Analyst Picks & Pans
Stock Picks: Priceline.com, AIG, Altera
Kaufman Bros. maintains buy; removes from Focus List
Kaufman Bros. analysts Aaron Kessler and Andrew Connor removed online travel company Priceline from the firm's Focus List as they expect the shares to consolidate recent gains in the near term after having increased 36% in November. The analysts tied the stock's recent gains to "upside to earnings and a strong 4Q outlook".
Kessler and Connor pointed out in a Dec. 1 client note that traffic data remains strong at Priceline and Booking.com. According to industry researcher Compete, Priceline.com traffic increased 42% in October, vs. 48%, year-over-year, in the third quarter, and 35% year-over-year in the second quarter. Also, their analysis of worldwide searches for "Booking.com" on Google indicated that searches have increased 182% year-over-year in the fourth quarter (through Nov. 28) vs. 176% in the third quarter and 147% in the second.
The analysts maintained a $240 price target on the shares.
American International Group Inc. (AIG)
Standard & Poor's Equity Research maintains hold; cuts price target
In a Dec. 1 note, S&P equity analyst Catherine Seifert said she sees concerns over the health of certain AIG insurance units being offset by the announcement that AIG closed its previously announced $25 billion debt exchange with the Federal Reserve Bank of New York as part of its plan to position two life insurance units for a possible sale or public offering.
Seifert said her hold opinion reflects her view that if AIG can retain 75% of its deferred acquisition cost value, tangible common equity per share would climb to $81.60 from a deficit of $162.06 a share at September 30. Her $35 price target, cut $10, assumes the shares trade at a discount to book value.
Altera Corp. (ALTR)
Barclays keeps equal-weight; raises estimates, price target
Barclays analyst Tim Luke said on Dec. 1 that Altera, a maker of programmable logic devices (PLDs) used in communications, computer and storage, industrial, and consumer applications, raised its fourth-quarter outlook, with revenue growth guidance moving up sharply to 15%-18% quarter-over-quarter from 6%-10%. Luke noted that Altera management sees all business segments posting quarter-over-quarter gains, reflecting "a broad-based customer end demand uptick, some inventory restocking, and solid new product traction".
Luke raised his fourth-quarter EPS estimate from 24 cents to 29 cents, his 2009 forecast from 79 cents to $1.03, and his 2010 view to $1.20. He also increased his $23 price target to $24. The analyst said, in general, he continues to favor PLDs given the segment's exposure to enterprise & industrial firms, high margins, cash flow, and the absence of Asian competition.