Zimmer Holdings is another one of our stocks that recently beat earnings estimates AND guided higher.
Now, take a look at the chart. The stock is setting up a nice cup and handle formation. The heavy resistance is in the $79 area. The stock closed up 1.94 today to $77.91. Another day like today might do it.
Monday, February 25, 2008
What to look for in the morning....
AutoZone (AZO), CBS Corp. (CBS), HJ Heinz (HNZ), Home Depot (HD), and Target (TGT) are all scheduled to announce their latest results tomorrow morning before the opening bell.
The January Producer Price Index kicks off tomorrow's economic readings (8:30 AM ET). The consensus is calling for an increase of 0.4% in the index.
Once trading is underway, market participants will be looking for the January New Home Sales report (10:00 AM ET). Existing home sales for January, which were announced this morning, posted a less severe downturn than economists expected.
Federal Reserve Governor Kohn speaks on U.S. economy and monetary policy in NC (12:15 PM ET).
The January Producer Price Index kicks off tomorrow's economic readings (8:30 AM ET). The consensus is calling for an increase of 0.4% in the index.
Once trading is underway, market participants will be looking for the January New Home Sales report (10:00 AM ET). Existing home sales for January, which were announced this morning, posted a less severe downturn than economists expected.
Federal Reserve Governor Kohn speaks on U.S. economy and monetary policy in NC (12:15 PM ET).
Nice Day for the Markets...
U.S. Markets:
Dow +189.20 (+1.53%)
Nasdaq +24.13 (+1.05%)
S&P 500 +18.69 (+1.38%)
News That Moved the Market:
Disaster Averted, For Now. The markets were boosted Monday on news that ratings agency S&P took MBIA (MBI, +19.7%) off CreditWatch and assigned it a negative outlook. In addition, S&P affirmed its AAA rating on Ambac (ABK, +15.9%), but added the company was still on CreditWatch. The announcement by no means qualifies as a signal that all is now well, but was more of a sign that S&P was giving the bond insurers more time to sure up funds and a downgrade is not as imminent as some fear. Downgrades can still occur, but as long as these companies keep their AAA rating, banks do not have to writedown the securities backed by these companies on their books.
Better Than Expected Housing Data. Existing home sales dropped 0.4% to an annual rate of 4.89 million, which was a 9-year low, but ahead of the 1.8% drop economists were expecting. Inventories of unsold homes increased to 10.3 months, still an enormous figure, but the better than expected data brought some hope that perhaps a bottom is nearing. Before the bell, Lowe's (LOW, +3.8%) reported a 33% decrease in net income and slashed its outlook, but the positive housing data allowed housing related companies to turn around and rally.
Getty Images Agrees to $2.1 Billion Buyout. Getty Images (GYI, +29.5%) agreed to be acquired by private-equity firm Hellman & Friedman LLC for $34/share. The purchase price represents a 55% premium from where Getty was trading when it announced it would be seeking strategic alternatives and could put itself up for sale on January 18th.
EA Makes Play For Take-Two. Take-Two Interactive (TTWO, +55.0%) rejected Electronic Arts' (EA, -5.2%) $26/share buyout bid, saying the bid undervalued the company. The $2 billion bid is not expected to be the last by EA, and the new price should come before April 29th, when Take-Two releases its newest installment of Grand Theft Auto.
Quick Tics:
--Visa could raise as much as $17 billion in its IPO.
--The Wall Street Journal reported Goldman Sach's (GS,-0.2%) could post its smallest quarterly profit in three years in March.
Tomorrow Notable Earnings:
CBS (CBS) Before Open
Home Depot Inc (HD) Before Open
Macy's, Inc. (M) Before Open
Target Corporation (TGT) Before Open
Office Depot Inc. (ODP) Before Open
DreamWorks Animation SKG, Inc. (DWA) After Close
Economic Events:
8:30 AM: PPI
10:00 AM: Consumer Confidence
Dow +189.20 (+1.53%)
Nasdaq +24.13 (+1.05%)
S&P 500 +18.69 (+1.38%)
News That Moved the Market:
Disaster Averted, For Now. The markets were boosted Monday on news that ratings agency S&P took MBIA (MBI, +19.7%) off CreditWatch and assigned it a negative outlook. In addition, S&P affirmed its AAA rating on Ambac (ABK, +15.9%), but added the company was still on CreditWatch. The announcement by no means qualifies as a signal that all is now well, but was more of a sign that S&P was giving the bond insurers more time to sure up funds and a downgrade is not as imminent as some fear. Downgrades can still occur, but as long as these companies keep their AAA rating, banks do not have to writedown the securities backed by these companies on their books.
