From Standard & Poor's Equity ResearchNEEDHAM DOWNGRADES BANKRATE TO HOLD FROM BUY
Needham analyst Mark May says in the past few weeks he's grown increasingly concerned about Bankrate's (RATE) near-term outlook as coverage on hyperlink mortgage-related rate tables and quality of display/brand advertisers have remained uncharacteristically low.
May has not seen the seasonal rebound in advertiser activity typical of December and January. He thinks, while mortgage rate declines/refinancing activity has benefited site traffic, this has not translated into meaningful revenue upside, as lending standards remain tight.
With fourth quarter EPS due Thursday, he cuts $0.36 view to $0.34.
FBR CAPITAL KEEPS MARKET PERFORM ON ELECTRONIC ARTS
FBR Capital analyst Heath Terry says Electronic Arts' (ERTS) third quarter results proved to be a big miss and its outlook was dramatically lowered.
Terry notes ERTS initiated $1.00 fiscal year 2010 (March) EPS on $4.3 billion revenue forecast. With over $7 per share in cash expected by fiscal yearend, the shares are trading at less than his $0.99 fiscal year 2010 EPS estimate net of cash and interest income; he sees little downside to owning the shares.
He believes mgmt must continue to execute on cost reductions and game quality improvement to generate profitable hit titles. He keeps $20 price target and market perform rating.
CITIGROUP REITERATES SELL ON DISNEY
Analyst Jason Bazinet says Walt Disney's (DIS) $9.6 billion first quarter revenues were down 8% year-over-year, with most significant drops at Studio, Networks, Parks; $1.4 billion operating income was down 36% year-over-year with material declines at Studio, Networks, Parks.
He notes that Disney has net debt of just $8.4 billion, suggesting net debt-to-EBITDA of about 1.2 times his new 2009 EBITDA estimate. Adds, however, that share buybacks slowed to just $100 million in first quarter fiscal year 2009, about 90% below first quarter fiscal year 2008 levels.
Bazinet cuts $1.90 fiscal year 2009 (September) EPS view to $1.62, reflecting far steeper declines in DVDs and ad revenues. He lowers $20 target to $18.