $68 on the shares.

Nike Inc.: Susquehanna Financial Group analyst Christopher Svezia reiterated a neutral rating on shares of Nike Inc. (NKE) on Mar. 12.

“We believe global sales trends continue to show sequential improvement and leaner inventories should lead to better margins” for the world’s largest athletic-shoe maker, the analyst wrote in a note. “[W]e expect a more moderately paced margin recovery as investments accelerate and believe the current valuation is balanced against this backdrop”.

Svezia noted that Nike reports third-quarter earnings after the close of trading Mar. 17. He said his third-quarter EPS estimate of 90 cents is 2 cents above the Wall Street consensus view. He raised his fourth-quarter EPS estimate to $1.00 from 95 cents in anticipation of continued gross margin gains from “clean” inventory and fewer markdowns. He hiked his EPS estimates for fiscal 2010 (ending May) to $3.71 from $3.64 and for fiscal 2011 to $4.08 from $3.92.

“We believe a moderate near-term growth outlook and the recent share price run leaves valuations balanced with little room for near-term upside as shares approach all-time highs,” Svezia wrote.

Notable Wall Street analyst opinions on stocks in the news for the week of Feb. 22-Feb. 26:

Feb. 22

Lowe’s Cos.: Oppenheimer analyst Brian Nagel maintained an outperform rating on shares of Lowe’s Cos. (LOW) on Feb. 22.

Lowe’s, the second-largest U.S. home-improvement retailer, posted fourth-quarter profit on Feb. 22 that exceeded analysts’ estimates. Net income rose 27% to $205 million, or 14 cents a share, from $162 million, or 11 cents, a year earlier. Analysts projected 12 cents, the average of estimates in a Bloomberg survey.

In a Feb. 22 note, Nagel said he looked “very favorably” upon the better-than-expected fourth-quarter results, noting that sales trends at the chain accelerated from prior periods and “presumably improved through the quarter”. Nagel said better than forecast gross margins suggest a sales mix shift to more profitable products, and that improving sales trends more than offset somewhat higher expenses.

“We look upon LOW’s new $5 billion share repurchase authorization as a significant vote of confidence from management and the board,” said Nagel.

The analyst has a 12-18 month price target of $32 on the shares.

Schlumberger Ltd.: Morgan Stanley analyst Ole Slorer maintained an overweight rating on shares of Schlumberger Ltd. (SLB) on Feb. 22.

On Feb. 21, Schlumberger, the world’s largest oilfield-services company, said it will buy Smith International Inc. for about $11 billion in an all-stock transaction, gaining sole ownership of the biggest drilling-fluids provider. Smith (SII) holders will get 0.6966 Schlumberger share for each share they hold, the companies said in a statement. Based on Schlumberger’s Feb. 19 closing price, the purchase is valued at $11 billion.

Slorer said in a Feb. 22 note that he believes Smith is a “natural fit” for Schlumberger. The analyst said the Smith acquisition will position Schlumberger as the dominant service company in deepwater and global shale gas developments –”two pillars of the next energy cycle, in our view”. The analyst does not expect a second suitor to make a rival bid for Smith.

Slorer said he would use short-term weakness in Schlumberger stock as an opportunity to accumulate the shares in what he expects to be a “highly accretive” transaction over the long run. He anticipates the transaction will close before the end of 2010, as announced by Schlumberger.

The analyst has a $130 price target on Schlumberger shares.

Feb. 23

Home Depot Inc.: Bank of America Merrill Lynch analyst Alan Rifkin reiterated a buy rating on shares of Home Depot Inc. (HD) on Feb. 23 after the largest U.S. home-improvement retailer reported a fourth-quarter profit that topped analysts’ estimates and raised its dividend for the first time since 2006.

On Feb. 23, Home Depot said net income totaled $342 million, or 20 cents a share, in the three months ended Jan. 31, compared with a loss of $54 million, or 3 cents, a year earlier. Excluding some items, earnings were 24 cents a share, above the 16 cent average of 25 estimates compiled by Bloomberg.

Rifkin said in a note that the company’s earnings per share excluding items were 9 cents ahead of his 15 cents estimate, and above the company’s earlier guidance of 13 cents. He noted that gross margin increased 32 basis points to 34.41%, while the company’s earnings before interest and taxes (EBIT) margin increased 52 basis points to 4.99%.

Rifkin said Home Depot posted same-store sales growth of 1.2%, vs. his -4% estimate. , marking the first positive comparison since the first quarter of 2006. He estimates that store traffic increased 2.9%, while the average sales ticket declined 1.7%, to $50.01.

The analyst said Home Depot management expects 2010 earnings per share (EPS) of $1.79, a 15.5% increase, with same-store sales growth of 2.5%. Reflecting better-than-expected fourth-quarter results and the company’s 2010 outlook, Rifkin raised his EPS estimates for 2010 to: $1.79 from $1.75; for 2011 to $2.12 from $2.00; and for 2012 to $2.35 from $2.25.

The analyst said Home Depot remains one of his top picks for 2010. He has a $35 price target on the stock.

Kraft Foods Inc.: Credit Suisse analyst Robert Moskow said on Feb. 23 that the firm was reinstating coverage on shares of Kraft Foods Inc. (KFT) with an outperform rating.

In a note, Moskow said he was forecasting EPS of $2.15 for 2010 and $2.45 for 2011, both above the respective Wall Street consensus estimates of $2.10 and $2.31. The analyst said he finds “the risk-reward attractive because of potential upward momentum in operating margins over the next 12 months fueled by acquisition synergies”. Kraft is in the process of acquiring British confectioner Cadbury.

“Kraft plus Cadbury is now a $50 billion company with much more scale and exposure to developing markets,” the analyst wrote.

Moskow has a price target of $35 on the shares.

Feb. 24

Apple Inc.: Kaufman Bros. analyst Shaw Wu reiterated a buy rating on shares of Apple Inc. (AAPL) on Feb. 24.

In a note, the analyst said that based on his industry and supply chain checks, “[w]e are picking up that supplies of MacBook Pro in the distribution channel are becoming fairly limited at two to three weeks vs. a more normal four to six weeks”. Wu said he believes this could be due to strong demand “and/or a pending product refresh” as inventory levels are worked down.

Wu also said he has noticed that Intel is shipping in volume its next-generation of mobile processors, codenamed Arrandale, based on its Nehalem architecture for servers. The new mobile architecture features “much better performance through hyper-threading and turbo mode, battery life, and weight characteristics, which we believe give AAPL engineers more room to further differentiate the MacBook Pro”, said Wu. “We believe new Mac models could ship in the March quarter, or at the latest the June quarter”.

