Analyst Picks and Pans

Analyst Picks and Pans: CBS, Crocs, Urban Outfitters


CBS Corp. (CBS) Jefferies & Co., Deutsche Bank keep hold opinions

CBS Corp. said Friday that adjusted profit for the second quarter ended in June fell sharply to 8 cents per share, beating the average forecast of 7 cents, according to Thomson Reuters. Revenue fell 11% to $3.01 billion, while analysts expected $3.03 billion.

CBS said Thursday it expects the government's "cash-for-clunkers" program to help boost auto manufacturers, a critical group of ad buyers for TV. The company reiterated its full year forecast of $1.73 billion to $1.93 billion in operating income before depreciation and amortization.

In a note to clients, Jefferies & Co. analyst Brian Shipman said he is less optimistic than CBS management about a near-term recovery in advertising markets, which have been mired in the worst slump in years. He reiterated a hold rating on CBS shares, saying, "We remain more cautious on the advertising outlook ... particularly in secularly challenged media such as radio and broadcast TV."

Deutsche Bank analyst Doug Mitchelson, who also kept a hold rating on the company, raised similar concerns, citing "secular issues for (CBS's) local and broadcast businesses."

Crocs (CROX) Wedbush raises estimates, but keeps neutral opinion

Wedbush analyst Jeff Mintz said Crocs' second quarter results beat expectations. He notes the company has achieved significant balance sheet improvement since the end of the first quarter.

Mintz trimmed his $0.89 2009 loss estimate to a $0.60 loss and $0.12 2010 loss to $0.04 loss. He says, although he sees losses for 2009 and 2010, the company is clearly moving in the right direction, as evidenced by reduced inventory, elimination of debt and improving gross margins.

Mintz says the plastic shoe maker's shift toward greater focus on retail business could help reinvigorate the brand and ultimately improve its wholesale business. But for now, he kept a neutral opinion. He set a $5 price target for the stock.

Crocs shares jumped nearly 33% to 5.66 during trading Friday.

Urban Outfitters (URBN) Barclays Capital upgrades to equal weight from underweight

Urban Outfitters reported second-quarter sales slightly better than expected and an analyst upgraded the stock. On Thursday, the company said second-quarter same-store sales fell 6% and total sales for the quarter edged up 1% to $459 million -- just above the $457.8 million analysts polled by Thomson Reuters were expecting.

Barclays Capital analyst Jeff Black said same-store sales are improving and said expenses and inventory have been well managed by the company, which operates namesake stores as well as the Anthropologie and Free People chains.

"Early fall will remain challenging but sales trends are coming in better than we expected with markdown and margin initiatives likely to benefit the second half of 2009," Black wrote in a note.

He raised his price target to $29 from $18 and upgraded his rating on the stock to equal weight from underweight.

Urban Outfitters shares rose 6.2% percent, to $27.90 during midday trading Friday. The stock has traded between $12.33 and $38.40 during the past 52 weeks.

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