CREDIT SUISSE CUTS LEHMAN BROTHERS TO NEUTRAL FROM OUTPERFORM
Credit Suisse analyst Susan Roth Katzke says Lehman Brothers (LEH) forecast a second quarter loss of $5.14 per share and announced plan to raised additional $6 billion in common equity and convertible preferreds. She says the loss exceeded her forecast, with mark-downs against real estate inventories more profound, but also equity capital markets activity -- with or without private equity losses -- was well below her forecast and expenses are higher.
Katzke says she appreciates the accomplishment of Lehman's de-leveraging and recent 15%-20% drop in its real estate inventories, but the retained exposure remains too large in so uncertain a macro economic environment.
She lowers estimates to $4.50 2008 loss and $3.85 2009 EPS. She cuts her $55-$60 price target to $35-$37.
GOLDMAN UPGRADES ARVINMERITOR TO BUY FROM NEUTRAL, ADDS TO AMERICAS CONVICTION BUY LIST
Goldman Sachs analyst Patrick Archambault says U.S. Class 8 truck orders have bottomed and he thinks investor attention will start shifting towards prospects for a 2009 pre-buy ahead of new emissions regulations in 2010 - highlighting ArvinMeritor (ARM), a direct beneficiary of increased Class 8 truck sales.
As the outlook for truckers improves on the back of benefits fiscal stimulus, normal early cycle improvements and compression of capacity in industry due to private truck failures, he thinks the outlook for reasonably strong 2009 Class 8 truck sales growth will begin to get discounted into ARM shares. He also thinks internal cost initiatives should continue to support profit growth.
The analyst raises his $15 6-month target to $20.
WEDBUSH MORGAN DOWNGRADES SKECHERS U.S.A. TO BUY FROM STRONG BUY
Analyst Jeff Mintz tells salesforce a potential shift toward more athletic styles could pressure near-term sales of Skechers's (SKX) low-profile product. He also notes recent checks on Cali Gear business suggests a significant slowdown.
Mintz says U.S. revenue growth is expected to be negative in the second quarter, as SKX continues to face a difficult retail environment in which its core family footwear customer is feeling the pinch of rising gas and food prices. He notes the company's international business is smaller in the second quarter than in the first quarter.