NEEDHAM DOWNGRADES BANKRATE TO HOLD FROM BUY
Needham analyst Mark May says in the past few weeks he's grown increasingly concerned about Bankrate's (RATE) near-term outlook as coverage on hyperlink mortgage-related rate tables and quality of display/brand advertisers have remained uncharacteristically low.
May has not seen the seasonal rebound in advertiser activity typical of December and January. He thinks, while mortgage rate declines/refinancing activity has benefited site traffic, this has not translated into meaningful revenue upside, as lending standards remain tight.
With fourth quarter EPS due Thursday, he cuts $0.36 view to $0.34.
FBR CAPITAL KEEPS MARKET PERFORM ON ELECTRONIC ARTS
FBR Capital analyst Heath Terry says Electronic Arts' (ERTS) third quarter results proved to be a big miss and its outlook was dramatically lowered.
Terry notes ERTS initiated $1.00 fiscal year 2010 (March) EPS on $4.3 billion revenue forecast. With over $7 per share in cash expected by fiscal yearend, the shares are trading at less than his $0.99 fiscal year 2010 EPS estimate net of cash and interest income; he sees little downside to owning the shares.
He believes mgmt must continue to execute on cost reductions and game quality improvement to generate profitable hit titles. He keeps $20 price target and market perform rating.
CITIGROUP REITERATES SELL ON DISNEY
Analyst Jason Bazinet says Walt Disney's (DIS) $9.6 billion first quarter revenues were down 8% year-over-year, with most significant drops at Studio, Networks, Parks; $1.4 billion operating income was down 36% year-over-year with material declines at Studio, Networks, Parks.
He notes that Disney has net debt of just $8.4 billion, suggesting net debt-to-EBITDA of about 1.2 times his new 2009 EBITDA estimate. Adds, however, that share buybacks slowed to just $100 million in first quarter fiscal year 2009, about 90% below first quarter fiscal year 2008 levels.
Bazinet cuts $1.90 fiscal year 2009 (September) EPS view to $1.62, reflecting far steeper declines in DVDs and ad revenues. He lowers $20 target to $18.
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.