The analyst said he believes a refresh of the MacBook Pro makes sense, as the last time it was updated was in June 2009 and its entry-level $1,199 model has some overlap with the $999 MacBook, which was refreshed in October 2009 ahead of the holiday selling period.

“We continue to believe that Apple is positioned to outperform in this tough macroeconomic environment with its defensible strategic and structural advantages and its vertical integration,” Wu wrote.

The analyst has a $253 price target on the shares.

Medco Health Solutions Inc.: BMO Capital Markets analyst Dave Shove reiterated his outperform rating on shares of Medco Health Solutions Inc. (MHS) on Feb. 24.

Medco, the largest U.S. pharmacy benefits manager by revenue, said on Feb. 23 that fourth-quarter earnings rose 24% as the company’s more-profitable business supplying mail-order generic drugs expanded. Net income climbed to $341.5 million, or 70 cents a share, from $274.4 million, or 54 cents a share. Earnings excluding one-time items were 76 cents a share, beating the average estimate of 75 cents from 26 analysts surveyed by Bloomberg. The company reaffirmed fiscal 2010 earnings per share (EPS) guidance of $3.28-$3.38.

Shove said in a note that Medco produced a “solid” fourth-quarter performance, contributing to record results in fiscal 2009. He noted that “80% of 2010 renewals have been completed, generic penetration continues to grow, and new sales are still rolling in”. He said the company continues to invest in new business platforms to fuel future growth.

“We like the story, we like the model, and we really like the earnings trajectory,” Shove wrote. His forecasts call for EPS estimates of $3.34 for 2010 and $4.10 for 2011, representing earnings growth of 15% and 23%, respectively.

The analyst also reiterated his $80 price target on the shares.

Feb. 25

Goodyear Tire & Rubber Co.: KeyBanc Capital Markets analyst Saul Ludwig maintained a buy rating on shares of Goodyear Tire & Rubber Co. (GT), the biggest U.S. tiremaker, on Feb. 25.

In a note, Ludwig said that the company’s fourth-quarter 2009 earnings per share (EPS) of 14 cents, reported on Feb. 18, topped his estimate of 4 cents. “In general, there were no major 4Q09 surprises, but rather than dissecting 4Q09 further, we believe what lies ahead is much more important,” the analyst wrote.

Ludwig noted that on Feb. 24, the company promoted Richard J. Kramer to chief executive officer to replace Robert J. Keegan, who will remain as executive chairman. “Kramer is smart, has strong interpersonal skills, is strong in finance and has exceptional support from his team members at GT,” Ludwig wrote. “We view this expected promotion of Mr. Kramer to CEO as a positive move for GT and its management team”.

Important factors in the company’s earnings for 2010 will be its ability to price its products to offset raw material cost increases in the second half of the year and its success in mitigating currency devaluation in Venezuela, Ludwig said. He said improving demand, low fill rates (i.e., shortages) and inventories at 10-year low levels “will pave the way for GT — and its competitors — to increase prices this spring”. The analyst also noted favorable potential for several new, higher margin products.

Ludwig lowered his 2010 EPS estimate from $1.00 to $0.85. His first-quarter 2010 estimate remains a loss of 7 cents; he set an initial estimate for 2011 of $1.50 EPS.

“We remain positive in our view toward GT,” Ludwig said. He maintained his $19 price target on the shares.

Limited Brands Inc.: Cowen & Co. analyst Laura Champine reiterated a neutral rating on shares of Limited Brands Inc. (LTD) on Feb. 25.

On Feb. 24, the owner of Victoria’s Secret and Bath & Body Works chains reported fourth-quarter profit excluding some items of $1.01 a share. The average analyst estimate in a Bloomberg survey was 99 cents a share.

In a note, Champine said that Limited’s fourth-quarter EPS was four cents ahead of her estimate, on previously announced same-store sales growth of 1% vs. a 10% decline one year earlier. She said Limited’s gross margin of 40.8% was 90 basis points higher than her estimate.

“We believe that tighter inventory management limited the need for the massive markdowns seen in Q4 [of 2008] and boosted merchandise margins,” Champine said. “[W]e would not expect to see any meaningful operating expense leverage in FY10″.

Champine said Limited’s management expects first-quarter operating EPS to be 5 cents to 10 cents on total company same-store sales growth of 2%; the company’s guidance for fiscal 2010 stands at $1.40 to $1.60. Limited also revised its February same-store sales outlook from flat to a high single-digit to low-double-digit increase, which may imply “very strong” Valentine’s Day sales this year, the analyst said.

Champine raised her first-quarter operating EPS estimate by 2 cents to 6 cents and expects operating EPS of $1.44 in fiscal 2010, 2 cents above the Wall Street consensus view. Her fiscal 2011 operating EPS estimate of $1.52 is 11 cents below the consensus view.

Feb. 26

American International Group Inc.: Standard & Poor’s equity analyst Catherine Seifert maintained a hold recommendation on shares of American International Group Inc. (AIG) on Feb. 26.

AIG, the insurer rescued by the U.S., posted a fourth-quarter loss on Feb. 26 on charges tied to paying down its bailout debt and boosting commercial insurance reserves. The net loss of $8.87 billion, or $65.51 a share, narrowed from $61.7 billion, or a reverse-split adjusted $458.99, a year earlier when AIG posted the biggest loss in U.S. corporate history. The operating loss, which excludes some investment results, was $53.23 a share, missing the $3.94 average loss estimate of three analysts surveyed by Bloomberg.

Seifert said in a posting on the S&P MarketScope service that AIG’s fourth quarter operating loss per share of $52.53, vs. a $287.69 loss one year earlier, and full-year $46.40 loss, vs. a $395.28 loss, reflected numerous unusual items excluded from her operating EPS estimates of $2.00 for the fourth quarter and $3.51 for all of 2009.

“Our takeaway from these results is that AIG’s core insurance units remain weak, and that a high degree of execution risk remains in AIG’s turnaround strategy, the analyst wrote.

Seifert cut her price target on the shares by $2 to $30, under the assumption that AIG trades at a discount to its stated book value. Seifert said she believes AIG’s tangible common equity, which was a deficit of $162.06 per share at Sept. 30, is still negative.

Palm Inc.: BMO Capital Markets analyst Tim Long maintained an underperform rating on shares of Palm Inc. (PALM) on Feb. 26.

Palm, the maker of the Pre phone, said after the close of trading Feb. 25 that sales this year will be “well below” its forecast because customers aren’t buying devices as quickly as expected. The company had initially projected sales of at least $1.6 billion for the year ending in May. Revenue in the fiscal third quarter will be $310 million at most, Palm said. Analysts projected $409.3 million, according to the average estimate in a Bloomberg survey.

