RBC CAPITAL DOWNGRADES APPLE
RBC Capital analyst Mike Abramsky says he is cutting Apple (AAPL) to underperform from sector perform and his $125 price target to $70 on reduced growth expectations, visibility and near-term leadership uncertainty. He sees a revaluation in the stock toward a market multiple.
Abramsky notes CEO Steve Jobs' unexpected medical leave raises near-term uncertainty on leadership; Jobs is widely viewed as Apple's chief innovator, dealmaker and leader, and is deeply involved in minute decisions and inextricably tied to Apple's brand.
He cuts $38.1 billion fiscal year 2009 (September) revenue estimate to $36.2 billion and $5.07 EPS to $5.00; $46 billion for fiscal year 2010 to $42.1 billion and $6.43 EPS to $5.92.
MORGAN KEEGAN CUTS PLANTRONICS TO MARKET PERFORM
Morgan Keegan analyst Tavis McCourt says Plantronics (PLT) pre-released third quarter results of $184 million revenue and $0.11-$0.12 non-GAAP EPS, well below his $207 million and $0.30 estimates.
McCourt says bluetooth headsets appear to be the main source of weakness. He notes PLT plans to reduce headcount by approximately 18% and trim spending in other areas to cut $50 million from opex in fiscal year 2010 (March).
While the cost savings are very accretive to EPS, he says the shares are trading (pre-open) at 12 times his $1.01 2009 EPS estimate. Given the uncertainty surrounding PLT's businesses (particularly consumer), he thinks this multiple could compress, and thus downgrades to market perform from outperform.
PIPER JAFFRAY CUTS RED ROBIN GOURMET BURGERS TO NEUTRAL
Red Robin Gourmet Burgers (RRGB) announced it will take a first quarter charge. Piper Jaffray analyst Nicole Miller says the company also announced a cut to 2009 marketing budget, making her prior investment thesis (which was driven by a national TV campaign) somewhat irrelevant.
Miller believes that the company's differentiation, or its strategy to grow brand awareness, is at risk. She thinks about $18 million in savings from marketing reduction offset by about 200 bps in lost same-store sales, which, in combination with the already soft consumer market, puts margins at even greater risk.
She cuts $1.72 2008 EPS view to $1.70, $1.80 for 2009 to $1.65, and $18 price target to $13; the stock was rated buy.
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