Better Than Expected Housing Data. Existing home sales dropped 0.4% to an annual rate of 4.89 million, which was a 9-year low, but ahead of the 1.8% drop economists were expecting. Inventories of unsold homes increased to 10.3 months, still an enormous figure, but the better than expected data brought some hope that perhaps a bottom is nearing. Before the bell, Lowe's (LOW, +3.8%) reported a 33% decrease in net income and slashed its outlook, but the positive housing data allowed housing related companies to turn around and rally.
Getty Images Agrees to $2.1 Billion Buyout. Getty Images (GYI, +29.5%) agreed to be acquired by private-equity firm Hellman & Friedman LLC for $34/share. The purchase price represents a 55% premium from where Getty was trading when it announced it would be seeking strategic alternatives and could put itself up for sale on January 18th.
EA Makes Play For Take-Two. Take-Two Interactive (TTWO, +55.0%) rejected Electronic Arts' (EA, -5.2%) $26/share buyout bid, saying the bid undervalued the company. The $2 billion bid is not expected to be the last by EA, and the new price should come before April 29th, when Take-Two releases its newest installment of Grand Theft Auto.
Quick Tics:
--Visa could raise as much as $17 billion in its IPO.
--The Wall Street Journal reported Goldman Sach's (GS,-0.2%) could post its smallest quarterly profit in three years in March.
Tomorrow Notable Earnings:
CBS (CBS) Before Open
Home Depot Inc (HD) Before Open
Macy's, Inc. (M) Before Open
Target Corporation (TGT) Before Open
Office Depot Inc. (ODP) Before Open
DreamWorks Animation SKG, Inc. (DWA) After Close
Economic Events:
8:30 AM: PPI
10:00 AM: Consumer Confidence
S&P Affirms Ratings on MBIA and AMBAC...
Standard & Poor's is maintaining its top rating on the nation's two biggest bond insurers, MBIA and Ambac. MBIA shares rise 18% and Ambac gains 12%.
The market has rallied on this news.
The market has rallied on this news.
Ag Stocks on Fire ....Again....
Potash (POT) +6.85 to $163.90
Monsanto +4.64 to $121.31
Mosaic (MOS) +6.42 to $115.37
Monsanto +4.64 to $121.31
Mosaic (MOS) +6.42 to $115.37
Breakout Alert: Terex (TEX)
Check out the chart on Terex (TEX). The stock is breaking out of three month base today. It had resistance at $68, it is currently up 1.00 to $68.57.
Terex Corporation manufactures a broad range of equipment for use in various industries, including the construction, infrastructure, quarrying, surface mining, shipping, transportation, refining and utility industries.
Last week they beat earnings estimates and guided higher....
Terex Corporation manufactures a broad range of equipment for use in various industries, including the construction, infrastructure, quarrying, surface mining, shipping, transportation, refining and utility industries.
Last week they beat earnings estimates and guided higher....
Downgrades this morning...
Here is a list of Stocks Downgraded by Analysts this Morning....