In a Feb. 26 note, Long said that Palm’s update third-quarter revenue guidance was well below his estimate of $379 million and even further below the Wall Street consensus view of $425 million. Long also noted that Palm indicated that fiscal 2010 revenues would fall below its previously forecasted range of $1.6 billion to $1.8 billion.

Long said he believes the company expected Verizon Wireless to drive increased revenue in the second half of fiscal 2010. “[w]e believe sell-through has lagged because carrier promotion was limited, and Palm is shipping what is essentially a six-month old device [the Pre] with limited differentiation,” the analyst said. Long added that he thinks Palm now has “sizeable” channel inventory issues at Sprint and Verizon, “which will make for an even tougher fourth-quarter as their lineup ages”.

The analyst lowered his pro forma estimates for fiscal 2010 to a loss of $1.36 per share from a loss of $1.04; and for fiscal 2011 to a loss of $1.11 per share from a loss of 87 cents. He also lowered his price target on the shares to $5 from $9.

Notable Wall Street analyst opinions on stocks in the news for the week of Feb. 16-Feb. 19:

Feb. 16

Autodesk Inc.: Goldman Sachs analyst Derek Bingham raised his rating on shares of Autodesk Inc. (ADSK) to buy from neutral on Feb. 16.

In a note, Bingham said his upgrade of the biggest maker of engineering-design software was based on his view that “the majority of macro indicators we track are now showing stability or

Improvement”, and his latest contacts with Autodesk customers “suggest improved momentum in the new year”.

“We believe that a firmer top-line can help to catalyze significant, sustained operating margin recovery from fiscal 2011 levels near 16% to prior peak levels of mid-to-high 20% over the next 3 years,” the analyst wrote.

Ahead of the company’s fourth-quarter fiscal 2010 earnings release on Feb. 23, Bingham lifted his fiscal 2011 non-GAAP EPS estimate from $1.06 to $1.12; he kept his fiscal 2012 projection at $1.50. He raised his 12-month price target to $30 from $27.

Teva Pharmaceutical Industries Ltd.: Deutsche Bank analyst David Steinberg reiterated his buy rating on shares of Teva Pharmaceutical Industries Ltd. on Feb. 16.

Teva, the world’s largest maker of generic drugs, said on Feb. 16 that fourth-quarter profit rose 28% on revenue from its top-selling product, the Copaxone multiple sclerosis treatment. Net income excluding costs linked to the 2008 purchase of Barr Pharmaceuticals Inc. climbed to $847 million, or 94 cents a share, from $662 million, or 80 cents. Earnings fell short of the average estimate of 95 cents a share from 19 analysts surveyed by Bloomberg.

Teva management reaffirmed its previous 2010 EPS guidance of $4.40 to $4.60 on revenue of approximately $16 billion.

In a note, Steinberg said that given the company’s “solid” revenue performance, he believes the slightly lower than expected bottom-line result vs. his forecast was attributable to the impact of foreign currency translation and a less favorable product mix, that resulted in higher revenues as well as higher operating expenditures; and higher than estimated losses from associated companies.

Steinberg noted that revenues were driven by strong year-over-year performances in all of Teva’s key geographic regions, benefiting from continued strong growth of the company’s key branded franchises including Copaxone and Azilect, and its respiratory business.

The analyst said that his buy rating is based on the company’s “still rich” generic pipeline; competitive advantages and efficiencies achieved via its global supply chain; continued strength from its branded, proprietary products; the “outstanding” track record of management; and synergies and revenue opportunities still to be derived from the acquisition of Barr Labs.

Steinberg has a 12-month price target of $68 on the stock.

Feb. 17

Whole Foods Market Inc.: Standard & Poor’s equity analyst Joseph Agnese raised his recommendation on shares of Whole Foods Market Inc. (WFMI) to hold from sell on Feb. 17. The largest U.S. natural-goods grocer reported higher than expected fiscal first-quarter earnings and raised its full-year profit forecast after the close of trading Feb. 16.

Whole Foods said 2010 earnings may total $1.20 a share to $1.25 a share in fiscal 2010 (ending September), up from a previous forecast of $1.05 to $1.10. Analysts predicted $1.09, the average of 16 estimates in a Bloomberg survey.

In a posting on the S&P MarketScope service on Feb. 17, Agnese noted that Whole Foods reported December-quarter EPS of 32 cents, vs. 20 cents one year earlier, 7 cents above his estimate. Agnese said comparable-store sales increased 3.5%, above his 3.0% estimate, reflecting growth in store traffic, improvement in average transaction sizes and easier comparisons. The analyst also said the company’s EBITDA margins widened “significantly more than we expected” as improvement in comparable-store sales led to increased operating leverage.

Noting that the “favorable” comparable-store trends have continued in the March quarter, Agnese raised his fiscal 2010 EPS estimate by 20 cents to $1.20 and his 12-month price target by $6 to $33.

Coinstar Inc.: Wedbush Morgan analyst Michael Pachter kept an outperform rating on shares of Coinstar Inc. (CSTR) on Feb. 17. On Feb. 16, the company’s Redbox unit, which rents movies for $1 a day from vending machines, reached an agreement with Warner Bros. that gives the studio 28 days to sell DVDs before they become available in the company’s kiosks. The two-year accord ends a lawsuit Redbox filed against the Time Warner Inc. (TWX) film studio in August to gain access to the latest movies.

As a result of the agreement, Coinstar said it expects first-quarter revenue of $315 million to $335 million and fully diluted earnings of 8 cents to 14 cents a share. The company also reaffirmed previous guidance for 2010, predicting revenue of $1.47 billion to $1.57 billion and earnings of $1.50 to $1.65 a share on a fully diluted basis.

In a Feb. 17 note, Pachter said the settlement is a positive step in Coinstar’s “tense” relationships with film studios (lawsuits against Fox and Universal remain outstanding).

Pachter cut his $1.52 billion 2010 revenue estimate to $1.48 billion, reflecting some loss of business due to the 28-day window. He said he still sees $1.75 EPS in 2010, and maintained a $35 target price on Coinstar shares.

Feb. 18

Wal-Mart Stores Inc .: Goldman Sachs analyst Adrianne Shapira reiterated a buy rating on shares of Wal-Mart Stores Inc. (WMT) on Feb. 18.

