The following companies are subjects of research reports issued recently by investment firms. Many of the reports may be purchased from Thomson Financial Securities Data, at 888-989-8373 or www.tsfd.com, or are available through Dow Jones Interactive. Share prices at the time the report was issued and the date of the report are in parentheses.
Alcoa
/zigman2/quotes/200686102/composite AA
-5.90%
(AA-NYSE)
by Lehman Brothers (31, Aug. 1)
Alcoa looks cheap trading at half the market multiple considering its
faster-than-market EPS growth prospects of near 20% for the next few years.
Maintain Buy
rating.
Cigna
/zigman2/quotes/208431372/composite CI
-0.07%
(CI-NYSE)
by Bear Stearns (96 9/16, Aug. 3)
Cigna currently trades at 12.8 times our 2001 EPS versus an average of 16.5
times for our narrowed universe of the larger, better-positioned players --
a 32% valuation discount with a similar long-term EPS growth outlook. We
reiterate our Buy
. With a lower risk profile and among the highest-quality
financial measures in the sector, we believe it stands out with
under-recognized strength.
Dial
(DL-NYSE)
by J.P. Morgan (12 13/16, Aug. 7)
We are downgrading to a Market Performer
from a Long-Term Buy based on the
announcement that Dial's board has ousted its CEO and CFO, and that it
expects to miss consensus estimates for the second half of 2000. On a
preliminary basis we are cutting our third-quarter estimate to 10 cents [a
share] from our previous 21 cents, and cutting our full-year 2000 estimate
to 55 cents from our previous 77 cents.
Dynegy
/zigman2/quotes/221050379/composite DYN
+1.57%
(DYN-NYSE)
by PaineWebber (77 3/16, Aug. 8)
Attractive
. Announced a definitive
agreement to acquire 1,700 megawatts of unregulated power-generation
capacity in central New York. This purchase is in line with management's
well-stated goal of accretively expanding the scope and
geographic/fuel-type diversity of its generation portfolio. Management
believes this purchase could be accretive to its 2001 EPS by roughly 10-15
cents. Though we are still working on fine-tuning our projection model, we
are now more comfortable raising our 2001 EPS estimate. We are raising it
to $3.15 from $3.05 (the Street consensus is $3.09, reflecting a range of
$3.00-$3.25). We would expect Street estimates to edge higher as others
fine-tune their assumptions for this purchase.
Four Seasons Hotels
(FS-NYSE)
by PaineWebber (71 1/2, Aug. 4)
Attractive
. We are increasing our 2001
EPS estimate by C10 cents to C$3.60 (plus-22%) as it exceeded our
second-quarter 2000 estimate by three cents, and our outlook for the second
half of 2000's growth in revenue per available room and profit margin are
more optimistic. However, we are maintaining our 2000 EPS estimate of
C$2.95 (plus-17%) as we estimate the one-time July 2000 employee strike at
the Four Seasons Vancouver will offset the company exceeding our
second-quarter estimate and our more optimistic outlook for the company's
fundamentals.
H.B. Fuller
(FULL-NNM)
by Merrill Lynch (38 1/4, Aug. 3)
In view of the disppointing EPS pre-announcement last night, we are
lowering our intermediate-term investment opinion from Accumulate to
Neutral
.
GSI Lumonics
(GSLI-NNM)
by Needham (24, Aug. 3)
We are maintaining our 2000 EPS estimate of 63 cents, compared with a loss
of eight cents a year earlier. We continue to look for a 49% increase in
EPS in 2001 to 94 cents. We continue to rate the shares a
Strong Buy
rating, with a $36 12-month price
target.
Natuzzi
/zigman2/quotes/206283720/composite NTZ
+1.41%
(NTZ-NYSE)
by Credit Suisse First Boston (10 7/16, Aug. 2)
We are initiating coverage with a Buy
rating. The world's largest manufacturer of leather
upholstery. Our positive view is based on the company's impressive margins
(22% operating margins), industry-leading return on invested capital
(23.4%), debt-free balance sheet and strong cash flow. Very attractively
valued, trading at only 6.3 times our 2001 earnings estimate and 3.1 times
projected fiscal 2001 earnings before interest, taxes, depreciation and
amortization. We base our target price of $15 (44% upside potential) on a
conservative multiple of nine (versus the company's five-year average
multiple of 14) times our 2001 EPS estimate of $1.65.
Nokia
/zigman2/quotes/207421390/composite NOK
+0.75%
(NOK-NYSE)
by UBS Warburg (43 7/16, Aug. 2)
Second-quarter results were in line with estimates, but the market appeared
disappointed by this performance. Although we have trimmed our second-half
2000 estimates, we believe the company's risk/reward profile looks
favorable, and we reiterate our Buy
rating. In addition, management's suggestion that
third-quarter earnings could fall sequentially because of timing issues
surrounding the launch of new products has caused concern. We believe the
debate will now focus on whether this is just a temporary issue (and if
margins will recover sharply in the fourth quarter, as suggested by the
company), or whether these problems could continue to affect the company
longer term.
Salon.com
(SALN-NNM)
by W.R. Hambrecht (1 1/2, Aug. 1)
We believe that the Salon brand is still strong, through monetization of
the brand and compelling, original content has been problematic. As such,
our rating is a purely speculative Buy
rating, based on the assumption that the brand, currently
trading at an enterprise value of $6.8 million, $2.72 per unique user, may
be valuable to a media acquirer.
SciQuest.com
(SQST-NNM)
by Gruntal (9 15/16, Aug. 2)
We have initiated coverage on the common stock of the health-care Internet
business-to-business company, with intermediate-and long-term investment
ratings of Market Performer
. The company's competitive advantages
include a narrow industry focus, exclusive supplier agreements and a
management team with health-care and supply-chain experience. Although it
is a leader within its industry niche, we believe that the stock is fairly
valued. Our intermediate-and-long-term target prices for the common stock
are $10 and $12, respectively.
Steelcase
/zigman2/quotes/204214199/composite SCS
-1.80%
(SCS-NYSE)
by Credit Suisse First Boston (17, Aug. 4)
We initiated coverage with a Hold
. SCS is the largest manufacturer of office furniture in
the world and has a leading market share of 19% in the U.S. Our old rating
is based primarily on our cautious industry outlook. We expect the industry
to slow by the end of the year given decelerating white-collar job growth
and corporate profits. Additionally, the stock is up 42% year-to-date and
now trades in line with its historical valuation multiples (12.1 times
earnings, 5.9 times fiscal-year EBITDA).
Waters
/zigman2/quotes/205633949/composite WAT
-0.93%
(WAT-NYSE)
by SG Cowen (118, Aug. 1)
Strong Buy
. We forecast top-line
sustainable growth at 12% and EPS growth of 20% driven by operating margin
expansion and debt reduction, with ample room for upside. Based on the
company's excellent growth prospects and strong market position, we believe
the stock should trade at a premium to the S&P and the comparable
group. We are raising our target price on the stock to $45 from $135 per
share. This target is based on a 2.1 times multiple to the S&P, or 53
times, applied to our 2001 EPS estimate of $2.71, a 23% upside to current
levels.
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