Markets & Finance

S&P Picks and Pans: Dow Chemical, Tivo, Shanda, Trump


Analysts' opinions on stocks on the news Thursday

From Standard & Poor's Equity ResearchS&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF DOW CHEMICAL (DOW; 40.66):

DOW's announcement that it will raise selling prices by up to 20% is not surprising to us; virtually all chemical companies are trying to raise prices in the face of historically high energy and feedstock costs, although DOW's attempt is unusually public. The company achieved a 17% increase in prices in the first quarter over the 2007 period, offsetting a 42% climb in feedstock costs. We expect the largest increases by the industry will be in commodities and lesser amounts in specialty products. The success will be limited by slow domestic market demand and contract terms. -R. O'Reilly-CFA

S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF TIVO (TIVO; 8.09):

April-quarter $0.04, vs. $0.01, EPS meets our estimate and is $0.05 above the Street. With DirecTV (DTV; 28.02) base sharply eroding, we are wary of net 17,000 stand-alone losses, though mitigated by much lower subscriber acquisition costs. TIVO sees traction on Comcast (CMCSA; 21.99) deal, with Cox also on track. It sees core second quarter revenue down implied 2.6%-6.0%, vs. improved $3-$5 million adjusted EBITDA, $2-$4 million net loss. It sees little chance of Supreme Court hearing patent appeal on win vs. DISH (DISH; 35.19) . We see differentiation strides and keep 9 target price on price-to-sales. -T. Amobi, CPA, CFA

S&P REITERATES STRONG BUY OPINION ON ADSS OF SHANDA INTERACTIVE ENTERTAINMENT (SNDA; 30.62):

SNDA is down another 5% this morning after an analyst downgrade today, following what we consider good first quarter results and conservative second quarter guidance provided early yesterday. We believe the recent sell-off offers an enhanced entry point. We think SNDA remains a well-diversified leader in the high-growth Chinese online games category, has executed well, and is a compelling value. We also think some of SNDA's assets, including its in-game advertising unit and literature portal, have considerable unrealized value. With a p-e of 15 and PEG of 0.7, we believe SNDA is very undervalued. -S. Kessler

S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF TRUMP ENTERTAINMENT RESORTS (TRMP; 3.36):

Shares are up 15% this morning on news TRMP has agreed to sell the Trump Marina Hotel Casino for $316 million to Coastal Marina, a privately held company specializing in financing and developing resorts, hotels and casinos. While we view potential deal as favorable, since it provides more liquidity and flexibility for TRMP to implement its core strategy, we still see remaining properties challenged by a cautious consumer and a competitive environment. Upon sale, financials are likely to improve without Marina's low comparative property margin and growth. Our target price remains 4. -E. Kwon-CFA


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW

Sponsored Financial Commentaries

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus