- CIBC reits Sector Outperformer rating and $9 tgt on TUNE, following Analog's Device's (ADI) proposed acquisition of privately-held Integrant, a Korean supplier of mobile video tuners. This only solidifies firm's belief that silicon tuning, TUNE's forte, has quickly become the most coveted video technology. ADI paid $127 mln or around 6x revs (quite a premium) for a 2nd-tier player (behind TUNE).
Notablecalls: Would not be surprised to see some interest in TUNE following the news.
- JP Morgan comments on EMC following analyst meeting in New York yesterday. AlthoughEMC reiterated its quarterly and full-year targets, management noted that customers appear to be underspending their budgets at this point in the year and highlighted that this is a particularly backend loaded quarter. Firm remains concerned that the potential for increasingly difficult competitive dynamics, software integration issues, and limited margin leverage may pressure the shares in coming months. Maintains Neutral.
Notablecalls: Not actionable but good to know category.
- Citigroup thinks ADBE could reset FY06 guidance lower when it reports FQ2 results on 6/15. It appears many investors expect this move as stock is down 25% since the 5/2 mid-qtr update, and such a reset could provide relief ahead of product cycles. Firm's proprietary survey of 50 resellers suggest a sluggish demand environment during this time of multiple transitions (mgmt, products, acquisition, hardware). Reits Buy but lowers tgt to $37 from $44.
Notablecalls: ADBE has gotten hit hard lately suggesting the problems are widely known. Also, Citi has been one of the last bulls standing. We may see some early selling but shorts have already made their money on that one.
- Citigroup comments on AMAT saying their field work suggests the co making progress in ~$600MM brightfield inspection mkt (~20% of KLAC's revs) with its UVision tool. PDC remains small for AMAT (~6% revs).
Notablecalls: Not actionable but good to know category.
- Citigroup notes NDAQ's shares are down 35% since mid-April, while the U.S. exchange stocks are down 20%. While NDAQ's shares have underperformed the sector, the firm remains on the sidelines for now given their cautious outlook for the core cash equities business and lack of positive catalysts.
They think the warrant expiration/related sales are clearly weighing on the stock today, along with other broader issues. This pressure could moderate towards the end of June, in our opinion. Holders of the warrants need to exercise by June 27th, yet can hold the shares and sell anytime after that date if they choose to. Firm suspects those that want to sell may do so in conjunction with the warrant expiration throughJune 27th. Total warrants are about 14 mm, of which about a third have reportedly been sold already. Maintains Hold rating but reduces tgt to $32 from $43.
Notablecalls: Would not be surprised to see more selling pressure on NDAQ. Chart looks weak. Shorting oppy.
Notablecalls on Novellus (NVLS): While several firms are upping their estimates on NVLS following positive results and guidance announced last night the shares are generally considered fairly priced. Most tend to look at "normalized earnings" and not the close to peak numbers Novellus posted last night. While the stock looks inexpensive on 2006 P/E, it is still expensive at 30x estimate of normalized EPS.
Shares were up 5% in after hours trading and are likely to see some buying this morning. Note that the 50 day moving average lays @ 24 dollar level. Would not be surprised to see shorts step in around these levels.
Notablecalls: Would not be surprised to see some interest in TUNE following the news.
- JP Morgan comments on EMC following analyst meeting in New York yesterday. AlthoughEMC reiterated its quarterly and full-year targets, management noted that customers appear to be underspending their budgets at this point in the year and highlighted that this is a particularly backend loaded quarter. Firm remains concerned that the potential for increasingly difficult competitive dynamics, software integration issues, and limited margin leverage may pressure the shares in coming months. Maintains Neutral.
Notablecalls: Not actionable but good to know category.
- Citigroup thinks ADBE could reset FY06 guidance lower when it reports FQ2 results on 6/15. It appears many investors expect this move as stock is down 25% since the 5/2 mid-qtr update, and such a reset could provide relief ahead of product cycles. Firm's proprietary survey of 50 resellers suggest a sluggish demand environment during this time of multiple transitions (mgmt, products, acquisition, hardware). Reits Buy but lowers tgt to $37 from $44.
Notablecalls: ADBE has gotten hit hard lately suggesting the problems are widely known. Also, Citi has been one of the last bulls standing. We may see some early selling but shorts have already made their money on that one.
- Citigroup comments on AMAT saying their field work suggests the co making progress in ~$600MM brightfield inspection mkt (~20% of KLAC's revs) with its UVision tool. PDC remains small for AMAT (~6% revs).
Notablecalls: Not actionable but good to know category.
- Citigroup notes NDAQ's shares are down 35% since mid-April, while the U.S. exchange stocks are down 20%. While NDAQ's shares have underperformed the sector, the firm remains on the sidelines for now given their cautious outlook for the core cash equities business and lack of positive catalysts.
They think the warrant expiration/related sales are clearly weighing on the stock today, along with other broader issues. This pressure could moderate towards the end of June, in our opinion. Holders of the warrants need to exercise by June 27th, yet can hold the shares and sell anytime after that date if they choose to. Firm suspects those that want to sell may do so in conjunction with the warrant expiration throughJune 27th. Total warrants are about 14 mm, of which about a third have reportedly been sold already. Maintains Hold rating but reduces tgt to $32 from $43.
Notablecalls: Would not be surprised to see more selling pressure on NDAQ. Chart looks weak. Shorting oppy.
Notablecalls on Novellus (NVLS): While several firms are upping their estimates on NVLS following positive results and guidance announced last night the shares are generally considered fairly priced. Most tend to look at "normalized earnings" and not the close to peak numbers Novellus posted last night. While the stock looks inexpensive on 2006 P/E, it is still expensive at 30x estimate of normalized EPS.
Shares were up 5% in after hours trading and are likely to see some buying this morning. Note that the 50 day moving average lays @ 24 dollar level. Would not be surprised to see shorts step in around these levels.
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