What’s the Story?

by CC June 27, 2012 9:05 am • Commentary


Orders for durable goods climbed more than forecast in May, easing concern that U.S. manufacturing is faltering.

Bookings rose 1.1 percent, the first increase in three months, a Commerce Department report showed today in Washington. The median forecast of 76 economists surveyed by Bloomberg News called for a 0.5 percent gain. Excluding the volatile transportation equipment, orders for goods meant to last at least three years advanced 0.4 percent.

Business Insider

So far, we have Doug Anmuth of J.P. Morgan’s note. He rates Facebook “overweight” and gives it a year-end 2013 price target of $45. (J.P. Morgan was a co-lead on the IPO.)

  • We expect growth to trough in 2Q and reaccelerate in 2H12 and into 2013. We project 2Q12 revenue of $1.1B (+24% Y/Y) and EBITDA of $587M (+6%, 53.1% margin), but we expect revenue to reaccelerate and margins to expand modestly Q/Q in the back half driven largely by continued solid user growth and newer ad formats. We project 2012-2015 three-year CAGRs of 33% for revenue and 35% for EBITDA.
  • Overweight rating and $45 PT. Our year-end 2013 price target of $45 is based on an average of two methodologies: 1) 17x 2014E EBITDA of $5.0B which yields $39; and 2) our DCF analysis utilizing a 3% terminal growth rate and an 11% WACC which yields $51.

A U.S. judge on Tuesday backed Apple Inc’s request to stop Samsung Electronics selling its Galaxy Tab 10.1 tablet in the United States, giving the iPhone maker a significant win in the global smartphone and tablet patent wars.

Samsung’s Galaxy touchscreen tablets, powered by Google’s Android operating system, are considered by many industry experts to be the main rival to the iPad, though they are currently a distant second to Apple’s device. Microsoft and Google are also preparing tablet offerings.

U.S. District Judge Lucy Koh in San Jose, California, had previously denied Apple’s bid for an injunction on the tablet and multiple Galaxy smartphones. However, a federal appeals court instructed Koh to reconsider Apple’s request on the tablet.

“Although Samsung has a right to compete, it does not have a right to compete unfairly, by flooding the market with infringing products,” Koh wrote on Tuesday, adding the order should become effective once Apple posts a $2.6 million bond to protect against damages suffered by Samsung if the injunction is later found to have been wrong.


Lennar [LEN  27.39        ]– The homebuilder earned $0.21 per share for its latest quarter, excluding certain items, four cents above estimates. Revenue was also above analyst forecasts, as deliveries rose 20 percent over a year ago and new orders jumped 40 percent.

General Mills [GIS  38.15        ] – The food maker earned $0.60 per share, excluding certain items, for its fiscal fourth quarter. That was one cent above estimates, with the company’s Yoplait acquisition helping its bottom line.

McCormick [MKC  57.42  —  UNCH    ] – The spice maker matched estimates with quarterly profit of $0.60 per share, with revenues coming in above forecasts. Price increases helped offset the impact of increased materials costs.

Monsanto [MON  77.87        ] – The company earned $1.63 per share, excluding certain items, for its third quarter, three cents above estimates, with revenues also above consensus. Its full-year view of $3.65 to $3.70 compares to analyst estimates of $3.70.

Facebook [FB  33.10        ] – Many of Wall Street’s biggest investment firms have weighed in with ratings on Facebook’s stock this morning. Among them: “overweight” ratings from Morgan Stanley, Wells Fargo, Piper Jaffray, and JPMorgan Chase; “neutral” ratings from Citi, Credit Suisse, and Bank of America/Merrill Lynch; a “buy” from Goldman Sachs; and an “outperform” from Oppenheimer.

Apple [AAPL  572.025        ] – Apple has won a victory over rival Samsung, as a judge grants the company’s request to halt sales of Samsung’s Galaxy Tab in the U.S. The iPad rival has been at the center of an ongoing patent dispute between the two companies.

Google [GOOG  564.68        ] – The company will reportedly unveil a tablet that will be co-branded with Taiwan’s Asustek, according to an Asustek executive quoted by Reuters. The new device will be priced to compete with Amazon.com’s [AMZN  225.61        ] Kindle Fire.

Boeing [BA  70.93        ] – The jet maker has appointed company executive Ray Conner to head Boeing’s commercial airplanes division, effective Oct. 1, when Jim Albaugh retires after 37 years with Boeing.

Bristol-Myers Squibb [BMY  34.52        ] – The drugmaker has announced an additional $3 billion stock buyback program, adding to a prior $3 billion program that has about $340 million remaining.

Yahoo [YHOO  15.345        ] – Yahoo has announced a global content distribution deal with on-demand music provider Spotify. Yahoo will offer Spotify on its Media Network service.

Discover Financial [DFS  33.51  —  UNCH    ] – Discover has increased its estimate of possible losses, stemming from a regulatory investigation of its marketing of fee-based add-on products. The company says losses could reach $110 million, up from a prior estimate of $100 million.

O’Reilly Automotive [ORLY  96.44        ] – O’Reilly is cutting its sales guidance for the second quarter, now expecting a comparable store sales increase of 2 percent to 2.5 percent, compared to a prior estimate of 3 percent to 5 percent. The auto parts retailer also expects second quarter earnings per share to be at the lower end of its previously announced range of $1.13 to $1.17. The company says warm winter weather may have shifted some second quarter sales into the prior quarter.

Microsoft [MSFT  30.02        ] – The software giant says it’s disappointed with a court ruling that rejected its challenge to an European Union antitrust decision, even though the court reduced a fine against the company by 4.3 percent to $1.07 billion.

Loral Space & Communications [LORL  57.74  —  UNCH    ] – Loral is selling its satellite manufacturing subsidiary to Canadian firm MacDonald Dettwiler for about $875 million.

Sony [SNE  13.84  —  UNCH    ] – New CEO Kazuo Hirai has elaborated on the company’s revival plan at the annual meeting in Tokyo, and assured a record 9,300 shareholders in attendance that the plan will work. Sony is coming off a record $5.75 billion annual loss for the fiscal year that ended March 31.

Medical Device Makers – The U.S. Food and Drug Administration is probing the safety of all-metal hip implants, a revelation which could affect the stocks of medical device makers such as Johnson & Johnson [JNJ  66.42        ] and Zimmer Holdings [ZMH  61.66  —  UNCH    ]. Recent studies have shown that the implants may fail more often than other products, and can also leach metal into the bloodstream.

Goldcorp [GG  37.52        ] – The gold producer has won a court battle with rival Barrick Gold [ABX  36.92        ] over ownership of the El Moro gold-copper project in Chile. Barrick had struck a deal with owner Xstrata, but Goldcorp came in with another bid after a minority shareholder exercised its right to reject Barrick’s offer.