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|  | DECEMBER 31, 2003
 S&P STOCK PICKS & PANS S&P Cuts Janus Capital to Avoid Also: analysts' opinions on T. Rowe Price and Halliburton. Plus more... Janus Capital (JNS ): Downgrades to 2 STARS (avoid) from 3 STARS (hold) Analyst: Robert Hansen S&P thinks Janus' $31.5 million estimate for shareholder restoration helps quantify the regulatory risk. However, S&P expects higher expenses in 2004 on increased compensation, legal, amortization, and occupancy costs. S&P projects a lower interest expense amid a $350 million to $450 million debt buyback, a stock buyback of up to $300 million, and higher interest income. S&P's earnings per share estimates remain at 83 cents for 2003 and 85 cents for 2004. But, S&P is cutting the target price to $14, from $16, or 16 times S&P's 2004 estimate. S&P would avoid Janus, given the expectation of little earnings per share growth and market share losses in 2004. T. Rowe Price (TROW ): Maintains 4 STARS (accumulate) Analyst: Robert Hansen S&P expects strong asset growth in the December quarter for T. Rowe Price, given that the S&P 500 index is close to gaining more than 11% in the quarter and that stocks were 69% of the firm's total assets under management at the end of the September quarter. S&P is leaving the earnings per share estimates unchanged at $1.75 for 2003 and $2.20 for 2004. However, S&P is raising the 12-month target price to $55 from $47, or 25 times S&P's 2004 earnings per share estimate and a significant premium to the firm's peers. S&P considers the premium justified based on the company's broad product offering, strong track record, and consistent net inflows. Halliburton (HAL ): Reiterates 4 STARS (accumulate) Analyst: James Kartsonas The Pentagon announced that it will assume the task of supplying fuel to Iraq, a job previously assigned to Halliburton. The move comes weeks after the company was accused of overcharging for fuel supplied to Iraq. S&P doesn't expect any material effect on Halliburton's earnings from the cancellation, given the size of the contract. S&P continues to view the shares as attractive, trading at a discount to peers. S&P expects the discount to narrow in the months ahead and the shares to resume their historical valuation as the asbestos settlement likely comes closer to an end. Starwood Hotels & Resorts (HOT ): Upgrades to 3 STARS (hold) from 2 STARS (avoid) Analyst: Thomas Graves S&P sees a greater chance that Starwood will add Le Meridien hotels as it and Lehman Brothers Holdings acquire Meridien's senior debt. Also, recent U.S. hotel data from Smith Travel Research indicates rising business travel demand. Before special items, S&P's 2003 earnings per share estimate remains 78 cents, and S&P is adjusting the 2004 estimate to 95 cents, from 93 cents. Starwood's price-earnings is sharply above the S&P 500's, and unexpensed options creates a concern about earnings per share quality. But S&P thinks optimism about an industry upturn, the Meridien opportunity, and projected cash generation will support Starwood's stock, and is raising the target price to $38, from $30. Juniper Networks (JNPR ): Maintains 3 STARS (hold) Analyst: Megan Graham Hackett Juniper announced Wednesday it had been awarded a contract from Science Applications International Corp. for all edge and core IP/MPLS routers under the Global Grid Bandwidth Expansion (GIG-BE) project for the Defense Information Systems Agency, which is considered the next step in the Internet's development. While Juniper didn't quantify the size of its contract, the GIG-BE contract is reportedly a roughly $900 million project over the next two years. While S&P views Juniper's win a positive, at a price-sales of 11 -- well above peers -- S&P would hold, but not add to, positions in Juniper. Radian Group (RDN ): Maintains 4 STARS (accumulate) Analyst: Erik Eisenstein Radian says it will cease operations of its Internet-based mortgage services unit RadianExpress.com in a shutdown expected to be completed on or about Mar. 1, and expects to incur a 9 cents after-tax charge in the fourth quarter of 2003. The move isn't much of a surprise to S&P after the Radian Lien Protection product suffered a legal setback in July, 2003, which limited, in S&P's view, the growth potential of Radian Express. In any event, S&P had viewed Radian Express as a breakeven proposition in 2004 and is leaving the 2004 estimate at $5.20 and keeping the 12-month target price of $57.  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.
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