S&P MAINTAINS BUY OPINION ON SHARES OF JPMORGAN CHASE (JPM; 47.11):
JPM and Bear Stearns (BSC; 10.50) amend their merger agreement, increasing the price to $10 per BSC share from $2 a share. The FED agrees to supply a $30 billion lending facility, with JPM responsible for the first $1 billion in losses. Given that BSC's board approves the merger, and that new shares are to be issued that will give JPM 39.5% ownership if BSC's stock, we believe the acquisition will be consummated at the current offer price of $10 a share. -S. Plesser
S&P MAINTAINS HOLD OPINION ON PALM SHARES (PALM; 4.72):
PALM posts third quarter operating loss per share of $0.23, vs. EPS of $0.11, $0.03 wider than our forecast. Revenues were down 23%, falling a bit further than expected as pressure on the handheld segment and slower sales of legacy smartphones outweighed sales of the new, low-priced Centro phone. Gross margin was weaker than we anticipated. While we believe sales will turn around in fiscal year 2009 (May) on further gains of Centro and a revamped product lineup, we see ongoing operating losses due to higher marketing costs and increased interest expenses. We maintain our price/sales-based target price of 6. -T. Rosenbluth
S&P MAINTAINS HOLD OPINION ON SHARES OF STANDARD PACIFIC (SPF; 4.93):
With SPF getting an extension of a waiver of non-compliance with its credit facility, lowered from $900 million to $700 million, and holding $293 million in cash on hand at Mar. 21, we believe it has a better chance of surviving the severe housing downturn. SPF also appointed a new CEO from its director ranks last week. We believe SPF's high lot inventories in California will become attractive when the housing market turns around. Applying a price-to-book slightly below 0.5 times to a forward book value of $14.75, in line with small builders, we are maintaining our 12-month target price at 7. -K. Leon-CPA
S&P MAINTAINS BUY OPINION ON SHARES OF EVERGREEN SOLAR (ESLR; 8.14):
ESLR shares are down 55% since the start of 2008, which we believe is due to economic worries and an uncertain supply/demand equation for solar panels and their primary raw material of silicon. We still think ESLR's prospects are favorable, as silicon purchase pacts of the past year are enabling it to expand production goals. Yet, given limited visibility for ESLR's primary business factors, we are reducing our cash flow growth outlook for the coming years. We are also cutting our DCF-based 12-month target price by $6 to $11, which still offers appreciation potential.-M. Jaffe