- RBC Capital is positive on Digital River (NASDAQ:DRIV) saying that historically, the co has introduced full-year guidance during its Q3 conference call, and they expect the same again this year. Firm believes management's revenue guidance of 25%-30% will be conservative, yet above current street consensus of approximately 19% growth. It's also worth noting that management has a history of beating its guidance and has historically grown close to 40%, which includes acquisitions.
Based on checks they have increased confidence for the remainder of 06 and are raising FY07 revenue/EPS estimates slightly from $360M/$2.11 to $370M/$2.15 and increasing price target from $50 to $60. Firm is also are introducing FY08 estimates of $455M/$2.61.
Notablecalls: Not actionable but good to know category. DRIV is set to report on Oct 26.
- Soleil comments on Harley-Davidson (NYSE:HOG) after the co announced it has an agreement with Lehman Trikes (NR) for the development of three-wheeled motorcycles referred to as "trikes"
While the company may be trying to capitalize on the aging of the babyboomers, they doubt trikes address near-term concerns and may present a longer-term negative.
Firm believes trikes conflict with HOG's ride wild image. Trikes will add to dealer costs and inventory, and may increase liability (and negative publicity). Believes that the current market for trikes is less than 1% of industry bike shipments. Typical trike customers are the disabled, seniors and women.
Firm notes they understand Harley will manufacture trikes as an OEM supplier (making HOG
the only US manufacturer). Maintains Sell and $44 tgt.
Notablecalls: Think HOG is an investment/core short due to the weakening consumer.