JEFFERIES UPGRADES GOOGLE TO BUY FROM HOLD
Jefferies analyst Youssef Squali says Google (GOOG), defying economic headwinds, delivered in-line first quarter revenues, EBITDA, and exceeded normalized EPS estimates. He upgrades on impressive improvements in monetization, no signs of weakness from economic downturn and upside potential from display, video, mobile.
Squali notes that first quarter revenues, net of traffic acquisition costs (TAC), are up 45.6% year-over-year and 9.1% sequentially, slightly ahead of consensus; strength in international, Google.com and monetization improvements were the main drivers. Says $4.85 normalized EPS ahead of $4.52 consensus, mostly on lower tax rate, lower shares count, slightly lower TAC.
He ups $19.19 2008 EPS estimate to $20.51, $24.40 2009 to $25.74. He keeps 600 price target on the stock.
GOLDMAN UPS TARGET FOR ETRADE FINANCIAL TO $4.00
Goldman analyst William Tanona says as expected, E*Trade's (ETFC) first quarter was another difficult quarter. However, management's tone on $11.4 billion home equity portfolio was much more upbeat than he expected given the current state of the U.S. real estate market.
Nonetheless, Tanona believes E*Trade needs to raise capital; management expects to generate about $500 million in asset sales; however, this may not be sufficient given expected further house price declines. He says the brokerage business appears to be in good condition; the firm brought in $300 million in net new assets. He ups 6-month price target to 4 from 2.50 as client attrition trends have stabilized in last quarter.
He notes shares traded at 34% discount to book value of $5.89, new target assumes 30% discount to book value.
OPPENHEIMER CUTS ESTIMATE FOR INTUITIVE SURGICAL
Oppenheimer analyst Amit Hazan says Intuitive Surgical's (ISRG ) first quarter sales and EPS missed his estimates. He says unit placements were good, but not good enough; he does not believe higher U.S. sales trends for the da Vinci product are sustainable and still sees U.S. new unit growth decelerating notably this year.
Hazan notes that instrument and accessory sales missed his forecast for the third straight quarter. He believes the first quarter was nowhere near enough to sustain ISRG's valuation. He also thinks the company is the most exposed in its group to developing hospital-spending/credit issues, potentially further limiting 2008 upside.
He believes diminishing upside to his estimates will continue to pressure the shares in 2008. He cuts $5.06 2008 EPS estimate to $5.04. He maintains perform opinion.