Monday, March 19, 2007

Calls of Note Part 5

- Merrill Lynch comments on FTI Consulting (NYSE:FCN) noting the shares have risen 15% since the company reported its strong 4Q06 results and outlook on February 15th. Firm reiterates their Buy-rating on the stock, but is highlighting the potential for temporary downward pressure on the stock price as consensus estimates currently may not fully reflect the seasonal weakness in 1Q. MLCO's revised 1Q EPS forecast of $0.36 is now 8% below consensus of $0.39. However, for the full year, they see more upside potential than downside risk to their estimates, and view any short-term weakness as a buying opportunity.

Firm looks for revenue growth to remain solid in coming years and to prove resilient in the event of a US economic downturn, cushioned by the counter-cyclical nature of the Restructuring business (17% of sales), which would benefit from any pick-up in bankruptcy-related activity. Tgt remains $39.

Notablecalls: The stock sure looks like it wants to move somewhat lower.

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