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|  | DECEMBER 12, 2003
 S&P STOCK PICKS & PANS S&P Says Hold General Motors Also: analysts' opinions on AmeriTrade and Halliburton. Plus more... General Motors (GM ): Maintains 3 STARS (hold) Analyst: Efraim Levy If it can complete the $4 billion sale of its Hughes Electronics operations in 2003, GM hopes to have its U.S. non-executive pension plans almost fully funded by year-end. S&P is raising the 2004 earnings per share estimate by 30 cents, to $5.52, to reflect faster improvement in pension funding than S&P previously expected. Although GM will still have a sizable added pension and other post-retirement obligations, S&P expects the improved status to help its valuation. Based on a comparative price-earnings analysis, S&P has a target price of $50, up from $47. The 4% dividend yield adds to the total return. AmeriTrade (AMTD ): Reiterates 3 STARS (hold) Analyst: Robert Hansen The online broker Friday reported opening 15,000 net new accounts, and reported average daily volume of 180,000 trades during November -- above S&P's estimates. AmeriTrade raised its earnings guidance guidance to a range of 37 cents to 59 cents in fiscal 2004 (Sep.) -- 2 cents higher -- and upped the 14 cents estimate to 17 cents for the December quarter. S&P thinks Ameritrade is gaining market share, particularly among active investors. S&P's fiscal 2004 earnings per share estimate goes to 60 cents, from 55 cents, but the target price remains $15, which is 25 times S&P's fiscal 2004 estimate. S&P wouldn't add to positions given the premium valuation, potential price competition, and market volatility, which can affect trading volumes. Halliburton (HAL ): Upgrades to 4 STARS (accumulate) from 3 STARS (hold) Analyst: James Kartsonas News that the great majority of the asbestos claimants have accepted the proposed plan for reorganization of certain units coincides with reports of a Pentagon investigation that Halliburton may have overcharged the U.S. government for fuel sales in Iraq. Though S&P sees the possibility that any wrongful dealing in Iraq might negatively impact Halliburton, the asbestos news increases S&P's confidence in that issue being resolved by mid-2004, which S&P thinks will help narrow the valuation gap between the oil explorer and its peers. S&P is raising the target price to $29, from $27. Watson Pharmaceutical (WPI ): Downgrades to 3 STARS (hold) from 4 STARS (accumulate) Analyst: Phillip Seligman Watson received a subpoena from the Department of Health and Human Services for documents related to company-sponsored physician meetings in 2002-03, with respect to its anemia drug Ferrlecit. This, after news of a promising nail fungus therapy failing one Phase III trial and of rivals forming a generic oral contraceptive pact, means Watson has three new overhangs. S&P still sees 2004 earnings per share of $2.11, but on the string of adverse news and the likelihood of slower long-term growth, S&P is cutting the estimated forward p-e to 22 from 23, resulting in a 12-month target price of $47, which is reduced from $49. Adobe Systems (ADBE ): Reiterates 3 STARS (hold) Analyst: Scott Kessler The software maker posted November-quarter earnings per share of 34 cents, vs. 17 cents -- 2 cents above S&P and the Street's estimates. Revenues rose 22%, compared with S&P's 17% projection, on 40% growth in the ePaper segment and upside from the CS suite released in September. S&P is raising the January-quarter earnings per share estimate by 2 cents, to 32 cents, and fiscal 2004's (Nov.) by 2 cents, to $1.33. S&P's fiscal 2004 earnings per share forecast reflects revenue and operating margin projections above Adobe's guidance, which S&P believes is conservative. Based on a revised discounted cash-flow analysis, S&P is raising the 12-month target price by $4, to $45.  All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Standard & Poor's Regulatory Disclosure Any advice, analysis, or recommendations contained in articles labeled "Insight from Standard & Poor's" reflect the views of Standard & Poor's, which operates separately from and independently of BusinessWeek Online. It is possible that BWOL may from time to time publish information that is not consistent with advice, analysis, or recommendations that are published by Standard & Poor's. Standard & Poor's and BusinessWeek Online are each units of The McGraw-Hill Companies, Inc.
BW MALL
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