S&P Stock Picks and Pans: McDonald's, AIG, Toyota, Cablevision

Analyst opinions on stocks making headlines in Thursday's market

From Standard & Poor's Equity Research

S&P REITERATES BUY OPINION ON SHARES OF MCDONALD'S

MCD; $59.36

April systemwide comp-store sales increased 5.0%, while U.S. comps rose 2.0%. Year-to-date, systemwide and U.S. comps are up 6.8% and 2.7%, both above our full-year forecast of 5%-6% systemwide and 2.0% in the U.S. Systemwide sales in April rose 6.5% on a constant currency basis. Year-to-date sales are up 8.2% systemwide, well ahead of our full year forecast of 5.5%, while U.S. sales are up 3.5%, a bit below our 4.0% forecast. With positive exception of APMEA region's string of double-digit sales gains since Q4 '06 intact, results about as expected. Our target price remains

$66. /M. Basham

S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF AMERICAN INTERNATIONAL GROUP

AIG; $45.08

Ahead of Q1 results, set to be released after market close today, we are cutting our Q1 operating EPS estimate of $1.22 to an operating loss of $1.10. We are also reducing our 2008 operating EPS forecast to $2.50 from $4.75. We see AIG's above-average, compared with peers, exposure to the housing/mortgage market pressuring results, and we would not rule out a management shake-up or restructuring. Our $47 12-month target price assumes the shares (whose risk profile we rank as "high") trade in a narrow range until more visiblity emerges. We would not add to positions. /C. Seifert

S&P DOWNGRADES OPINION ON ADSS OF TOYOTA MOTORS TO HOLD FROM BUY

TM; $101.27

Mar-Q net income of JPY 317 billion vs. JPY 400B is below our JPY 446B estimate. Largely reflecting currency translation, amid a stronger yen and weakening U.S. market, we see sales for FY 09 (Mar.) falling 4% to JPY 25.25 trillion. We are also reducing our FY 09 earnings per ADS projection by $1.82 to $8.29, based a 104.8 JPY/$1 rate. We have a favorable view of TM's long-term growth prospects and balance sheet strength, and see rising dividends. But we lower our 12-month target price by $13 to $108 on revised P/E analysis, although we would hold TM for total return potential. /E. Levy, CFA

S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF NASDAQ OMX GROUP

NDAQ; $39.14

Excluding one-time gains, NDAQ posts Q1 operating EPS of $0.48, vs. $0.14, $0.01 below our estimate. Revenues on a comparable basis, which includes results of recently acquired OMX, rose 29%. We note that NDAQ is benefitting from volatile markets, as reflected by record trading volume in the months of January and March. However, based on recent stabilization of the markets, we are wary about revenue growth keeping up at the recent pace. We maintain our '08 EPS forecast of $1.97 but lower our target price by $2 to $46, 23.4X that estimate, a discount to peers. /S. Plesser

S&P MAINTAINS SELL OPINION ON SHARES OF CABLEVISION SYSTEMS

CVC; $23.74

Before an estimated $0.24 net one-time charge (after tax benefit), Q1 loss from continuing operations is $0.13 vs. $0.11 loss, shy of S&P and Street estimates of $0.02 EPS. Overall unit growth seems in line, with somewhat encouraging 2,000 basic subscriber growth masking softer-than-expected total net adds of 195,000 digital, data and phone units, possibly on stiffer competition. We note somewhat mixed results for Rainbow cable networks, Madison Square Garden. CVC also sets deal to acquire Sundance Channel for $496M, payable in some 12.7M shares of GE (GE 32.59) held by CVC. /T. Amobi, CPA, CFA

05/08/2008- 9:15am S&P MAINTAINS HOLD OPINION ON DEUTSCHE TELEKOM ADSS

DT; $17.59

DT's Q1 revenue decline of 3% came in below our forecast, while flat EBITDA was in line. On the positive side, cost cutting in German operations and margin expansion and customer growth in the US were encouraging. However, German wireline and wireless revenues were weaker, failing to deliver the turnaround we expected as peers highlighted a recent increase in German wireless spending. We maintain our '08 revenue growth forecast of 1.6% combined with slight margin contraction. We leave our 12-month target price at $21 based on our DCF analysis, and see risks of M&A activity. /C. Perea

S&P REITERATES BUY RECOMMENDATION ON SHARES OF ALLIANT TECHSYSTEMS

ATK; $111.43

ATK posts Mar-Q EPS of $1.83 vs. $1.57, $0.13 above our estimate on a 12% sales rise, as operating margins rise 210 bps to 10.6%. Full FY 08 (Mar,) EPS rose 21% to $6.43 and free cash flow per share was $8.00, vs. a prior year deficit, a strong showing in our view. FY 08 orders were $6.5B, for a book-to-bill of 1.59X. We believe strong ammunition sales, steady business with NASA, and ATK's expansion in the commercial space will continue to drive results, and we raise our FY 09 EPS forecast by $0.06 to $7.36 and set FY 10's at $8.30. We keep our 12-month target price at $130. /R. Tortoriello