Roper Inds (ROP) by Sterne Agee
Calgon Carbon (CCC) by Brean Murray
Sunstone Hotel (SHO) by Stifel Nicolaus
LaSalle Hotel (LHO) by Stifel Nicolaus
Hersha Hospitality Trust (HT) by Stifel Nicolaus
MEMC Elec (WFR) by JMP Securities
Syntel (SYNT) by Wachovia
Medicure (MCU) by Merriman Curhan Ford
Glimcher Realty (GRT) by RBC Capital Mkts
Aventine Renewable Energy (AVR) by Soleil
SPX Corp (SPW) by JP Morgan
Motorola (MOT) by Oppenheimer
Borg Warner (BWA) by Deutsche Securities
General Motors (GM) by Deutsche Securities
Smith Micro Software (SMSI) by JP Morgan
Peabody Energy (BTU) by UBS
Alpha Natural Resources (ANR) by UBS
James River Coal (JRCC) by UBS
New York Times (NYT) by Deutsche Securities
Roper Inds (ROP) by Sterne Agee
Calgon Carbon (CCC) by Brean Murray
Sunstone Hotel (SHO) by Stifel Nicolaus
LaSalle Hotel (LHO) by Stifel Nicolaus
Hersha Hospitality Trust (HT) by Stifel Nicolaus
MEMC Elec (WFR) by JMP Securities
Syntel (SYNT) by Wachovia
Medicure (MCU) by Merriman Curhan Ford
Glimcher Realty (GRT) by RBC Capital Mkts
Aventine Renewable Energy (AVR) by Soleil
SPX Corp (SPW) by JP Morgan
Motorola (MOT) by Oppenheimer
Borg Warner (BWA) by Deutsche Securities
General Motors (GM) by Deutsche Securities
Smith Micro Software (SMSI) by JP Morgan
Peabody Energy (BTU) by UBS
Alpha Natural Resources (ANR) by UBS
James River Coal (JRCC) by UBS
New York Times (NYT) by Deutsche Securities
Upgrades this morning...
Here's a list of Analyst Upgrades this Morning...
Take-Two (TTWO) by Sterne Agee
CoStar Group (CSGP) by Needham & Co
Penn Natl Gaming (PENN) by Brean Murray
Juniper Networks (JNPR) by RBC Capital Mkts
Semgroup Energy (SGLP) by Citigroup
Citizens Rep Bancorp (CRBC) by JP Morgan
Lloyds TSB plc (LYG) by Lehman Brothers
Mechel Steel (MTL) by Deutsche Securities
ESS Tech (ESST) by Jefferies & Co
YUM! Brands (YUM) by UBS
Hain Celestial (HAIN) by UBS
DTS (DTSI) by Deutsche Securities
Genentech (DNA) by Rodman & Renshaw
Take-Two (TTWO) by Sterne Agee
CoStar Group (CSGP) by Needham & Co
Penn Natl Gaming (PENN) by Brean Murray
Juniper Networks (JNPR) by RBC Capital Mkts
Semgroup Energy (SGLP) by Citigroup
Citizens Rep Bancorp (CRBC) by JP Morgan
Lloyds TSB plc (LYG) by Lehman Brothers
Mechel Steel (MTL) by Deutsche Securities
ESS Tech (ESST) by Jefferies & Co
YUM! Brands (YUM) by UBS
Hain Celestial (HAIN) by UBS
DTS (DTSI) by Deutsche Securities
Genentech (DNA) by Rodman & Renshaw
Apple Downgraded....
Shares of Apple Inc. are slipping in premarket trading Monday, with BMO Capital Markets lowering its price target onexpectations that valuation multiples will decline. Analyst Keith Bachman at BMO cut his price target to $140 from $160. He alsoraised his 2008 earnings estimate to $5.09 a share from $4.90 but cut his 2009 forecast to $6.26 a share from $6.30.
The mean estimates of analysts surveyed byThomson Financial are for 2008 earnings of $5.13 a share and 2009 earnings of$6.30 a share. The stock is down 40% since the end of 2007.
Bachman said that while his estimates stay "roughly the same," he loweredhis valuation multiple assumption given that the company's three growth drivers-- iPods, iPhones and CPUs -- has now turned to one -- CPUs.
The mean estimates of analysts surveyed byThomson Financial are for 2008 earnings of $5.13 a share and 2009 earnings of$6.30 a share. The stock is down 40% since the end of 2007.
Bachman said that while his estimates stay "roughly the same," he loweredhis valuation multiple assumption given that the company's three growth drivers-- iPods, iPhones and CPUs -- has now turned to one -- CPUs.
Boston Scientific Receives Defibrillator Approval...
Boston Scientific Corp. (BSX) Monday received approval from the Food and Drug Administration for its Confient implantablecardioverter defibrillator, its Livian cardiac resynchronization therapydefibrillator and its upgraded Latitude patient management system.