The world’s largest retailer reported fourth-quarter sales that trailed its projection on Feb. 18 after cutting grocery and electronics prices. Sales at U.S. stores open at least a year fell 1.6%; Wal-Mart had projected sales to decline no more than 1%. Net income in the fourth quarter ended Jan. 31 increased 22 % to $4.63 billion, or $1.21 a share, from $3.79 billion, or 96 cents, a year earlier. Excluding a tax benefit and a restructuring charge, profit totaled $1.17 a share, topping the $1.12 expected by analysts. Revenue advanced 4.5% to $113.7 billion, trailing analysts’ estimates.

The retailer forecast first-quarter comparable-store sales in the U.S. to be unchanged, plus or minus 1%. First-quarter profit will be 81 cents to 85 cents a share, Wal-Mart said. Analysts on average anticipate 85 cents.

In a note to clients, Shapira said that Wal-Mart’s fourth-quarter operating earnings per share (EPS) of $1.17 surpassed her forecast of $1.12 and the company’s guidance of $1.08-$1.12. Shapira said better than anticipated gross margin improvement, expense control, and foreign currency gains “drove the quarter’s upside”. She noted that same-store sales declined 1.6%, as she had expected, due to price deflation within the food and consumer electronic categories.

“While current sales trends are being hampered by food and consumer electronics deflation, firs-quarter [sales] should be the last tough comparison as pressure should moderate and deliver better second-half [sales] against easy year-ago comparisons,” Shapira said.

Shapira’s price target remained unchanged at $58. The stock is included in Goldman’s Americas Buy List.

Hewlett-Packard Co.: Raymond James analyst Brian Alexander maintained a strong buy rating on shares of Hewlett-Packard Co. (HPQ) on Feb. 18.

After the close of trading Feb. 17, HP, the largest personal-computer maker, posted fiscal first-quarter profit and sales that beat analyst estimates. Excluding some costs, first-quarter profit was $1.10 a share. Analysts projected a profit of $1.06, according to a Bloomberg survey. The company also raised its full-year forecast and said it would hire more salespeople this year.

In a note to clients, Alexander said HP reported “very strong” first-quarter results, with revenue growing 8% year-over-year to $31.2 billion. He said HP is “leveraging its portfolio breadth and scale to gain share in an improving IT demand environment”.

“HP is extremely well positioned to penetrate faster growing, higher margin segments of the IT ecosystem and will be a primary beneficiary of the catch-up period for enterprise IT investment in 2010,” Alexander wrote.

The analyst maintained a price target of $62.

Feb. 19

Dell Inc.: R.W. Baird analyst Jayson Noland maintained a neutral rating on shares of Dell Inc. (DELL) on Feb. 19. After the close of trading Feb. 18, the world’s third-largest personal-computer reported that holiday sales of low-priced PCs and higher component costs http://www.businessweek.com/news/2010-02-19/dell-declines-after-price-cuts-component-costs-crimp-earnings.html. Gross margin, the percentage of sales that remain after deducting production costs, was 17.4%, below the 18% projected on average by analysts.

Fourth-quarter net income slipped to $334 million, or 17 cents a share, from $351 million, or 18 cents, a year ago. Sales rose 16% to $14.9 billion, beating the average estimate of $13.8 billion. Profit before some costs was 28 cents a share.

Noland said in a Feb. 19 note that fourth-quarter earnings per share (EPS) and revenue figures exceeded the Wall Street consensus view. He said the revenue outperformance were due to better-than-expected results from the company’s hardware businesses. Noland noted that gross margins were down 90 basis points from the preceding quarter, which management attributed to increased contribution the Consumer segment and component constraints.

The analyst cut his $1.32 fiscal 2011 (ending January) EPS estimate to $1.26. He said he “remains on the sidelines” given concerns around the timing of a broad-based PC replacement cycle, the integration of the acquired Perot Systems unit, and further acquisitions. He has a $17 price target on the shares.

CBS Corp.: Goldman Sachs analyst Drew Borst reiterated a neutral opinion on shares of CBS Corp. (CBS) on Feb. 19.

After the close of trading Feb. 18, CBS, owner of the most-watched U.S. broadcast network, said fourth-quarter profit fell 57% after advertising sales dropped at its radio stations and billboard unit. Net income declined to $58.8 million, or 9 cents a share, from $136.1 million, or 20 cents, a year earlier. Excluding a writedown to the value of radio assets and other items, profit of 25 cents met the average of analysts’ estimates compiled by Bloomberg.

Borst said in a Feb. 19 note that the adjusted earnings per share (EPS) figure of 25 cents was in line with his estimate and the consensus view of Wall Street analysts. Revenue was 2% ahead of his estimate, but EBITDA (earnings before interest, taxes, depreciation and amortization) missed his estimate by 4% due to higher than expected operating expenses at the company’s entertainment division. Borst said CBS highlighted three themes for 2010, which he believes are largely factored into 2010 consensus estimates: better advertising trends, cost cutting, and rising retransmission fees from cable operators.

Borst noted that in a departure from the past, the company did not provide 2010 EBITDA guidance. He raised EPS estimates for 2010 to 93 cents from 90 cents; for 2011 to $1.13 from 98 cents; and for 2012 to $1.26 from $1.09. He also increased his 12-month price target to $14 from $13.

Notable Wall Street analyst opinions on stocks in the news for the week of Feb. 1-Feb. 5:

Feb. 1

Comcast Corp. (CMCSA)

Kaufman Bros. reiterates hold

Kaufman Bros. analyst Todd Mitchell said on Feb. 1 that he looked for cable operator Comcast to report “muted” quarterly results on Feb. 3, against “surprisingly strong” comparisons one year earlier. Mitchell said in a note that he thinks Comcast will issue guidance for total revenue and EBITDA growth in 2010 of 3% to 5%, “pretty much in line” with 2009 results.

“Moreover, whereas 2009 got progressively worse over the four quarters of the year,

2010 should be progressively stronger,” he wrote. The analyst expects Comcast’s capital expenses will fall again in 2010 for another year of “solid” gains in free cash flow.

With the company’s planned acquisition of a controlling stake in NBC Universal likely to take nine more months to close, Mitchell said he thinks investor capital “is best deployed elsewhere”.

“NBC’s tail is wagging Comcast’s dog, as Comcast’s valuation becomes increasingly dictated by sentiment on NBCU,” he wrote.

The analyst has a $17 price target on the shares.

Mattel Inc. (MAT)

Caris & Co. upgrades to buy from hold; raises estimates, price target

Caris & Co. analyst Linda Bolton Weiser upgrades her rating on shares of Mattel, the world’s biggest toymaker, on Feb. 1. In a note, Weiser said a 2% decline in the shares on Jan. 29, after the company released strong fourth-quarter results, was “overdone”. The decline provided investors an entry point into the stock “ahead of two years of double-digit EPS growth”, she wrote.

