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RealNetworks (RNWK)

Standard & Poor's Equity Research reiterates sell

In a Form 8-K filed with the Securities & Exchnage Commission after the close of trading Nov. 19, digital media services and software provide RealNetworks disclosed discussions with MTV Networks about restructuring Rhapsody America and their interests in the business. Notably, said S&P equity analyst Scott Kessler on Nov. 20, RealNetworks indicated its ownership of the unit could fall below the current 51%, which Kessler thinks would adversely affect the company's operating revenues.

"Perhaps more significantly, however, we believe this news and the way it was communicated indicates Rhapsody America, one of RNWK's most visible and important franchises, continues to struggle, given the challenging economy and tough competition", wrote Kessler in a research note.

Dress Barn (DBRN)

C.L. King keeps buy; raises estimate, price target

C.L. King analyst Scott Krasik said on Nov. 20 that the apparel retailer's first-quarter non-GAAP earnings per share (EPS) of 38 cents topped his 36 cents estimate, according to a report from S&P MarketScope. Krasik noted that while company management said it wouldn't update earnings guidance until after its deal to acquire Tween Brands closes, it still raised fiscal 2010 (ending July) EPS guidance for its core businesses to $1.20-$1.30 from $1.10-$1.20.

Krasnik views this guidance as conservative, according to the S&P report. He noted that a 53rd week in the company's fiscal year will add 5 cents to EPS, and that same-store sales are running ahead of management's guidance for a gain of 2%. That, plus "clean" inventories, push his $1.23 fiscal 2010 EPS estimate up to $1.34. He also raised his $20 price target to $26.

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