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From Standard & Poor's Equity ResearchMORGAN KEEGAN REITERATES OUTPERFORM ON CRACKER BARREL
Morgan Keegan analyst Robert Derrington says Cracker Barrel Old Country Store (CBRL) force $0.81 second quarter EPS beat his $0.73 estimate on better-than-expected revenues, much lower-than-expected G&A (about $0.08 EPS).
Derrington notes the company reiterated fiscal year 2009 (July) EPS guidance of $2.65-$3.00 (vs. his $2.55), plans to complete sale leaseback of 15 stores before fiscal year end, raising $55-$60 million for debt repayment. He expects to raise his fiscal year 2009 EPS view to mid-$2.70 range from $2.55 post conference call.
He rates outperform based on the company's unique Old Country Store motif, attractive valuation, 4.5% dividend yield and other factors.
WILLIAM BLAIR UPGRADESS NALCO HOLDINGS TO OUTPERFORM FROM MARKET PERFORM
William Blair analyst Brian Drab says he's been warming up to Nalco Holdings (NLC) shares for some time, and recent talks with management give him more confidence in NLC's prospects for the next 12 months and beyond.
Drab bases the upgrade on gross margin expansion, expected strong free cash flow, European operations appearing to be on track after leadership changes, adequate access to capital, and attractive valuation.
He believes the Street consensus EPS estimate of $0.21 for first quarter 2009 is too low, largely due to what he considers to be overly conservative gross margin assumptions. He sees $0.31 for the first quarter.