- JP Morgan is cautious on Tiffany & Co (NYSE:TIF) noting that while they are seeing improving trends at TIF Japan, investors have been focused on a potential slowdown in the US and gross margin pressure from product mix and raw material prices. Firm believes investors have also begun to question the historical premium TIF received relative to its earnings growth rate. The operating margin recovery they forecast over the next two years (driven primarily by a recovery in Japan) is being overshadowed by the pressure on the multiple and EPS volatility around sales mix shifts. Expects the multiple to be constrained going forward.
Notablecalls: Not actionable but good to know category.
- Bear Stearns comments on Synaptics (NASDAQ:SYNA) after the co presented at the 17th Annual Bear Stearns Technology Conference. Management did not provide any financial update nor did they comment on on the status of its Apple relationship. However, firm's channel checks continue to indicate that SYNA has potentially won back some Apple iPod business, which could add significant upside to current ests/price target --i.e., potential Apple business could be worth $1 (at 10% win) to $8 (70%) using a lower 10x P/E, and using higher P/E on AAPL could lead to further upside. Maintains Outperform and $24 tgt.
Notablecalls: Not actionable but good to know category.
- CIBC notes their hannel checks suggest that Magellan Health (NASDAQ:MGLN) is in the final stages of signing an at-risk radiology contract with an existing ASO client in New York that has at least 800,000 commercial risk lives. Negotiations are complicated, and a delay is possible, but MGLN appears to be making a lot of progress. Once Magellan has finalized an at-risk contract, it will issue a press release.
Firm is raising their price target by $4, to $47 per share, based on the likelihood that Magellan announces an at-risk contract in the near-term, coupled with our higher cash flow assumptions following the company's first quarter results. Estimates the contract would add about $175 million in premiums (assuming $18 PMPM in revenue), and $8.7 million in EBITDA (using a 5% EBITDA margin), or about $0.12 per share.
Notablecalls: I suspect some of the news is already priced in here. Yet the chart is strong and may provide some more upside. One to watch.
- Citigroup is positive on Nike (NYSE:NKE) saying that although the stock has been sluggish over the last several months, they still believe this is a great investment over the long term. Based on current industry fundamentals and how Nike is positioned today, the firm thinks this stock should be trading at a much higher valuation and the downside risk is limited. Thinks Nike's current valuation of 14.5x year forward P/E, which is its lowest level in three years, gives investors the perfect opportunity to invest in the Nike name.
Currently, they estimate the company has $1.6 billion sitting on its balance sheet ($1.2 billion net cash). Nike already spends on average around $550 million in share repurchases a year (or about 2% of its shares outstanding) however, historically; this has been just enough to offset any options exercised during the year. Thinks it is highly likely over the next several months (possibly as soon as Nike announces its Q107 results in September 2006) that Nike management could announce another share repurchase program. There is a good possibility it could be much more generous program than in the past and Nike management has appeared to be hinting towards distributing more cash directly to shareholders by increasing its dividend significantly over the last few years (24% in 2005 and 25% in 2004).
Believes an aggressive share repurchase program announcement could be a catalyst the stock needs. Reits Buy.
Notablecalls: Not actionable but good to know category.
Notablecalls: Not actionable but good to know category.
- Bear Stearns comments on Synaptics (NASDAQ:SYNA) after the co presented at the 17th Annual Bear Stearns Technology Conference. Management did not provide any financial update nor did they comment on on the status of its Apple relationship. However, firm's channel checks continue to indicate that SYNA has potentially won back some Apple iPod business, which could add significant upside to current ests/price target --i.e., potential Apple business could be worth $1 (at 10% win) to $8 (70%) using a lower 10x P/E, and using higher P/E on AAPL could lead to further upside. Maintains Outperform and $24 tgt.
Notablecalls: Not actionable but good to know category.
- CIBC notes their hannel checks suggest that Magellan Health (NASDAQ:MGLN) is in the final stages of signing an at-risk radiology contract with an existing ASO client in New York that has at least 800,000 commercial risk lives. Negotiations are complicated, and a delay is possible, but MGLN appears to be making a lot of progress. Once Magellan has finalized an at-risk contract, it will issue a press release.
Firm is raising their price target by $4, to $47 per share, based on the likelihood that Magellan announces an at-risk contract in the near-term, coupled with our higher cash flow assumptions following the company's first quarter results. Estimates the contract would add about $175 million in premiums (assuming $18 PMPM in revenue), and $8.7 million in EBITDA (using a 5% EBITDA margin), or about $0.12 per share.
Notablecalls: I suspect some of the news is already priced in here. Yet the chart is strong and may provide some more upside. One to watch.
- Citigroup is positive on Nike (NYSE:NKE) saying that although the stock has been sluggish over the last several months, they still believe this is a great investment over the long term. Based on current industry fundamentals and how Nike is positioned today, the firm thinks this stock should be trading at a much higher valuation and the downside risk is limited. Thinks Nike's current valuation of 14.5x year forward P/E, which is its lowest level in three years, gives investors the perfect opportunity to invest in the Nike name.
Currently, they estimate the company has $1.6 billion sitting on its balance sheet ($1.2 billion net cash). Nike already spends on average around $550 million in share repurchases a year (or about 2% of its shares outstanding) however, historically; this has been just enough to offset any options exercised during the year. Thinks it is highly likely over the next several months (possibly as soon as Nike announces its Q107 results in September 2006) that Nike management could announce another share repurchase program. There is a good possibility it could be much more generous program than in the past and Nike management has appeared to be hinting towards distributing more cash directly to shareholders by increasing its dividend significantly over the last few years (24% in 2005 and 25% in 2004).
Believes an aggressive share repurchase program announcement could be a catalyst the stock needs. Reits Buy.
Notablecalls: Not actionable but good to know category.
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