Sunday, October 21, 2007

Barron's Summary (JNPR, SHLD, C, MMC, VAR, MNST)

Barrons' "The Trader" column discusses Juniper (JNPR), whose stock has jumped 95% YTD. Hopes run very high when Juniper reports earnings Tue. After all, the stock jumped last qrtr when it beat ests. Bulls also hope that Juniper will buy back more shares. But how much good news is needed to satiate this crowd? At about 36, Juniper shares trade at 33x '08 ests, well ahead of 20-21x for other peers. Morgan Stanley analyst Scott Coleman downgraded the stock earlier this month on valuation concerns even though he still likes Juniper's "strong fundamentals, growth story and the mkt outlook." Among other things, he thinks "expectations for Juniper appear universally bullish," with shares already pricing in a modest 3Q topping of analyst ests. Also, Juniper will need to keep investing in R&D and marketing, and the recent spurt in margin improvement will moderate in time. And with nearly 47% of its sales from the US, any blip in domestic technology spending will slow profit growth.

Sears Holdings (SHLD) sells for 134 a share, but could have a break-up vaule of more than $300. If Lampert turns around its retail operations, the shares could rally to 200 or more.

Citigroup (C) says the SIV situation is manageable. But Wall Street is worrying about the possibility of a multibillion-dollar loss.

Marsh & McLennan (MMC) dropped to 24.30, near its 52-week low. If the company can boost its operating margins and earnings, as some fans expect, its shares could be worth 40.

Sales growth at Varian Medical Systems (VAR) has eased, but that could prove temporary as orders deferred because of mergers finally come through. Look for the stock to jump 25%.

Bulls on the stock assert that Monster Worldwide (MNST), now trading in the mid-30s, should jump past 50 over the next year. If Monster eventually goes on the block, the price could be even higher.

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