PIPER JAFFRAY DOWNGRADES MOTOROLA TO SELL FROM NEUTRAL
Piper Jaffray analyst T. Michael Walkley says according to his June checks, Motorola (MOT) continues to lose handset market share in North America. With Motorola recently announcing plans to separate handset unit, he believes that the potential for distractions and continued weak product portfolio could result in accelerating share losses.
Walkley notes that North America represents nearly half of Motorola's unit sales, he sees weakening trends in other MOT units. Given his expectations of weak Mobile Device results resulting in lower cash levels, he believes that a spin-off of the unit is unlikely in the near term.
He widens $0.05 2008 loss estimate to $0.11 loss and cuts $0.27 2009 EPS estimate to $0.23 EPS. He cuts 9.75 price target to 7.
CITIGROUP REITERATES BUY ON SOHU.COM
Citigroup analyst Jason Brueschke says Friday's sell-off of Sohu.com (SOHU) stock was sparked by a Reuters article confirming what almost everyone already knew: Sohu.com will face challenging year-over-year comps on its brand advertising side due to a post-Olympics "hangover" effect.
However, he believes online gaming will continue to power revenues and EPS growth in 2009. He notes he was modeling an 18% year-over-year increase for 2009 advertising revenus, so the company's forecast of 20%-30% growth is actually above his estimates. Finally, he notes online gaming is highly immune from growing inflationary pressures in China, another positive.
He raises $3.24 2009 EPS estimate to $3.60 and 80 price target to 90.
UBS FINANCIAL UPGRADES CUMMINS TO BUY FROM SELL
UBS Financial analyst David Bleustein says his upgrade of Cummins (CMI) largely reflects results from his proprietary Truck Survey and CMI's improved market position due to Caterpillar's (CAT) plan to exit the on-highway engine business post 2010.
Bleustein thinks CMI's improved market position should enable it to capture additional market share and extract price hikes. He notes that 25+% of survey respondents who would have considered a CAT engine before CAT's news that it will not produce a 2010 engine said they would no longer consider one. As such, he expects some customers of CAT to favor the CMI engine going forward.
He raises $4.60 2008 EPS estimate to $4.75 to reflect higher forecast incremental margins. He increases $5.20 2009 EPS to $6.00 and 42 price target to 86.