Weiser noted that Mattel had not had higher than 2% organic local currency sales growth since 2006, but she projected “at least” 4%-5% growth in 2010 and 2011, driven by a return to growth for the company’s Barbie franchise and revenue from products tied to several “sizable” movie licenses.

The analyst raised her 2010 earnings per share (EPS) estimate by 14 cents to $1.59, her 2011 EPS projection by 15 cents to $1.75, and her price target to $26 from $24.

Feb. 2

Exxon Mobil Corp. (XOM)

UBS Securities keeps neutral; lowers price target

Exxon Mobil Corp., the largest U.S. company, posted a smaller decline in fourth-quarter profit than analysts estimated on Feb. 1. Net income fell 23% to $6.05 billion, or $1.27 a share, from $7.82 billion, or $1.54, a year earlier.

UBS Securities analyst William Featherston maintained a neutral rating on the shares on Feb. 2. He said in a note that the company’s earnings per share (EPS) of $1.27 exceeded the Wall Street consensus estimate of $1.19 and the UBS projection of $1.12 on lower than expected corporate expense and a lower tax rate.

“After underperforming throughout 2009, XOM lagged peers by another 600 basis points after disclosing the XTO acquisition” in December, the analyst wrote. “In the wake of being oversold, today’s better than expected EPS … coupled with better organic upstream growth in 2010 should firm XOM’s relative share performance.”

Featherston said Exxon’s large valuation premium relative to its peers and the S&P 500 index warranted a neutral rating. He reduced his price target on the shares to $72 from $75.

Lexmark International Inc. (LXK)

Standard & Poor’s Equity Research maintains buy; raises estimates, price target

Lexmark International Inc., the second-largest U.S. printer maker, posted fourth-quarter revenue of $1.07 billion on Feb. 2, topping analysts’ projections. Net income in the fourth quarter more than tripled to $59.8 million, or 76 cents a share, from $18.1 million, or 23 cents, a year earlier. Excluding 40 cents of restructuring and other charges, earnings per share (EPS) were $1.16. The company said it expects first-quarter earnings will be at least 80 cents a share.

S&P equity analyst Thomas Smith maintained a buy rating on the shares on Feb. 2. Smith said fourth quarter EPS excluding charges was well above his 60 cents estimate. He noted that revenue fell 1% from a year ago, but rose 12% from the previous quarter as customer demand accelerated following a printer industry downturn.

Smith said he expects improving industry conditions through 2010, with margins widening based on new products, higher volumes, and cost reduction programs. He raised his operating EPS estimate to $3.20 from $2.40 for 2010, and raised his 12-month price target to $35 from $31.

Feb. 3

Time Warner Inc. (TWX)

Standard & Poor’s Equity research keeps buy

Time Warner Inc., owner of the Warner Bros. studio and the HBO cable channel, posted fourth-quarter profit that topped analysts’ estimates on Feb. 3. Net income of $627 million, or 53 cents a share, compared with a loss of $16 billion, or $13.41, a year earlier. Excluding items such as costs to cut magazine jobs, profit rose to 55 cents, beating the 52-cent average of analysts’ estimates compiled by Bloomberg.

S&P equity analyst Tuna Amobi kept a buy rating on Time Warner shares on Feb. 3. Amobi said that the company’s fourth-quarter earnings per share (EPS) from continuing operations of. 55 cents (before 4 cents in charges), vs. 19 cents one year earlier, was 2 cents shy of S&P’s estimate and 4 cents over the Wall Street consensus forecast. The company’s studio operations were “solid as expected”, said Amobi, mainly on home video sales of Harry Potter and the Half-Blood Prince and The Hangover. The company’s TV networks were “mixed”, hed added, but the publishing unit appeared to reap some gains from restructuring efforts

Amobi said that Time Warner issued guidance for growth at a mid-teens percentage rate in 2010 adjusted EBITDA, and raised its quarterly dividend by 13% to an annual rate of 85 cents; the company also raised its share buyback capacity to $3 billion from $1 billion. “Added to sizable financial capacity, we also infer management’s increased confidence in underlying business trends,” said Amobi.

Polo Ralph Lauren Corp. (RL)

UBS keeps buy

Shares of Polo Ralph Lauren Corp., the designer of Chaps and Club Monaco clothing, fell the most in a year on Feb. 3 after reporting a 0.6% drop in third-quarter revenue to $1.24 billion. The company said sales for the year ending April 3 would fall in the “low single-digit” range in percentage terms, compared with an earlier projection for a “mid-single-digit” decline.

Polo fell $7.10, or 8.3 percent, to $78.57 at 10:23 a.m. in New York Stock Exchange composite trading, after earlier dipping to $78.21 for the steepest drop since January 2009. The shares jumped 78% last year.

UBS analyst Michael Binetti kept a buy rating on Polo shares on Feb. 3, noting that its third-quarter EPS of $1.10 beat his $1.04 estimate and the Wall Street consensus forecast of $1.01; he said he thinks investors “were looking for $1.20 or more”. Binetti said he believes the mixed quality of third-quarter results could present a stock buying opportunity for what he still views as “one of the most compelling 1-2 year global growth stories in large-cap apparel”.

Binetti said his current model for Polo sees EPS of $4.37 in fiscal 2010 and $4.81 in fiscal 2011. He said he would revisit his model after the company’s 9:00 am ET conference call on Feb. 3. He has a $92 price target on the shares.

Feb. 4

Cisco Systems (CSCO)

Oppenheimer reiterates outperform

Cisco Systems Inc., the world’s biggest maker of networking equipment, reported quarterly earnings on Feb. 3 that topped analysts’ estimates and predicted an acceleration in sales growth as customers resumed projects they put off during the recession. Second-quarter net income rose 23% to $1.85 billion, or 32 cents a share, from $1.5 billion, or 26 cents, a year earlier. Sales climbed 8% to $9.82 billion in the period, which ended Jan. 23.

Cisco expects third-quarter sales to rise 23% to 26% from a year earlier. That equates to revenue of at least $10 billion, topping the average analyst estimate of $9.49 billion.

Oppenheimer analyst Ittai Kidron reiterated an outperform rating on Cisco shares on Feb. 4. The analyst said in a note that the company delivered stronger than expected second-quarter results, with year-over-year sales growth for the first time in four quarters.

Kidron noted that Cisco benefited from strong demand across nearly all regions and segments, with product orders up 11% year-over-year. The analyst said Cisco has refocused on driving growth, noting its plans to hire 2,000-3,000 employees to support its strategic initiatives.

