) to hold from buy.
Analyst Caroline Levy cites distributor conversations suggesting continuing sales weakness in the U.S., and a substantial increase in marketing and promotional spending in 2003. With the stock well up from recent lows, Levy says she thinks a high projected cost savings in the U.S. and United Kingdom have largely been discounted.
Levy maintains her $4.65 2002 earnings per share estimate, but trimmed the $5.10 2003 earnings per share estimate to $5.00, reflecting higher forecasted marketing and promotional spending in the U.S., as well as lower projected 2003 U.S. volume (sales-to-retail) and lower pricing growth.
She thinks volume and pricing in the United Kingdom will be challenged due to tough comps-store sales. She cut her $82 target to $68.