All three products are part of the company's cardiac rhythm managementbusiness. Both the Confient and Livian defibrillators allow physicians to managetheir patients wirelessly on the Latitude patient management system.
Shares of the Natick, Mass.-based medical devices company closed Friday at$12.31.
All three products are part of the company's cardiac rhythm managementbusiness. Both the Confient and Livian defibrillators allow physicians to managetheir patients wirelessly on the Latitude patient management system.
Shares of the Natick, Mass.-based medical devices company closed Friday at$12.31.
Shades of Tyco....
Countrywide Financial Corp. (CFC), reacting to negative publicity, canceled plans to host a posh ski trip for about 30 mortgage bankers at the Ritz-Carlton Bachelor Gulch ski resort in Avon, Colo., a spokesman said.
The New York Times first reported the cancellation of the trip last week. It was mentioned and criticized on CNBC on Friday.
The cancellation comes as Countrywide tries to damp down widespread criticism of its lending practices, which have led to a surge of foreclosures. The company's chief executive, Angelo Mozilo, is due to appear Thursday at a hearing of the U.S. House Oversight and Government Reform Committee, chaired by California Democrat Henry Waxman, who is raising questions about compensation packages for top executives of companies involved in the mortgage crisis.
The list price for a regular room on a weekday night at the Ritz in Avon starts at $750. But a Countrywide spokesman said the company would have paid "much less" than that.
The three-night event -- for smaller mortgage banks known as "correspondents" that sell home loans to Countrywide -- was to include two four-hour business meetings along with skiing and dinner at upscale restaurants, including the Spago restaurant, whose menu includes Kobe steak with wasabi potato puree for $105.
The New York Times first reported the cancellation of the trip last week. It was mentioned and criticized on CNBC on Friday.
The cancellation comes as Countrywide tries to damp down widespread criticism of its lending practices, which have led to a surge of foreclosures. The company's chief executive, Angelo Mozilo, is due to appear Thursday at a hearing of the U.S. House Oversight and Government Reform Committee, chaired by California Democrat Henry Waxman, who is raising questions about compensation packages for top executives of companies involved in the mortgage crisis.
The list price for a regular room on a weekday night at the Ritz in Avon starts at $750. But a Countrywide spokesman said the company would have paid "much less" than that.
The three-night event -- for smaller mortgage banks known as "correspondents" that sell home loans to Countrywide -- was to include two four-hour business meetings along with skiing and dinner at upscale restaurants, including the Spago restaurant, whose menu includes Kobe steak with wasabi potato puree for $105.
Angry Shareholders at Yahoo...
Ambac rescue at Hand...
Sources say Ambac Financial Group (ABK) is drawing nearer to sealing a $3B capital injection that will allow it to restructure, and save its critical AAA rating. The plan involves a $2.5B stock issue to existing shareholders at a discount, backed by bankers including Citigroup (C), UBS AG (UBS), Wachovia (WB) and Royal Bank of Scotland (RBS), who would commit to buying any shares unsold. Ambac will also sell $500M of debt. Banks are exposed to companies like Ambac and MBIA (MBI) who insure some of their riskier portfolio assets, such as CDOs. A sharp downgrade to the insurers could trigger a fire-sale of such assets.
Markets soared into positive territory during Friday's final minutes when news of the potential rescue broke.
Markets soared into positive territory during Friday's final minutes when news of the potential rescue broke.
Earnings Due Today....
COMPANIES REPORTING EARNINGS
• FirstEnergy (FE) Forecast to report Q4 earnings of $0.92 a share, according to analysts polled by Thomson Financial. This is an increase of 9.52% from $0.84 earned per share same time previous year.
• LDK Solar Co. (LDK). Expected to report Q4 earnings of $0.41 a share.
• Nordstrom Inc. (JWN). Expected to report Q4 earnings of $0.88 a share, a decrease of just 0.67% from $0.89 per share earned same time previous year.
• Orient-Express Hotels (OEH). Estimated to report Q4 earnings of $0.19 a share, down 15.45% from $0.22 earned per share same time previous year.
• Shanda Interactive Entertainment (SNDA). Estimated to post Q4 earnings of $0.45 a share.
• Sotheby's (BID). Likely to post Q2 earnings of $1.47 a share, up 35.83% from $1.08 earned same time previous year.
