Analyst Actions: IBM, Sears, Apple

Opinions on various stocks on Monday

From Standard & Poor's Equity Research

GOLDMAN SACHS MAINTAINS BUY ON IBM

Goldman Sachs analyst David Bailey says the magnitude of IBM's (IBM) fourth quarter outperformance (vs. both his and Street estimates) should cause shares to start rebounding off of depressed valuation levels. He notes the company preannounced double-digit EPS growth, but the stock trading at sub-S&P 500 multiple.

Bailey says though forex provided an incremental $375-$425 million to $28.9 billion top line number, he thinks IBM saw fundamental upside from most operating units. He believes the company is likely to affirm the Street's full 2008 forecast when it releases results Jan. 17.

He says though the 2008 outlook for tech is uncertain, he views IBM as defensive in current environment, sees solid earnings growth. He has a $125 12-month price target on the stock.

GOLDMAN DOWNGRADES SEARS HOLDINGS

Goldman Sachs analyst Adrianne Shapira says she is downgrading Sears Holding (SHLD) to sell from neutral as she sees further downside to operating fundamentals in a tougher macro environment.

Shapira says Sears is in a tough spot with its hardlines franchise under pressure from a weak housing environment and increasing competition from big box rivals (Best Buy (BBY) in consumer electronics). Furthermore, she notes Sear's soft lines business remains in disarray with no corrective action in sight.

She expects share loss to accelerate and margin shortfalls to intensify over the next several quarters. She cuts $6.87 fiscal year 2008 (January) EPS estimate to $6.49, $6.48 fiscal year 2009 to $5.49, $7.50 fiscal year 2010 to $6.10. She slashes $118 price target to $82.

RBC CAPITAL REITERATES OUTPERFORM, $215 TARGET ON SHARES OF APPLE

RBC analyst Mike Abramsky says fresh data from RBC's Technology Adoption Panel and store checks suggest that Apple (AAPL) saw massive Mac sales in the holiday quarter, despite concerns over consumer holiday spending growth.

He says, while less dramatic than 2007's Mac World iPhone launch, he thinks this year's announcements may include: an ultra-thin and light $1200 13-inch laptop MacBook with SSD flash drive; updated wireless computing strategies; and WiFi AirPort Express.

Abramsky raises his $5.08 fiscal year 2008 (September) EPS on $32.7 billion revenue estimates to $5.11 on $32.8 billion; $6.19 2009 EPS on $40.4 billion revenue to $6.23 on $40.6 billion. He reiterates outperform rating and $215 price target on the stock.