“We’re encouraged by Cisco’s ability to swiftly right the ship and expect it to capitalize on its momentum,” wrote Kidron.

Visa Inc. (V)

Raymond James upgrades to strong buy from outperform; raises estimates, price target

Visa Inc., the world’s biggest payments network, posted a 33% gain in fiscal first-quarter profit after the close of trading Feb. 3 as consumers used credit and debit cards instead of cash and spending picked up. Net income for the three months ended Dec. 31 advanced to $763 million, or $1.02 a share, from $574 million, or 74 cents, a year earlier.

On Feb. 4, Raymond James analyst Wayne Johnson upgraded his rating on Visa shares to strong buy from outperform. He said in a note that Visa posted “surprisingly strong” transaction volume results, particularly in debit cards.

“Revenues are growing faster and sooner than expected and cost controls are better than modeled,” he wrote. Johnson noted that the company reiterated guidance for EPS growth of over 20% in 2010 and 20% in 2011.

The analyst raised his 2010 estimates for revenue by $210 million to $7,878 million (up 14% year-over-year) and EPS by 32 cents to $3.74 (up 20%). He hiked his 2011 estimates for revenue by $400 million to $8.8 billion (up 11%) and EPS by 58 cents to $4.51 (up 21%).

Johnson also raised his 12-month price target on the shares to $112 from $85.

Feb. 5

NYSE Euronext (NYX)

Piper Jaffray maintains underweight; lowers price target

Piper Jaffray analyst Robert Napoli maintained an overweight rating on shares of NYSE Euronext, owner of the largest U.S. stock exchange, on Feb.5 in advance of the company’s fourth-quarter earnings release on Feb. 9.

The analyst lowered his fourth-quarter earnings per share (EPS) estimate by 4 cents to 48 cents primarily on his expectation of higher expenses for the company, in line with the Wall Street consensus view. He maintained his estimates of $2.21 for 2010 and $2.52 for 2011.

“We believe NYX continues to make progress with its new initiatives and acquisitions, but meaningful success remains elusive and industry pressures, albeit moderating, remain intense,” wrote Napoli in a note. “Consequently, we have a hard time seeing positive revenue and earnings growth momentum in the near-term which we need to get to be more bullish on NYX”.

The analyst also said the regulatory environment, both domestically and internationally, continues to be “very unsteady” for securities exchanges.

Napoli reduced his price target on the shares to $22.

Aetna Inc. (AET)

Standard & Poor’s Equity Research maintains hold

Aetna Inc., the third-largest U.S. health insurer, posted fourth-quarter operating EPS of 40 cents, vs. 96 cents one year earlier, on Feb. 5. Revenues rose 9% from the prior year. The company forecast 2010 earnings excluding some items will drop to a range of $2.55 to $2.65 a share, missing the average estimate of $2.84 a share in a Bloomberg survey of analysts.

S&P equity analyst Phillip Seligman maintained a hold recommendation on Aetna shares on Feb. 5. He said that the company’s fourth-quarter operating EPS was in line with his expectation. Seligman noted that Aetna’s healthcare operating revenue rose 9% on 7% growth in medical policy membership, while the commercial medical loss ratio (MLR) rose less than he expected on lower flu costs and higher premium yields. For 2010, Seligman said Aetna sees fewer medical members starting Jan. 1, but “we are encouraged [the] decline is less than it expected.”

The analyst said he sees a lower commercial MLR on better underwriting, but expected pressure in general and administrative expenses from competitive pricing in the self-funded medical insurance business, higher compensation expense, and internal investment. He kept his 2010 EPS estimate of $2.60 and $33 price target.

Notable Wall Street analyst opinions on stocks in the news for the week of Dec. 14-Dec. 18:

Dec. 18

Research In Motion Ltd. (RIMM)

Canaccord Adams reiterates buy; raises estimates and price target

Research in Motion’s third quarter results, reported after the close of trading Dec. 17, topped Wall Street estimates. Canaccord Adams analyst Peter Misek said on Dec. 18 that the Blackberry maker’s shipments, subscribers, revenues, and earnings per share (EPS) all beat his forecasts, but more impressively the company set higher-than-expected fourth-quarter guidance.

Among RIM’s third-quarter highlights, in his view, were shipments of 10.1 million units, “above everyone on [the] Street”; subscribers of 4.4 million, also topping all Wall Street forecasts; and the announcement of a new relationship with China Telecom.

Misel noted that RIM’s third-quarter revenues of $3.92 billion topped his $3.85 billion estimate, and its $1.10 GAAP EPS beat his $1.07 estimate and Wall’Street’s consensus projection of $1.04. In line with the company’s view, re haised his $4.26 billion fourth-quarter revenue estimate to $4.32 billion and his $1.25 GAAP EPS forecast to $1.29. He hiked his $90 price target to $95.

Continental Airlines Inc. (CAL)

Stifel Nicolaus downgrades to hold from buy

Stifel Nicolaus analyst Hunter Keay downgraded shares of Continental Airlines on Dec. 18, citing the stock’s valuation after he revised earnings forecasts for the fourth-largest U.S. carrier.

“Shares of CAL are trading at 6.9 times 2010 EV/EBITDAR, implying fair value of $19 per share,” he wrote in a Dec. 18 note.

Keay noted that shares of Continental have increased 56% since bottoming on Nov. 2, while also significantly outperforming the broader market and the airline industry as a whole. “CAL is a high quality carrier with a strong balance sheet and exposure to the strengthening corporate travel market, but [the] shares appear to be fully valued, in our view,” he wrote.

Dec. 17

Citigroup Inc. (C)

Oppenheimer reiterates perform

Citigroup Inc. shares fell sharply in premarket trading Dec. 17, a day after the bank priced a stock offer at a steep discount and the government said it wouldn’t immediately sell a portion of its stake in the bank.

After the market closed Dec. 16, Citi said it would sell 5.4 billion shares of common stock at $3.15 per share to help repay $20 billion in government bailout money. The price represents a discount of nearly 9 percent from Wednesday’s closing price of $3.45. Citi received $45 billion as part of the Troubled Asset Relief Program. The government converted $25 billion of that investment into a nearly 34-percent stake in the bank.

Earlier this week, the government said it would sell $5 billion worth of common stock it held in Citi at the same time the bank sold stock to repay TARP money. However, the government opted not to participate in the offering. The Treasury Department paid $3.25 per share for its stake, which means it would have lost 10 cents a share, or about $158.7 million, in the offering.

