From Standard & Poor's Equity ResearchTHINKEQUITY CUTS GOOGLE TO SOURCE OF FUNDS FROM ACCUMULATE
ThinkEquity analyst William Morrison says Google (GOOG) shares have risen 27% in the past three weeks (vs. S&P 500's 3% rise), reflecting a second half 2009 recovery he thinks is unlikely to materialize.
Morrison says his research suggests paid clicks and costs-per-click have continued to deteriorate in the first half. He now expects 3.8% growth in 2009 net revenue (0.6% rise in gross margin), vs. Street consensus of 10.3%. He also now sees $19.85 2009 pro-forma EPS, vs. Street consensus of $21.20.
He believes GOOG stock will fall into the $300 range as investors come around to his point of view.
MORGAN KEEGAN KEEPS OUTPERFORM ON CEC ENTERTAINMENT
Morgan Keegan analyst Robert Derrington says CEC Entertainment (CEC) fourth quarter EPS of $0.11 missed his $0.15 estimate on lower-than-expected same-store sales and weaker-than-expected restaurant margin from higher self-insured reserves, offset somewhat by lower general and administrative expenses.
He notes the company cut its 2009 EPS view to $2.53-$2.65 from $2.72-$2.78. As such, he expects to cut his $2.74 2009 EPS view to about $2.60.
But despite the tough economic environment, Derrington expects CEC's free cash flow to remain substantial, fueling either debt retirement or its ongoing repurchase plan.