Analyst Actions: Wachovia, Macy's, Cemex

From Standard & Poor's Equity Research

SANDLER DOWNGRADES WACHOVIA, SAYS NEWS RELATIVELY POSITIVE

Sandler analyst Kevin Fitzsimmons says Citigroup (C) announced it has ended talks with Wells Fargo (WFC) related to the deal involving Wachovia (WB); he notes WFC said proceeding with earlier planned all-stock purchase for all of WB on original terms.

Fitzsimmons thinks this a relatively positive outcome for WB shareholders as it provides much needed clarity after brewing legal/regulatory fight that could've left WB's fate unresolved for a while.

He adjusts WB price target to $5 and downgrades the stock to sell from hold, to be in alignment with his target and rating for WFC. He sees WB trading up toward the implied deal price at the open.

CREDIT SUISSE CUTS ESTIMATES FOR MACY'S

Credit Suisse analyst Michael Exstein says that Macy's (M) final mall anchor plans to formally update its quarter to date (QTD) performance.

While he adjusted his estimates to account for no further share repurchase activity, as well as his best estimates for sales, he thinks he was too optimistic. Exstein notes that Macy's reported 5.8% decline in same-store sales (SSS) quarter-to-date; he now sees 6% drop in SSS and widens his $0.13 third quarter loss estimate to $0.20 loss.

He cuts $1.69 fiscal year 2009 (January) EPS estimate to $1.41 as expects Macy's fiscal year 2009 EPS to fall in middle of its $1.30-$1.50 range. He also cuts $1.72 fiscal year 2010 EPS estimate to $1.45. He keeps a neutral opinion.

UBS FINANCIAL CUTS CEMEX TO SELL FROM NEUTRAL

UBS analyst Gordon Lee says Cemex's (CX) announcement underscores how it's very much exposed to the volatility now taking place. He does not see an operating trend recovery until 2010 at the earliest.

Lee believes CX's debt is likely to be downgraded. He notes the company faces over $6 billion in maturities by yearend 2009 and thinks potential EPS volatility due to the company's hedge book likely to raise its debt costs.

He sees meaningful upside to CX shares over the long run, but says there is too much short- and meduim-term uncertainty needing to be clarified. He cuts $36 price target to $8.