|
Street Talk: Oracle cut
|
 |
November 20, 2000: 10:36 a.m. ET
Analysts also down on Cisco, Juniper, Redback, Texas Instruments, eBay
|
NEW YORK (CNNfn) - Technology stocks took a beating from analysts Monday, with Oracle, Cisco Systems, Juniper Networks, Redback Networks, Texas Instruments and eBay getting downgrades and negative comments.
UBS Warburg cut Oracle (ORCL: Research, Estimates) to "hold" from "buy" after the software maker announced Friday night that senior executive Gary Bloom had resigned to become chief executive officer of Veritas (VRTS: Research, Estimates).
"Prior to this latest event, we had been cautious in our outlook for the company due to a number of potential issues such as product transition risk and tougher year-ago comparisons," analyst Andrew Roskill said in a research note.
"While Bloom's departure is not in itself disastrous for Oracle, it is yet another chink in the armor," Roskill wrote. Though he recognized Oracle has been sold off significantly, Roskill said he thought the company's stock was still unappealing.
Bear Stearns, on the other hand, said it thought investors -- which cut Oracle shares by $3.81 to $25 in early trading -- "overreacted" to the news about Bloom's departure. It reiterated its "buy" rating.
Morgan Stanley Dean Witter cut its price target on Cisco (CSCO: Research, Estimates) to $75 from $90 and downgraded its rating on Juniper Networks (JNPR: Research, Estimates) and Redback Networks (RBAK: Research, Estimates) to "outperform" from "strong buy."
SG Cowen, on the other hand, reiterated its "strong buy" ratings for Cisco and Redback.
SG Cowen also reiterated "buy" ratings on Amazon.com (AMZN: Research, Estimates), Computer Associates (CA: Research, Estimates) and Nortel Networks (NT: Research, Estimates).
Lehman Brothers cut its 2001 earnings estimate for chip maker Texas Instruments (TXN: Research, Estimates) to $1.48 a share from $1.53 on the belief that the "weak order environment" in the third quarter will continue in the fourth quarter. Lehman kept its "neutral" rating and $50 price target on Texas Instruments shares, which closed Friday at $43.75.
Get your fresh Hot Stocks.
Lehman Brothers downgraded online auction site eBay (EBAY: Research, Estimates) to "neutral" from "buy" on concerns its core business is slowing and potential for acquisition is fading.
"In our opinion, eBay remains one of the most valuable franchises on the Internet due to its highly profitable, e-commerce platform," Lehman said in a research note.
"However, eBay's aggressive 2005 sales projection has recently raised a red flag in our opinion," Lehman added. "In the past, we had believed that eBay would be acquired at an attractive price if its business slowed. However, with the recent share price declines of its most likely potential acquirers, AOL (AOL: Research, Estimates) and Yahoo! (YHOO: Research, Estimates), this seems far less likely."
Deutshe Banc Alex. Brown cut Web-hosting firm Digex (DIGX: Research, Estimates) to "buy" from "strong buy" after the Justice Department Friday approved the acquisition of Intermedia Communications (ICIX: Research, Estimates) by WorldCom (WCOM: Research, Estimates). The deal was approved after WorldCom agreed to shed all of Intermedia's business operations except its controlling stake in Digex.
The DB Alex Brown target price for Digex stock is $78.
Bank of America
Credit Suisse First Boston analyst Susan Roth cut her earnings estimates for Bank of America (BAC: Research, Estimates) in light of the
company's disclosure last week that its loan losses could more than double in the third and fourth quarters.
The Charlotte, N.C.-based banking company said in a regulatory filing last week it had to classify a large loan in the consumer services industry as problematic in November, but declined to name the borrower or the size of the loan.
Analysts later said, however, that the loan is worth $450 million to $500 million and was made to troubled consumer products maker Sunbeam (SOC: Research, Estimates), whose best-known products include Mr. Coffee coffee-makers and First Alert smoke alarms.
Roth said in a research note that she cut her fourth-quarter earnings estimate to $1.13 a share from $1.33 a share and also lowered her full-year 2001 earnings estimate to $5.50 a share from $5.75 a share.
 Roth wrote: "At $40, (Bank of America) trades at the low end of the valuation range for the CSFB Large Cap Banks, discounting a material earnings shortfall."
She said the shares are rated at hold and "improved earnings visibility is the key to share price outperformance."
Shares of Bank of America closed at $40.31 Friday.
Tyco, Quest, AT&T
Merrill Lynch added diversified manufacturer Tyco International (TYC: Research, Estimates) to its "Focus One" list, giving it a "buy" rating. Merrill Lynch said in a research note that Tyco's "health business mix" will allow it to distance itself from others in its sector. Merrill also set a 12-month price target of $100 on Tyco shares, which closed Friday at $57.38.
UBS Warburg reiterated its "strong buy" rating on medical testing firm Quest Diagnostics (DGX: Research, Estimates).
And UBS Warburg kept its "buy" rating and $35 12-month price target for AT&T (T: Research, Estimates), "recognizing that AT&T still faces significant challenges, but... should benefit from upcoming AT&T wireless distribution." 
|
|
|
|
|
 |
|
