Word on the Street

Analyst Actions: Bank of America, Harley-Davidson, NII Holdings


CITIGROUP CUTS ESTIMATES ON BANK OF AMERICA

Citigroup analyst Keith Horowitz says Bank of America's (BAC) fourth quarter was very challenging and he sees a quarterly dividend cut to $0.05 from $0.32.

Horowitz raises $1.5 billion fourth quarter mark-to-market loss estimate to $3 billion. He estimates BAC has $165 million embedded credit losses on its balance sheet, of which has taken about 33% through loan-loss provisions or purchase accounting marks related to CFC.

He cuts $0.02 fourth quarter EPS estimate to $0.75 loss, $1.10 2008 EPS to $0.30 EPS, and $1.75 20'09 EPS to $0.25 EPS.

He keeps a buy rating, as sees excellent long-term value despite fundamental headwinds from current economic cycle.

RBC CAPITAL CUTS ESTIMATES, TARGET ON HARLEY-DAVIDSON

On Jan. 9, Harley-Davidson (HOG) said its HDFS unit's president resigned. RBC Capital analyst Edward Aaron says his checks point to about 15% fourth quarter U.S. retail sales drop.

Aaron notes the very weak macro backdrop, HOG's high operating leverage and management changes. He isn't convinced the company will give specific 2009 EPS estimates on its fourth quarter release. He says he could be more constructive on the story at some point in 2009, but before that there could be meaningful production cuts, possible restructuring and a dividend cut.

He sees EPS of $3.08 for 2008, cuts $2.70 2009 forecast to $1.98, and sets $1.77 for 2010. He lowers $30 price target to $16. He rates the stock as sector perform.

GOLDMAN REMOVES NII HOLDINGS FROM AMERICAS BUY LIST, CUTS TO NEUTRAL

Goldman Sachs analyst Stephen Graham says he is removing NII Holdings (NIHD) from America's Investment Buy List after its 93% rally from the stock's four-year low in November 2008.

Graham says despite strong operations, most notably in Brazil, weak Latin American economies (most notably Mexico and Argentina) make NIHD's business-oriented Nextel product vulnerable at the moment.

Meanwhile, he notes Latin American currencies are down about 20% year-over-year in fourth quarter 2008 vs. the U.S. dollar, so that NIHD's rapid growth -- boosted in appearance in the past by a weak dollar, will stall completely in dollar terms in 2009 in his estimates.

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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