Stock Picks: McAfee, Estee Lauder, Harman

Plus a Wall Street analyst opinion on Stanley Inc.

McAfee (MFE)

R.W. Baird upgrades to outperform from neutral; raises price target

R.W. Baird analyst Steven Ashley said on Oct. 30 that McAfee reported in-line third-quarter revenue of $485 million and earnings per share (EPS) of 62 cents compared to consensus estimates of $486 million and 61 cents and his forecast of $489 million and 62 cents. Ashley expects investors to come away from the third quarter with mixed emotions, which he views as an opportunity. He noted concerns might include: 1) whether PC OEM deals really provide adequate return on investment; 2) challenges in closing very large deals; and 3) Symantec's (SYMC) improved execution in its consumer business.

On the positive side, Ashley notes that: 1) The company's OEM deal with Dell (DELL) was extended two years; and 2) Symantec's fourth quarter revenue guidance was above the Wall Street consensus. He raised his $45 price target to $50.

Estee Lauder (EL)

Wedbush Morgan reiterates outperform; raises estimates, price target

Wedbush analyst Rommel Dionisio said on Oct. 30 that Estee Lauder's $1.852 billion first-quarter revenue was relatively in line with his estimates, but the company's adjusted EPS of 85 cents far exceeded his recently raised 40-cent view, and management's revised 23 cents-30 cents estimate. Dionisio tied the company's outperformance to much lower-than-expected SG&A spending in the face of a challenging global economy. He noted that the Asia Pacific and travel retail operations were particular bright spots in the first quarter.

The analyst raised his $1.80 fiscal 2010 (ending June) EPS estimate to $2.07, and hi $2.03 fiscal 2011 forecast to $2.07, after Estee Lauder lifted its fiscal 2010 view to $1.95-$2.10 from $1.55-$1.70. He raised his $48 price target to $50.

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