• FirstEnergy (FE) Forecast to report Q4 earnings of $0.92 a share, according to analysts polled by Thomson Financial. This is an increase of 9.52% from $0.84 earned per share same time previous year.
• LDK Solar Co. (LDK). Expected to report Q4 earnings of $0.41 a share.
• Nordstrom Inc. (JWN). Expected to report Q4 earnings of $0.88 a share, a decrease of just 0.67% from $0.89 per share earned same time previous year.
• Orient-Express Hotels (OEH). Estimated to report Q4 earnings of $0.19 a share, down 15.45% from $0.22 earned per share same time previous year.
• Shanda Interactive Entertainment (SNDA). Estimated to post Q4 earnings of $0.45 a share.
• Sotheby's (BID). Likely to post Q2 earnings of $1.47 a share, up 35.83% from $1.08 earned same time previous year.
US Stock Futures Higher This Morning...
U.S. stock futures on Monday extended the last session's rally on hopes of an imminent bailout of troubled bond insurer Ambac Financial Group Inc. (ABK), with Genentech Inc. (DNA) set to gain after the biotech won surprise backing for use of a cancer drug.
U.S. stocks ended higher on Friday, with hopes that several big banks will soon announce a bailout of bond insurer Ambac Financial driving gains. The Dow industrials ended up 96 points, the S&P 500 rose 10 points and the Nasdaq Composite rose 3 points.
That rally carried over to international markets, with the FTSE 100 up 1.7% in London and the Nikkei 225 jumping 3.1% in Tokyo.
U.S. stocks ended higher on Friday, with hopes that several big banks will soon announce a bailout of bond insurer Ambac Financial driving gains. The Dow industrials ended up 96 points, the S&P 500 rose 10 points and the Nasdaq Composite rose 3 points.
That rally carried over to international markets, with the FTSE 100 up 1.7% in London and the Nikkei 225 jumping 3.1% in Tokyo.
VISA Starts Setting Terms for IPO....
Visa May Raise $17B In IPO. Underwriters for the world's largest payment-card company set the terms of the company's planned initial public offering at 406 million class A shares with an estimated price range of $37 to $42 a share.
Still no date, though...I'm sure we'll be hearing more about this in the coming days...weeks...
Still no date, though...I'm sure we'll be hearing more about this in the coming days...weeks...
Lowe's Earnings Decline...
Lowe's Cos.' (LOW) fiscal fourth-quarter earnings slid to $408 million, or 28 cents a share, from $613 million, or 40 cents, a year earlier, hurt in part by declines in the housing market. A Thomson Financial survey of analysts, on average, projected earnings of 25 cents a share for the quarter. Analysts' estimates usually exclude one-time items.
The company expects first quarter total sales to rise about 2% on earnings of about 38 cents to 42 cents a share. Lowe's said the "next several quarters will be challenging on many fronts as industry sales are likely to remain soft."
The company expects first quarter total sales to rise about 2% on earnings of about 38 cents to 42 cents a share. Lowe's said the "next several quarters will be challenging on many fronts as industry sales are likely to remain soft."
YUM Brands Upgraded to Buy at UBS...
Yum Brands was upgraded to buy from neutral atUBS on expectations that the fast food operators organic growth, profit margins and return on invested capital (ROIC) will all improve significantly by 2010. UBS said it expects organic revenue will see growth of 7% by 2010, up from around 5% today.
Yum Brands owns the Pizza Hut, KFC and Taco Bell chains as well as Long JohnSilver's and A&W All American Food.
The broker maintained its 12-month price target of $43. The stock closedFriday at $34.85.
Yum Brands owns the Pizza Hut, KFC and Taco Bell chains as well as Long JohnSilver's and A&W All American Food.
The broker maintained its 12-month price target of $43. The stock closedFriday at $34.85.
Electronic Arts Offers $2B for Take-Two....
EA (ERTS) makes unsolicited $2 billion cash offer to buy Take Two Interactive (TTWO) publisher of the hit Grand Theft Auto videogame after that company's board last week rejected the proposal as insufficient. The $26-a-share offer is a 50% premium over Friday's closing price.
Word is Take-Two is not interested....
Word is Take-Two is not interested....
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