GOLDMAN ADDS BOEING TO CONVICTION SELL LIST, WAS RATED NEUTRAL
Goldman Sachs analyst Richard Safran says he downgrades Boeing (BA) as he expects weak macroeconomic backdrop and record fuel prices to hurt airlines and translate to significant slowing in order bookings, driving further multiple compression.
Safran also expects consensus estimates to be revised downward as delivery rates and margin expansion will likely disappoint. Safran believes there is more risk to the 787 program than currently priced in, as the program has yet to even enter flight test.
While BA has seen 25% multiple compression from its peak, he notes that its relative multiple is still another 30% from where it troughed in previous cycles. He has a 12-month price target of 60 on the stock.
He also downgrades Precision Castparts (PCP) and Textron (TXT) to neutral from buy.
FRIEDMAN BILLINGS RAISES ESTIMATES ON SILICON LABS
Friedman Billings analyst Craig Berger says Silicon Laboratories (SLAB) raised second quarter revenue guidance to $102-$104 million and pro forma EPS to $0.40-$0.42 on strength in voice, embedded modem products, chips that go into networking and communications end markets.
Berger notes he upgraded SLAB last week on: 1) strength in networking and communications business, 2) his view that broadcast/FM tuner business is more sustainable than thought, 3) attractive valuation -- drivers which still remain in place.
He says SLAB acquiring Integration Associates, which he believes will be about $0.04 dilutive to EPS in the second half of 2008 and largely EPS neutral in 2009. He cuts 44 price target to 43 due to firm's lower net cash forecast.
He raises $1.65 2008 EPS estimate to $1.66 and $1.75 for 2009 to $1.80. He keeps outperform recommendation on the stock.
NEEDHAM RAISES ESTIMATES, TARGET ON JABIL CIRCUIT
Needham analyst Sean Hannan says Jabil Circuit (JBL) reported solid May-quarter results of $3.09 billion in revenues and $0.26 in non-GAAP EPS, with top line near midpoint and EPS above prior guidance. He says quarterly results helped by mobility business.
Hannan says JBL continues to face elements of macro-headwinds on multiple fronts, but he thinks the company is weathering the challenging environment and continues to be well positioned through specific program ramps and improved leverage opportunities moving into fiscal year 2009 (August) and beyond. He says guidance was solid overall.
He raises $1.04 fiscal year 2008 EPS estimate to $1.13 and $1.19 fiscal year 2009 to $1.36. He maintains buy, but raises 14 target price to 18.