In a note, Leggate said that in the near term, production for the second-largest U.S. energy company looks "flat"; the improving margin trend vs. the company's peers is "largely done", while "elevated" capital spending over the next few years would "challenge" relative returns.
"Oil leverage differentiates CVX," the analyst wrote, "but only the conviction that prices move higher drives upside vs. peers and is reflected in [the stock's] relative performance within the [oil majors] group".
Regarding Chevron's refining and marketing business, Leggate said reducing refining exposure "is likely welcomed ... [c]urrent downstream weakness is probably priced in [to the stock] while any reward for paring exposure at the low of the cycle may be limited".
The analyst forecast EPS of $8.84 for 2010, $9.13 for 2011, and $8.69 for 2012.
"Absolute value and an attractive dividend position CVX as a staple in energy portfolios for those with a long-term view," Leggate said. "[N]ear term, we believe the value proposition has shifted to Exxon Mobil Corp. (XOM)," which he rates buy.
Leggate lowered his price target on Chevron shares to $90 from $95.
NYSE Euronext: Raymond James analyst Patrick O'Shaughnessy maintained his outperform rating on shares of NYSE Euronext (NYX) on Mar. 10.
In a note, O'Shaughnessy said he was raising earnings per share (EPS) estimates on the owner of the worldâs largest stock exchange to reflect stronger-than-expected derivatives trading in Europe. His new 2010 and 2011 EPS estimates are $2.34 and $2.67, up from $2.24 and $2.57, respectively.
Based on quarter-to-date trends, the analyst said he was also raising his expectations on U.S. equities volumes, but lowering his forecast for European equities volumes.
As for the company's Mar. 10 announcement that it completed the sale of a minority stake in its U.S. futures exchange, NYSE Liffe, to six banks and brokers including Citadel Investment Group LLC and Goldman Sachs Group Inc. (GS), the analyst said that "[w]hile we continue to be skeptical that NYSE Liffe U.S. will be able to compete effectively with CME Group [CME], we acknowledge the downside of the venture is relatively limited."
"With a combination of top-line revenue growth opportunities and continued cost-cutting, NYSE Euronext has the opportunity for strong earnings growth in 2010 and 2011 and is currently our top exchange investment recommendation," O'Shaughnessy said.
The analyst has a $33 price target on the shares.
In a posting on the S&P MarketScope service, Driscoll noted that the U.S. clothing retailer reported January-quarter EPS of 61 cents, vs. a loss of 22 cents per share one year earlier, on a 17% same-store sales gain; Driscoll had estimated 40 cents EPS on a 10% same-store sales rise. Driscoll said the results came as a "strong" product offering, controlled inventory and reduced markdowns combined to boost J. Crew's gross margin by 1600 basis points.
The analyst raised her fiscal 2011 (ending January) EPS estimate to $2.40 from $2.14 and established a fiscal 2012 forecast at $2.68. She reiterated her $49 price target on the shares.
Analogic Corp.: Needham & Co. analyst Dalton Chandler raised his rating on shares of Analogic Corp. (ALOG) to buy from hold on Mar. 10.
In a note, Chandler said second-quarter results posted by the the maker of medical-technology and airport-security devices on Mar. 9 easily beat his estimates for revenue ($103.3 million vs. his expectation of $100.7 million) and EPS (20 cents vs. his estimate of 12 cents) as shipment of security products resumed a quarter ahead of his expectations, and as a combination of higher revenues and the impact of recent cost cuts lifted margins.
Chandler said that it appears that Analogic's computed tomography (CT) and magnetic resonance imaging (MRI) business has stabilized, and could resume modest near-term growth. He also said the rebound in he company's security segment appears "sustainable".
The analyst raised his fiscal 2010 (ending July) EPS estimate to $1.16 from 65 cents, and his fiscal 2011 forecast to $1.95 from $1.87.
Chandler set a $50 price target on the stock.