CITIGROUP UPS ESTIMATES, TARGET FOR IBM
Citigroup analyst Richard Gardner says IBM's ((IBM) $24.5 billion revenue (+11% year-over-year) beat his forecast by $250 million and consensus by $800 million. He notes IBM still delivered several points of organic growth despite macro trends; services/software upside made up for hardware miss.
Gardner says 90 basis points upside in gross and 120 basis points in pretax margins resulted in $1.65 EPS, far above his $1.48 estimate and $1.45 consensus. He notes forex only benefits revenue, not EPS. He says U.S. more than holding its own and bookings are solid.
He raises $8.35 2008 EPS estimate to $8.54 and $9.61 for 2009 to $9.79.
He says IBM remains among his favorite hardware names for 2008, despite an 11% year-to-date rise. He raises his 12-month price target from 146 to 157. He maintains a buy opinion.
CITIGROUP UPGRADES OMNITURE TO BUY FROM HOLD
Citigroup analyst Brent Thill says he's always liked Omniture's (OMTR) fundamental story, but stepped to the sidelines as he felt there would be a better opportunity to participate in one of the fastest growth stories in his universe. He thinks the stock's pullback from a 52-week high of 38.57 embeds the bulk of the risks to the stock, making risk/reward compelling.
Thill notes this isn't a call on the first quarter 2008, but a call on what he thinks will be a strong performer over the course of 2008. He says the company's core web analytics platform was 78% of 2007 revenue, and he feels it now has the right product set at the right time to monetize a growing base of customers.
He sees $0.43 2008 EPS and $0.62 for 2009; he has a 30 price target for hte stock.
WEDBUSH CUTS ESTIMATES, TARGET FOR POLYCOM
Wedbush analyst Scott Sutherland says Polycom's (PLCM) first quarter results were essentially in line with expectations, but the challenging U.S. macro economic environment is subduing overall growth and strength from international markets. He notes pro-forma EPS was $0.36, in line with consensus, but below his estimate of $0.37.
Given the macro environment, Sutherland prefers to remain conservative and modestly lowers his 2008 and 2009 estimates. He cuts 2008 pro-forma EPS to $1.60 from $1.65, 2009 to $1.90 from $1.95; as for revenues, he cuts forecasts for 2008 to $1.09 billion from $1.10 billion and for 2009 to $1.21 billion from $1.23 billion.
He maintains buy on the stock, but lowers his 29 price target to $28 to take a more conservative perspective given macro environment.