Markets & Finance

Analyst Actions: Google, GameStop, Tyco Electronics


What Wall Street analysts are saying about selected stocks in the news Friday

Google (GOOG)

Credit Suisse keeps outperform opinion

Credit Suisse analyst Spencer Wang says Google's first quarter results were largely in line on revenues but significantly better than his expectations on virtually all expense categories. As a result, non-GAAP EPS of $5.16 topped his $4.68 forecast.

Despite the upside in first quarter, Wang cut his $20.50 2009 EPS view by 3.5% to $19.78 (up 1.5% year-over-year).

He says Google and search advertising are clearly not immune to the macro-environment, and he anticipates the next several quarters will remain challenging. On the plus side, he believes ongoing cost management can mitigate the earnings risk.

He has a $400 price target on the stock.

GameStop (GME)

Lazard Capital Markets keeps buy, raises price target

Shares of GameStop declined Friday after a report indicated video game sales were flat in the first quarter and fell in March. Late Thursday, market researcher NPD Group said that U.S. video game sales sank 17% to $1.43 billion in March compared with the same month last year. The drop was greater than analysts expected. For the whole quarter, sales were flat at $4.25 billion.

GameStop said Friday it still expects to earn 40 cents to 42 cents per share in the first quarter. For the full year, it expects earnings to grow 18 percent to 22 percent, which implies 2009 earnings of $2.81 to $2.90 per share. Analysts polled by Thomson Reuters expect first-quarter earnings of 41 cents per share and full-year earnings of $2.87 per share.

GameStop pointed to strong sales of new games the successful launch of Nintendo's new DSi portable game player.

In a client note, Lazard Capital Markets analyst Colin Sebastian raised his first-quarter estimates for GameStop, citing the company's outlook, his belief that the company's business is "steady despite negative headlines" and a "healthy" used video game market.

He also kept his buy rating and raised price target for the stock by $3 to $34, citing ongoing healthy profit growth and GameStop's relative stability in sales despite a difficult consumer environment.

Tyco Electronics (TEL)

RBC Capital keeps outperform opinion

RBC Capital Analyst Amit Daryanani says Tyco Electronics' second quarter sales are anticipated to be $2.5 billion, above the Street's $2.4 billion forecast.

Daryanani notes TEL also said it plans to divest Wireless Systems business, whereby it will receive $675 million in cash. The analyst thinks the divestiture adds a datapoint to allay investor concerns regarding leverage.

He is leaving $0.38 fiscal year 2009 (September) and $0.77 fiscal year 2010 EPS estimates unchanged until TEL's EPS call Apr. 29 until there further clarity on guidance and EPS impact of the deal. He expects EPS impact from deal will be minimal, especially if TEL decides to use cash proceeds to lower debt levels.


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