Analyst Actions: Alcoa, Hartford Financial, Agilent

From Standard & Poor's Equity Research

UBS FINANCIAL DONWGRADES ALCOA TO NEUTRAL FROM BUY

UBS Financial analyst Brian MacArthur says that aluminum industry fundamentals are challenged and he sees 2009 aluminum price of US$0.75/lb.

He says 55% of Alcoa's (AA) smelting assets are based in the U.S.; as the U.S. dollar strengthens the economics of these assets deteriorate considerably in the global context. He notes that Alcoa recently said it is curtailing 350,000 metric tons a year of aluminum production; the company curtailed a total of 615,000 metric tons a year, or 15% of annualized production since September.

MacArthur cuts $0.17 2009 EPS estimate to $0.06, $0.88 for 2010 to $0.79. He cuts $13 price target to $11.50.

CITIGROUP REITERATES BUY ON HARTFORD FINANCIAL

Citigroup analyst Joshua Shanker says Hartford Financial Group (HIG) shares are down 86% year-to-date and 69% quarter-to-date, with the price seesawing between $10-$20 this month.

Shanker thinks its valuation is arbitrary in face of variable annuity fears. He believes the current stock price is confusing the possibility of a downgrade in financial strength with bankruptcy. He says the company has a strong property and casualty (P&C) business.

He believes HIG has many options, including raising capital, rallying with the market, being acquired, and selling P&C business. He thinks the bear case is already accounted for in the stock price. He has a $21 price target on the stock.

NEEDHAM DOWNGRADES AGILENT TO HOLD FROM BUY

On Friday, Agilent Technologies (A) posted $0.62, vs. $0.46 a year ago, fourth quarte adjusted EPS and forecast $1.34-$1.39 billion first quarter revenues and adjusted EPS of $0.34-$0.38.

Needham analyst John Harmon says the company's fourth quarter revenue is below the low end of guidance. He says electronic measurement unit sales are shrinking, and notes continued weakening in computer and semiconductor-related markets.

He notes that first quarter revenue guidance is well below consensus. He sees risk that flat fiscal year 2009 (October) revenue guidance could be slightly optimistic. He cuts $6.15 billion fiscal year 2009 revenue on $2.18 EPS estimates to $5.65 billion on $1.92.

Harmon thinks the shares are fairly valued.