The Week in Stocks: AMD and 3M Issue Warnings
Plus, a top executive bolts from eBay, Brazilian telcos get cheap, and more.
Advanced Micro Trims Second-Quarter Forecast
Advanced Micro Devices (AMD) warned Thursday that its second-quarter revenue would fall shy of estimates. Though the shortfall likely reflects a pre-Microsoft Vista lull in the personal computer market, it's also possible that Intel's recent round of price cuts is beginning to bite. Analyst Alex Ross gave his thoughts in an Analyst Note.
Analyst Report: AMD
3M Warns on Second-Quarter Earnings
3M (MMM) posted lower-than-expected earnings today due to weakness in the company's LCD television business and startup costs associated with its optical film unit. However, management did not reduce the firm's fiscal 2006 earnings forecast. Nevertheless, the stock traded down sharply on the news. Analyst Scott Burns wrote that he thinks the sell-off is much ado about nothing.
Analyst Report: 3M
Tobacco Wins Big in Florida
The Florida Supreme Court handed Big Tobacco a major victory when it tossed out a $145 billion verdict against the industry, ruling that the damages were excessive. While the court decertified the class of plaintiffs that was awarded the original damage amount, it left the door open for certain individuals to sue tobacco companies for smoking-related health problems. While not unexpected, the verdict is a big win for the industry. Nevertheless, it didn't impact analyst Gregg Warren's fair value estimates for any of the affected companies.
Analyst Report: Altria (MO)
Analyst Report: British American Tobacco (BTI)
Analyst Report: Carolina Group (CG)
Analyst Report: Imperial Tobacco Group (ITY)
Analyst Report: Reynolds American (RAI)
Analyst Report: UST (UST)
EBay Loses Key Exec
EBay (EBAY) announced yesterday that Jeff Jordan, who headed the company's PayPal unit, was leaving the company. Jordan was widely viewed to be a potential successor to eBay chief Meg Whitman. The stock sold off sharply on the news.
Analyst Report: eBay
Brazilian Telcos Get Cheap
With investors curbing their enthusiasm for risk, many developing-markets stocks have taken it on the chin. Brazilian telecommunications providers Tele Norte Leste (TNE) and Vivo Participacoes (VIV) haven't been spared amid the onslaught: The stocks are down 26% and 35%, respectively, for the year through July 6. Yet, analyst Allan Nichols wrote that the recent pullback is a good opportunity for investors who can tolerate short-term volatility to buy these high-quality, cash-rich operators on the cheap.
Analyst Report: Tele Norte Leste
Analyst Report: Vivo Participacoes
Big Pharma Playing Rough with Generic Drugmakers
As analyst Brian Laegeler wrote in his recent analysis of generic drug-maker Teva Pharmaceuticals (TEVA), big pharma is taking a novel new approach to combating generic encroachment on its patented products: Slashing the price of its branded drugs when they go off-patent. Merck (MRK) recently took this tack with its blockbuster Zocor following the drug's June patent expiration. While that move alone doesn't dent Laegeler's fair value estimate for Teva, he wrote that it raises questions about the broader implications of the practice for the generic drug industry.
Analyst Report: Barr Pharmaceuticals (BRL)
Analyst Report: Dr. Reddy Laboratories (RDY)
Analyst Report: Merck
Analyst Report: Mylan Technologies (MYL)
Analyst Report: Teva Pharmaceuticals
Analyst Report: Watson Pharmaceuticals (WPI)
Rethinking Title Insurer Moat, Risk Ratings
Analyst Jim Ryan reduced the moat rating and increased the risk rating of three title insurers. Declining title insurance underwriting demand, heavy fixed costs, and limited pricing power were cited as factors in the change.
Analyst Report: Fidelity National Financial (FNF)
Analyst Report: First American (FAF)
Analyst Report: Land America (LFG)
Morningstar Analysts does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.