Analyst Actions: Starbucks, Apple, Whirlpool

From Standard & Poor's Equity Research

GOLDMAN CUTS ESTIMATES, TARGET FOR STARBUCKS

Goldman Sachs analyst Steven Kron says Starbucks (SBUX) pre-released weaker-than-expected $0.15 second quarter EPS, vs. his $0.20 estimate and $0.21 consensus forecast, including $0.03 of cost related to implementation of its transformational agenda. He notes that the coffee chain indicated overall revenue growth would be about 12% and U.S. same-store sales softened materially to down "mid-single digits."

Kron further notes that the company guided fiscal eyar 2008 (September) to "somewhat lower than $0.87" reported in fiscal year 2007, vs. his $0.95 and $0.97 consensus estimates.

He cuts $0.95 fiscal year 2008 EPS estimate to $0.83, $1.13 fiscal year 2009 to $0.94, and 20 price target to 18. We says he would not buy on weakness, and reiterates neutral. He sees limited visibility into timing of fundamental trough.

NEEDHAM REITERATES STRONG BUY ON APPLE

Needham analyst Charlie Wolf says Apple's (AAPL) $1.16 second quarter EPS, and $7.51 billion revenues easily topped guidance.

Wolf says there was only one story in the second quarter -- Mac sales; in a PC market that experienced 12% growth, Mac shipments rose 51%. He cites three key drivers of the acceleration of Mac shipments: 1) iPod halo effect, where Windows users owing iPods switch to the Mac; 2) Apple Stores, which have emerged as big contributors to Mac sales growth; 3) Mac's ability to run Windows applications courtesy of the launch of Mac OS 10.5.

He notes iPhone sales missed his estimate, but topped Apple's.

He cuts $5.35 fiscal year 2008 (September) EPS estimate to $5.25 due to lower interest income. But he raises $6.65 fiscal year 2009 to $6.70. He maintains 235 price target on the stock.

MORGAN KEEGAN CUTS ESTIMATES FOR WHIRLPOOL

Morgan Keegan analyst Laura Champine says Whirlpool's (WHR) $1.22 first quarter EPS missed her $1.69 estimate and the $1.57 Street consensus. Furthermore, Whirlpool was forced to cut 2008 EPS guidance to $7.00-$7.50 from $8.50-$9.00 given the enormous rise in oil and steel prices in the first quarter and weak U.S. demand.

Champine lowers her $8.10 2008 EPS estimate to $7.03, $9.95 2009 to $9.56. However, she notes that Whirlpool will attempt to offset macro-challenges through productivity enhancements related to its Maytag acquisition and through cost-based price increases. And despite the extremely difficult operating environment, she maintains her outperform rating, based on an attractive valuation and the company's global dominance of the appliance industry.