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From Standard & Poor's Equity ResearchJP MORGAN CUTS ESTIMATES, KEEPS NEUTRAL ON APPLE
JPMorgan analyst Mark Moskowitz says Apple (AAPL) shares stand to take a breather. After posting a strong quarter, says AAPL lowered its fiscal year 2009 (September) gross margin expectations to approximately 30%, which could stun the bulls, particularly as no corresponding revenue bogey was offered.
Moskowitz believes AAPL could be resetting expectations ahead of the iPhone transition to 70 countries, which could involve temporary hiccups. Reading between the tea leaves, he also thinks that AAPL's commentary on margins could suggest more opportunistic pricing configurations on upcoming product launches.
He cuts $5.19 fiscal year 2008 EPS estimate to $5.14 and $6.06 for fiscal year 2009 to $5.35.
NEEDHAM CUTS SANDISK TO HOLD FROM BUY
Needham analyst Y. Edwin Mok says, while expectations were low, SanDisk (SNDK) surprised the Street on the downside with second quarter non-GAAP losses and guidance for about 0% product margins. He says it appears SNDK's ballooned inventory will prevent any meaningful margins rebound for several quarters, even as SNDK delays production ramp and trims spending.
Mok believes, while the stock looks cheap, concerns over weaker consumer spending and several quarters of losses will limit any upward movement for the share price. Thus, he considers a hold rating as more appropriate, until he sees clearer signs of improvement.
He slashes $1.50 2008 pro forma EPS estimate to $0.20 loss and $1.75 2009 EPS to $0.16 loss.
JP MORGAN DOWNGRADES ASSURED GUARANTY
JPMorgan analyst Andrew Wessel says he is downgrading Assured Guaranty (AGO) to neutral from overweight, removing it from Analysts' Focus List, as Moody's has placed the company's insurance financial strength (IFS) rating under review for possible downgrade.
Although Wessel views commentary from Moody's as extremely vague, he feels the rating agency is taking ultra-conservative stance given its sustained misjudgment of larger and more troubled bond insurers over the last 12 months. He assumes Moody's will drop AGO's IFS rating to Aa2, and he no longer believes AGO will have significant insured production growth through 2009.
He cuts $2.10 2008 EPS estimate to $2.00 and $3.90 for 2009 to $2.50.