CREDIT SUISSE REITERATES OUTPERFORM ON JP MORGAN CHASE
Credit Suisse analyst Susan Roth Katzke says the Bear Stearns (BSC) sale comes as little surprise, but the $2 per share price (all stock) is well below what she would have expected, reflecting both dire circumstances at Bear and opportunity for well-capitalized and liquid JP Morgan (JPM).
She expects accretion to JP Morgan's 2008 and 2009 EPS. She says prime brokerage and clearing are a strategic plus (JP Morgan was sorely lacking in PB, she says); adds to energy/commodities, asset and wealth management, and distressed mortgage operations are also a benefit. Beyond this, she figures much of the capital markets busines represents overlap.
Katzke keeps estimates and target price ($50-55) for JP Morgan at this point; she has good bit of confidence in EPS accretion, but less confidence in the near-term market and macro-economic outlook.
CREDIT SUISSE DOWNGRADES CEMEX TO NEUTRAL FROM OUTPERFORM
On Friday, Cemex, S.A.B. (CX) forecast first quarter operating income down 25% from year ago. Credit Suisse analyst Marcelo Telles says his downgrade follows the company's weaker-than-expected guidance.
Telles sees significant deterioration across Cemex's markets, i.e., U.S. and Spain; and Mexico, which was supposed to counterbalance the U.S. slowdown, has shown significant sign of weakness, which in his view may not be explained just by lower investment in infrastructure.
He believes the decline in volumes expected to be seen in the first quarter is leading Cemex to rely considerably on strong recovery in the second half of 2008, but the likelihood of this materializing remains highly uncertain at this point. He notes that rising energy costs should continue to put pressure on margins.