) shares fell Tuesday after the fast-food restaurant chain cut its fourth-quarter outlook. However, Lehman Brothers upgraded the stock to equal-weight from underweight.
Analyst Mitchell Speiser says while there's no turnaround in sight, management changes and deep resources should limit the underperformance. His upgrade is based on management changes, $3 billion in operating cash flow, and a p-e under 12 times. He applauds removing the full-sized Big'n Tasty and McChicken offerings off the $1 menu and a lower capex.
Speiser cut his EPS estimate for 2002 from $1.40 to $1.34 due to fourth-quarter guidance that's sharply below the Street's view. He believes 2003 will be another transition year; he cut his 2003 EPS estimate to $1.33.