From Standard & Poor's Equity ResearchBristol-Myers Squibb (BMY
) : Ups to 3 STARS (hold) from 2 STARS (sell)
Analyst: Herman Saftlas
An injunction blocks Apotex from selling generic Plavix, pending the resolution of patent litigation. But the judge also ruled that shipped product need not be recalled. Our 2006 earnings per share (EPS) estimate is unchanged, since we think Bristol-Myers Squibb's 2nd half results will be hurt by generics already in inventory channels. But we are raising 2007's by 25 cents, to $1.15, since we now think Bristol-Myers Squibb will prevail in patent litigation starting 01/07 (prior story saw benefits starting then). We also think Bristol-Myers Squibb has takeover potential. We are raising our 12-month target price by $8 to $25.Mediacom Communications (MCCC
) : Cuts to 1 STAR (strong sell) from 3 STARS (hold)
Analyst: Tuna Amobi, CPA and CFA
Shares are up some 19% in last two months, narrowing what we see as deserved discount to peers based on ratios of enterprise value, to earnings before interest taxes depreciation and amortization (EBITDA) and per subscriber. Mediacom Communications slightly raised its 2006 view after a lackluster second quarter, we think on digital phone rollout. Our 12-month target price drops 50 cents to $6, since we think the small-market cable operator is vulnerable to DBS and telco competition, its recent gains in some metrics have been inconsistent, and its strategy on wireless bundling seems undefined. Also, despite a tame 2006 hurricane season, we are wary after two years of major losses. Broadcom (BRCM
) : Reiterates 1 STAR (strong sell)
Analyst: David Kaplan
A judge dismissed an antitrust suit filed by Broadcom, that involves allegations that Qualcomm (QCOM
) was not abiding by its agreement to license its patents on fair, reasonable, and nondiscriminatory terms, when it used discounts on royalties to improperly benefit Qualcomm's chip business. Broadcom said the decision did not indicate that Qualcomm's conduct was lawful. Broadcom is evaluating its next steps, which could include moving for reconsideration, appealing the decision, or filing an amended complaint. Our target price of $19 remains unchanged.Panera Bread (PNRA
): Upgrades to 4 STARS (buy) from 3 STARS (hold)
Analyst: Dennis Milton
Panera shares have fallen more than 30% from an intermediate high reached in March, 2006, we believe in reaction to decelerating same-store sales growth and investor fears related to gas prices and the overall economy. We are lowering our 12-month target price by $5 to $62 to reflect these concerns. At 26 times our 2006 EPS estimate of $1.97, the shares remain at a significant premium to its peers. However, they are at the low end of Panwera's historical p-e range, and we believe this valuation is attractive, given what we view as very strong growth prospects for the Panera Bread concept.
Teck Cominco (TCK
): Initiates coverage with 3 STARS (hold)
Analyst: Leo Larkin
Teck is the world's largest producer of zinc. It also produces metallurgical coal and copper. We project EPS of $9.55 in 2006 and $8.50 in 2007, as we believe the price of copper and zinc will decline from 2006 levels, and we see coal prices reaching a plateau. We view Teck as a beneficiary of consolidation of the global mining industry and a secular increase in base metals demand. Given our view that 2006 could be a peak EPS year, we think Teck's p-e in 2007 will be at the low end of its historical range. On our projected p-e of 8.9 times, our 12 month target price is $76.
Vimpel Communications (VIP
) : Reiterates 3 STARS (hold)
Analyst: Kenneth Leon, CPA and Ari Bensinger
Before special items, second quarter earnings per ADS of 96 cents vs. 78 cents are above our 86 cents estimate on strong sales growth and well-curbed operating expenses. Net subscribers rose by 2.8 million, above our forecast. We are particularly impressed with 14% sequential improvement in average revenue per user, which reverses a negative trend of sequential declines. We expect VimpelCom to continue to benefit from what we see as underpenetrated markets in Russia, Kazakhstan, and the Ukraine. Reflecting revised relative analysis and an improved outlook, we are raising our 12-month target price by $5 to $57.