Good morning. Here's your daily equity research roundup from the Street.
Ford Motor (F): Morgan Stanley analysts Ravi Shanker and Yejay Ying are lowering their price target on F to $17 from $18, calling company management's latest warning on international profits a "double dose of reality and politics," writing, "The reality is that European fundamentals in the mass market are rapidly deteriorating. At the same time, Ford enters the club of auto makers with immediate needs to address excess capacity through near-term action."
Research In Motion (RIMM): Citi analyst Jim Suva is lowering his price target on RIMM stock to $5 from $9.50 on the back of the company's latest miss on earnings yesterday, which sent the stock plummeting after hours. Suva writes, "We believe fundamentals continue to get worse & RIMM could run out of cash and need to raise capital within two years implying that as time rolls forward, if we are correct, the value of RIMM continues to go lower."
Nike (NKE): Credit Suisse analyst Chris Ceraso is lowering his price target on NKE stock to $93 from $117 after the stock (like RIMM) missed earnings expectations yesterday. Ceraso writes, " With decelerating futures, persistence of gross margin pressure, and higher-than-anticipated SG&A spending in FY13, we are lowering numbers meaningfully (FY13 EPS estimates to $5.21 from $5.86). We also expect the multiple to come under pressure without the margin story that we had expected to drive FY13 earnings power even with deceleration of top-line momentum."
Saks (SKS): JP Morgan analyst Matthew Boss is upgrading SKS to Overweight. Boss writes, "In our view, SKS represents a multi-year investment with 25%+ annual EPS growth through 2015 (nearly doubling its EPS base) driven by top-line (Omni-channel roll- out in 2H13), gross margin (technology; PL & exclusives; full price selling), and SG&A (Project Evolution front-end loaded; leverage)."
Hospital Stocks (CYH, THC, VHS): Wells Fargo analyst Gary Lieberman is upgrading CYH, THC, and VHS to Outperform from Market Perform on the back of the Supreme Court decision Thursday to uphold the Affordable Care Act, including the individual mandate. Lieberman writes, "Our valuation range assumes that by 2015 the hospital companies will garner net EBITDA margin expansion between 90-190 basis points due to the benefit of Healthcare reform. This is based on a 50% reduction in uninsured patients offset partially by the full implementation of Medicare and Medicaid DSH cuts by 2015."
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