Oppenheimer analyst Chris Kotowski said Citi’s agreement to sell shares to repay TARP before the government sold its stake in the bank was a mistake that will cost taxpayers. Kotowski wrote in a research note that the government had plenty of time in recent months to sell its Citi stock for more than $4 per share. Citi shares were trading above $4 as recently as last week.

Now the government will struggle to get such a price because of the dilution from the new stock Citi is selling to repay the $20 billion, Kotowski said.

The government still plans to unload its 7.7 billion shares sometime in the next 12 months. It will wait at least three months, though, to start selling any shares. Kotowski estimated the government now owns about 26 percent of the bank instead of nearly 34 percent.

Bank of America Corp. (BAC)

Standard & Poor’s Equity Research keeps strong buy

S&P equity analysts Stuart Plesser and Matthew Albrecht noted on Dec. 17 that BofA named Brian Moynihan to succeed Ken Lewis as president and CEO. Moynihan is currently president of Consumer and Small Business Banking at the banking giant, and has held a variety of senior leadership roles in the company, they noted. “We applaud the promotion of an internal candidate, which should allow for continuity of management and strategy,” they wrote in a Dec. 17 note. The analysts also think the resolution of this executive search “has eliminated an overhang on the shares”.

S&P kept its $22 price target on the shares, and the analysts expect loan provisioning to decline late in 2010, “providing an earnings catalyst” for the share price.

Dec. 16

Corning Inc. (GLW)

Calyon Securities upgrades to buy from outperform; raises estimates, price target

After meetings with various Corning managers, Calyon analyst Steven Fox upgraded shares of the company on Dec. 16 on the expectation that its business is likely to pick up momentum “sooner than the Street is currently modeling”, according to a Dec. 16 note to clients.

Fox cited recent retail trends in more mature markets, “benign” pricing on LCD panels, “surprising” LCD industry consolidation, and positive consumer trends out of China, which he thinks may drive a faster than normal start to 2010.

Fox raised his earnings forecast for 2010 to $1.65 per share from $1.59. He also raised his price target on the shares to $25 from $18.50.

Boston Beer Co. (SAM)

Deutsche Bank keeps hold; raises estimates, price target

Deutsche Bank analyst Andrew Kieley said in a Dec. 16 note that Boston Beer’s new fourth-quarter earnings guidance of 40 cents to 70 cents per share (up from 10 cents-40 cents) topped his Street-high estimate of 45 cents and analysts’ consensus view of 43 cents. Kieley said his new EPS estimate range is based on favorable near-term commodity costs, along with continued improvement in gross margins as the craft brewer “optimizes” its Lehigh, Mass., brewery.

The analyst said that the company’s new guidance suggests volume trends remain “reasonably good” in the fourth quarter, with the higher earnings forecast appearing to be attributable to better costs, vs. major revenue acceleration.

Kieley raised his $2.10 per share 2009 earnings estimate to $2.25, and his 2010 forecast from $2.26 to $2.42. He also hiked his price target from $45 to $47.

Dec. 15

Wells Fargo (WFC)

Keefe, Bruyette & Woods upgrades to market perform from underperform; raises price target

Deutsche Bank upgrades to buy from neutral

At least two analysts upgraded Wells Fargo & Co. on Dec. 15, a day after the national bank said it would repay $25 billion in bailout money.

Wells Fargo said Monday after the market closed it would repay the money it received last year at the height of the credit crisis. Wells Fargo’s announcement came just hours after Citigroup Inc. said it would pay back $20 billion received as part of the Troubled Asset Relief Program, and that the government would sell its stake of nearly 34 percent in the bank.

Wells Fargo was the last of the eight initial recipients of TARP money to agree to repay the government.

Keefe, Bruyette & Woods Inc. analyst Frederick Cannon raised his rating on Wells Fargo and increased his share price target to $28 from $24.

In a research note, Cannon said the capital raise and repayment of TARP ease the bank’s two biggest concerns: Its capital ratios and the valuation of its risky assets.

Wells Fargo is selling $10.4 billion in new stock to help pay off the government, which will improve its capital position, Cannon wrote. The Treasury Department’s approval of Wells Fargo’s plan also shows the government is not concerned with the valuation of the bank’s assets.

Deutsche Bank analyst Matt O’Connor also upgraded the stock. O’Connor said the capital raise removes questions that had been lingering about potential dilution to the stock. He also predicts Wells Fargo will have a strong fourth quarter, boosted by gains from hedging and the sales of securities.

Best Buy Co. (BBY)

Janney Montgomery Scott rates neutral

Janney Montgomery Scott analyst David Strasser said on Dec. 15 that the Best Buy’s third-quarter results beat his estimate and the consensus Wall Street forecast, driven by cuts in selling, general, and administrative (SG&A) expenses. Strasser noted that the electronics retailer guided down expectations for gross margin for the fourth quarter due to its anticipated sales mix, something he had anticipated. The analyst attributed this predominantly to the better results in the third quarter.

While recent strength in the stock price reflects the strong third quarter, Strasser believes the share price will remain somewhat range-bound in the low to mid $40s.

Dec. 14

Visa Inc. (V)

R.W. Baird upgrades to outperform from neutral; raises price target

Shares of Visa Inc. climbed in premarket trading Dec. 14 as analyst David Koning of R.W. Baird upgraded the payments processor, citing improved transaction levels, volume and international travel. Koning also increased his share price target to $100 from $88.

“We expect reaccelerating growth over the next couple quarters, along with annual earnings-per-share growth of more than 20 percent over the next couple years, and expect both to drive strong stock performance over the next year,” Koning wrote in a note to clients.

The analyst indicated that retail sales are getting better and international travel is not down as much as it was a year ago, which is helping Visa’s business.

Additionally, on Dec. 11, Standard & Poor’s said Visa will be added to the S&P 500 index after market close on Dec. 18. Visa, based in San Francisco, will replace telecommunications and network equipment company Ciena Corp. on the index.

Exxon Mobil Corp. (XOM)

Standard & Poor’s Equity Research reiterates strong buy

Exxon Mobil agreed to buy U.S. gas producer XTO Energy (XTO) in an all-stock deal valued at $41 billion (including $10 billion in debt) on Dec. 11. S&P equity analyst Tina Vital said in a Dec. 11 note that she likes the deal, which she views as fairly valued.

Vital believes XTO’s assets will compliment Exxon Mobil’s growth plans in unconventional gas, adding that “XOM’s technical expertise will unlock additional XTO’s resource potential”.

Vital kept her price target for Exxon Mobil at $88.

