Analyst Picks and Pans: Amgen, Deutsche Bank, Lennar

What Wall Street analysts are saying about selected stocks in the news Tuesday

Amgen (AMGN)

Oppenheimer raises target price, keeps outperform

Oppenheimer analyst Bret Holley said on July 28 that Amgen's $1.29 second-quarter non-GAAP earnings per share (EPS) beat his, and Wall Street's consensus, estimate of $1.16 on better-than-expected sales; the company lifted its 2009 EPS outlook to $4.80-4.95 from $4.55-4.75. Holley also noted Amgen also announced a major partnership with GlaxoSmithKline (GSK) for commercialization outside the U.S. of denosumab (dmab) in postmenopausal osteoporosis.

The analyst believes the second-quarter results show Amgen's core business has stabilized. He expects positive pipeline catalysts in the second half of 2009, notably U.S. dmab approval; and Phase III trial results for dmab, and Vectibix.

Holley would buy Amgen into strength on the second-quarter results and GSK dmab partnership. He raised his $66 price target to $72.

Deutsche Bank (DB)

FBR Capital downgrades to market perform from outperform

FBR Capital analyst Jonathan Tyce said on July 28 that Deutsche Bank reported second-quarter net income of €1.092 billion, ahead of his forecast and the Wall Street consensus estimate. More importantly, however, Tyce said that a disappointing debt sales and trading revenue figure (and no further upgrades to the consensus) suggests to him that the company has no more earnings upgrade momentum for the remainder of 2009 and, as such, will not outperform any further.

Thematically, Tyce believes that the outperformance of the investment banks and this earnings upgrade cycle have also ended, at least for the next few quarters.

Lennar (LEN)

Citigroup downgrades to hold from buy

Citigroup analyst Josh Levin said on July 28 he is downgrading Lennar on valuation. Levin noted that since May 15, Lennar is up about 35% vs. its peer group's 22% rise, and the broader market's roughly 11% advance. The analyst said that over the last two months, the fundamentals of Lennar's story have continued to improve. In particular, he noted that Lennar turned in a very strong quarter that demonstrated its ability to sell spec inventory while maintaining margin.

Levin thinks Lennar remains one of the more misunderstood stories in the homebuilding space. He would look to reload at a more compelling valuation. He has a $12 price target.

Business Exchange

Track and share business topics across the Web.