Stock Picks: eBay, 3M, Amgen

Plus Wall Street analyst opinions on F5 Networks and TriQuint Semiconductor

EBay (EBAY)

Deutsche Bank maintains sell; raises estimate, price target

Deutsche Bank analyst Jeetil Patel said on Oct. 22 that eBay's third quarter earnings per share (EPS) of 38 cents (as adjusted), released after the close of trading Oct. 21, beat Wall Street expectations for EPS of 37 cents, aided by a weaker U.S. dollar and contributions from its Gmarket business. And yet, noted Patel, the company's core EPS looked in line or below forecasts.

The analyst said that while ad rates have been low year-to-date, ad pricing is rising while e-commerce spending hasn't picked up much. Patel said both of these industry dynamics incrementally may pressure growth and margins at eBay. Longer term, Patel needs to see greater consumer loyalty and marketing efficiencies to become more constructive on eBay's business.

Patel raised a $1.50 2009 pro forma EPS estimate on eBay to $1.53, and a $15 price target to $16.

3M (MMM)

Standard & Poor's Equity Research maintains buy; raises estimates, price target

Standard & Poor's equity analyst Mathew Christy said that as adjusted for special items, 3M reported third-quarter EPS of $1.37, vs. $1.41 EPS one year earlier, 21 cents better than his estimate as revenue was better than expected and fell just 5.6%. Christy believes the positive results reflect the company's early-cycle business model, noting an 8% sequential gain in revenue and much improved organic volume results in the third quarter vs. the second quarter.

Based on the better third-quarter results, along with his higher sales and margin forecasts on the expectation of continued volume gains, Christy raised his 2009 EPS estimate by 26 cents to $4.60, and his 2010 forecast by 28 cents to $4.99; he hiked his price target $2 to $86.

Amgen (AMGN)

Citigroup maintains hold; cuts estimate, price target

Citigroup analyst Yaron Werber said on Oct. 22 that Amgen's third-quarter results showed strong expense cuts and growing EPS. But he noted that further Aranesp safety issues in pre-dialysis and the FDA's request for new data on Prolia's safety in cancer raise new concerns. Werber said the FDA rejection of Prolia in treatment of bone loss in prostate cancer despite a panel recommendation raises concerns the agency is taking a tough stance on the drug's theoretical potential to cause tumor growth; this, plus an upcoming CMS panel on Aranesp reimbursement will keep the stock under pressure.

Werber cut a $5.24 2010 EPS estimate to $5.10, and a $68 price target to $64.

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