Markets & Finance

S&P Picks and Pans: eBay, Yahoo, Teva


Analyst opinions on stocks making headlines Monday

S&P REITERATES STRONG BUY OPINION ON SHARES OF EBAY INC.

From Standard & Poor's Equity Research

EBAY; $34.51

Based on our assessments, and with less than a full day left before Christmas, we believe eBay had a solid to strong holiday shopping season, aided by everything from a greater focus on deals/value, to recent winter storms in the midwest and northeast, to high gasoline prices. We also believe that the company greatly improved its flagship website since last year, and that the "user experience" will be a priority in 2008. We see annual revenue growth above 20% through 2009, yet EBAY trades at less than 20X our 2008 EPS estimate. We see the stock as a compelling value. /S. Kessler

S&P REITERATES HOLD OPINION ON SHARES OF YAHOO INC.

YHOO; $24.06

In our view, Yahoo has had a difficult year, reflecting challenged fundamentals, significant management turnover, and inconsistent and often disappointing execution. We have been encouraged by CEO Jerry Yang's emphasis on appropriate prioritization and technology investment. However, comScore recently indicated YHOO continued to lose search market share in November, more so than any of its primary competitors. We think that even though Yahoo has an appealing brand and attractive businesses, and despite a notable pullback since late October, the shares are fairly valued. /S. Kessler

S&P REITERATES STRONG BUY OPINION ON ADRS OF TEVA PHARMACEUTICAL INDUSTRIES

TEVA; $46.89

Teva launched generic Protonix for acid reflux, and as one of the first firms to file for the generic version, received 180 days of sales exclusivity. U.S. sales of branded Protonix in the 12 months ended Sept. 30 were $2.5 billion, based on IMS Health data. Teva raised its 2007 earnings per ADR outlook to $2.34-$2.36 from $2.20-$2.30, citing this launch and other products. We raise our 2007 earnings estimate 4 cents to $2.36, but keep our 2008 view of $2.70 since talks with Wyeth (WYE), which makes branded Protonix, are underway and Teva halted additional shipments for 30 days. /P. Seligman


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