Notable Wall Street analyst opinions on stocks in the news for the week of Nov. 23-27:

Nov. 27

QLT Inc. (QLTI)

RBC Capital upgrades to outperform from sector perform; raises price target

RBC Capital analyst Douglas Miehm said on Nov. 27 that QLT reached a settlement with Massachusetts General Hospital (MGH) in its litigation over royalties for its Visudyne treatment for wet age related macular degeneration;; the company will pay MGH $20 million for full payment of all past and future royalty obligations. Miehm said the settlement was much better than he expected.

To account for the better-than-expected settlement, Miehm narrowed his 26 cents 2011 loss per share estimate to a 24 cents loss. He upgraded the shares as he believes they are being undervalued by the market. He raised his price target to $6.00 from $4.50.

Theravance Inc. (THRX)

Cowen & Co. maintains neutral

Cowen analyst Ian Sanderson said on Nov. 27 that the FDA review deadline for the company’s Vibativ compound for treatment of nosocomial pneumonia (NP) was Nov. 26; he and other Wall Street analysts see an approval delay — likely in form of a complete-response letter. Sanderson said the key regulatory hurdle may be numerically higher mortality rates for Vibativ vs. vancomycin in Phase III trials. He sees approval for Viative for treatment of NP in the second half of 2010.

The analyst noted that with slow rollout in complicated skin and skin structure infections indication projected for Vibativ, low visibility in terms of timing, and the outcome of the anti-infective advisory committee review of the NP indication, he keeps his neutral rating on the shares.

Nov. 25

Microsoft (MSFT)

Collins Stewart rates buy

Jefferies & Co. rates buy

Credit Suisse rates outperform

Analysts cautioned on Nov. 25 not to read too much into the coming departure of Microsoft Corp. finance chief Chris Liddell, which was announced the previous day.

Liddell joined Microsoft in 2005, and this year led an effort to cut $3 billion from the company’s costs amid the recession. The plan included Microsoft’s first mass layoffs. Liddell will step down as CFO on Dec. 1 and be replaced by Peter Klein, Microsoft said. Klein, 47, joined Microsoft in 2002 and currently is responsible for the books at the division that produces Microsoft Office and other business programs.

Collins Stewart analyst Sandeep Aggarwal in a note to investors said Liddell “has done a great job at Microsoft for the past four and half years and he now wants to take a ‘CEO type’ of role.”

Katherine Egbert, an analyst at Jefferies & Co., also said she thinks Liddell wants to move into a CEO role. “We don’t believe Mr. Liddell was forced out, nor do we think he is leaving under untoward circumstances,” she wrote in a note to investors. Egbert said Klein seems a “competent replacement” for Liddell.

Credit Suisse analyst Philip Winslow said he is “encouraged by Microsoft’s selection to replace Chris Liddell and believe that Peter Klein’s track record suggests he will continue the focus on cost efficiency championed by Liddell.”

TiVo Inc. (TIVO)

Standard & Poor’s Equity Research maintains buy

S&P equity analyst Tuna Amobi said on Nov. 25 that TiVo’s October-quarter operating loss per share of 6 cents, which compared with a year earlier loss of one cent, matched his estimate. He noted worse-than-projected subscriber losses, with other “lackluster” metrics, as TiVo guided expectations for January-quarter results to a $5 million-$7 million adjusted EBITDA loss and a $13 million-$15 million net loss.

Amobi sees further crucial traction on distribution and audience measurement, underscored by TiVo’s latest pacts with Virgin Media (VMED) and Google Google (GOOG), among key strategic partnerships with potential long term upside.

With an imminent ruling on the company’s litigation with Dish Network Corp. (DISH) viewed as pivotal to TiVo’s patent momentum, the analyst keep his $14 price target.

Nov. 24

Hewlett-Packard (HPQ)

Deutsche Bank keeps hold; raises estimates, price target

Hewlett-Packard Co. shares slipped Nov. 24 after the computer and printer company’s fourth-quarter results showed weakness in its core businesses and that growth in PC shipments were accomplished at lower prices. Deutsche Bank analyst Chris Whitmore said without the boost from technology services, revenue would have fallen by 13% from a year ago, excluding the effects of foreign currency fluctuations.

While he raised his revenue and earnings estimates for HP, as well as his price target, Whitmore kept his hold rating because of downward pressure in HP’s printing business. He said printer revenue in the quarter came in softer than expected and that he sees HP stepping up efforts to regain market share. Such actions usually include larger discounts.

Sales in China were a bright spot in the quarter, up 20 percent year-over-year, but Whitmore said margins were down indicating that HP sold more PCs but of the cheaper variety. Windows 7 did provide a boost to sales, however, the analyst said in a research note.

Whitmore raised his fiscal 2010 revenue forecast to $119.4 billion from $116.7 billion, and earnings to $4.35 per share from $4.20. He also increased his price target to $52 from $44.

Nov. 23

Goldman Sachs Group (GS)

Bernstein lifts estimates

Despite a likely end-of-year slowdown in fixed-income trading, Goldman Sachs will top Wall Street expectations by cutting the percentage of sales it sets aside as compensation, Bernstein analyst Brad Hintz said on Nov. 23. Hintz also added that the seasonal slowdown doesn’t signal that the bank’s ability to profit from a recovery in credit markets has ended.

In a Nov. 23 note to investors, Hintz boosted his earnings estimates for 2009, even though sales from trading of fixed income products — corporate and government bonds, currencies and commodities — historically have slowed at the end of the year as traders cut risk and banks typically reduce lending.

Fixed-income sales and trading has helped buoy Goldman’s results for two straight quarters.

Hintz said that Goldman will likely compensate for the seasonal slowdown by cutting the percentage of sales it sets aside to compensate employees. Over the past year, Goldman has accrued $16.7 billion for employee compensation — that’s 58 percent of pre-tax profit, he said, above 2006 and 2007 levels of 53 percent. He expects that ratio to be 36 percent in the fourth quarter. “This, of course, will substantially enhance bottom-line performance,” he said.

Hintz expects Goldman to earn $19.67 per share for the year, up from a prior estimate of $18.88. Goldman is expected to post fourth-quarter results in mid-January.

Ebay (EBAY)

Standard & Poor’s Equity Research upgrades to buy from hold

S&P equity analyst Scott Kessler said on Nov. 23 that eBay recently completed the sale of some 70% of Skype for $1.9 billion in cash and a $125 million note. Kessler sees this as good news for eBay, as it can better focus on core operations, redeploy the proceeds to pursue international growth opportunities via organic investment and/or mergers and acquisitions, and move past uncertainties related to now-resolved Skype-related legal matters.

Notwithstanding some recent search challenges on eBay.com that have been fully addressed, Kessler thinks eBay will perform well this holiday shopping season, and sees the stock as attractively valued. His 12-month price target remains $26.