S&P REITERATES BUY RECOMMENDATION ON SHARES OF LOWE'S COMPANIES
LOW; $24.58
July-quarter EPS of 64 cents, vs. 67 cents one year earlier, is 8 cents higher than our estimate. Comparable-store sales declined 5.3%, modestly better than our projection of a 7.5% decline, driven by the government's fiscal stimulus plan and marketshare gains. In our view, Lowe's continues to execute well in a challenging macro environment, and we are increasing our fiscal 2009 (Jan.) and fiscal 2010 EPS projections to $1.55 and $1.59 from $1.51 and $1.57. While we anticipate continued near-term pressure in housing, we think the shares remain attractive at 15.5 times our fiscal 2010 EPS forecast in what we view as a trough in Lowe's earnings cycle. /M. Souers
S&P MAINTAINS SELL OPINION ON SHARES OF DISH NETWORK
DISH; $31.47
We note recent comments from DirecTV (DTV) and Liberty Media (LINTA) on regulatory hurdles for a potentially renewed DISH/DTV merger. Separately, we think DISH's relationship with recently spun off Echostar (SATS) raises some concern about governance and related party transactions. Still, after lower-than-projected D&A and subscriber acquisition costs, we are raising our 2008 and 2009 EPS estimates by 29 cents and 15 cents, to $2.47 and $2.66. Our target price is $25, based on relative enterprise value-to-EBITDA and per subscriber. /T. Amobi, CPA, CFA
S&P REITERATES STRONG SELL OPINION ON SHARES OF HERSHEY
HSY; $37.85
Hershey shares are trading lower today after the company announces wholesale price increases and lowers sales growth guidance for 2009 to 2%-to-3% from 3%-to-5%. We look for higher prices to inhibit 2009 volume. We are lowering our 2008 EPS estimate to $1.86 from $1.87, and our 2009 EPS projection to $1.93 from $1.95. We remain wary of the prospects for consumer spending, commodity costs, and potential competitive pressure uptick. We are maintaining our 12-month target price of $33. The stock has an indicated dividend yield of about 3.1%. /T. Graves, CFA
S&P MAINTAINS HOLD OPINION ON LP UNITS OF ENTERPRISE PRODUCT PARTNERS
EPD; $28.77
EPD forms a joint venture with TEPPCO Partners (TPP) and Oiltanking Holding Americas to construct, own and operate a new Texas offshore crude oil port and pipeline system for the delivery of waterborne crude oil to refining centers along the upper Texas Gulf Coast. The project is scheduled for completion in 2010. We view this project favorably, since it will diversify EPD's sources of income. Meanwhile, we are keeping our 2008 earnings per unit projection at $1.83 and target price at $33, based on cash distributions of $2.15 and a target yield of 6.5%. /T. Shafi
S&P REITERATES HOLD RECOMMENDATION ON SHARES OF ASM INTERNATIONAL
ASMI; $24.12
According to unconfirmed reports on Reuters, CFO Arnold van der Ven replaces CEO Chuck del Prado in discussions with Applied Materials (AMAT). In June, ASMI rejected an offer of up to $800 million from AMAT and privately held Francisco Partners for its front-end unit. The report says CEO withdrew to focus on daily operations, but we think it is due to a lack of progress in negotiations. We see ongoing talks and expect ASMI to be pressured by activists, but we think a deal for the front-end business at the offer price is unlikely. ASMI shares are down more than 25% from their June high. /A. Zino, CFA
S&P KEEPS HOLD RECOMMENDATION ON SHARES OF UNIONBANCAL CORP.
UB; $65.46
UnionBanCal and Mitsubishi UFJ Financial Group (MTU) have agreed on a tender price of $73.50 per share for the remaining 35% of UnionBanCal that Mitsubishi UFJ does not already own. This is $10.50 per share higher than Mitsubishi UFJ's previous offer, rejected by UnionBanCal last week. We believe the $73.50 offer is a fair price, valuing UnionBanCal at 17.3 times our 2009 EPS estimate of $4.25. We expect the tender offer to be completed by the end of the third quarter, pending any necessary approvals. We are raising our 12-month target price by $9 to $74 to reflect the agreed-upon tender offer price. /K. Cole, CFA