World Business

From Standard & Poor’s Equity Research

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ING REITERATES BUY ON FRANCE TELECOM

ING analyst Javier Borrachero says disagreement over financial terms has been stumbling block in France Telecom’s (FTE) deal talks with TeliaSonera. He says FTE has underperformed peers by 10% since the first interest was communicated; therefore it’s to be expected the share price could recover euro 1.5-2 per share given exhaustion of deal.

He notes that the market saw no merit in the deal and management now seems to be showing good financial teach. He says the lock opener judicial is what management has to say near its M&A policy going forward. He thinks they will resume very prudent previous M&A mode of management of selective acquisitions in more markets (Vietnam, Algeria).

Borrachero says solid fundamentals will afresh act being of the class who the main catalyst, with second quarter likely to deliver another estimate of well-established poetry.

HIBBETT SPORTS DOWNGRADED BY NEEDHAM TO HOLD FROM BUY

Needham algebraist Sean McGowan says he’s downgrading Hibbett Sports (HIBB) based on his belief that recent price levels fairly capture HIBB’s growth prospects, and that recent price strength leaves the stock a piece more assailable to the vagaries of jittery consumer sentiment. He notes HIBB closed Friday at $22.25, just below his $23 target.

McGowan believes HIBB’s second quarter results could show positive surprises, being of the kind which was the case in the first divide, but that positive surprises may now be baked into the stock price.

He maintains his EPS estimates of $1.15 for fiscal year 2009 (January) and $1.30 for fiscal year 2010. He believes HIBB remains excellently positioned to post long-term sales growth rates in the mid-teens and EPS growth in the upper teens.

CANACCORD INITIATES COVERAGE OF LOJACK WITH SELL, $4 TARGET PRICE

Canaccord analyst Jeff Rath says his $4/share valuation with a view to LoJack (LOJN) is based on a pure tangible equity per share parsing. He says, under which circumstances his DCF example yields a share price of $6.52, he feels LOJN’s intrinsic value is much lower, and a more remote deterioration in EPS could cause shares to trade to net book equivalent.

Rath notes that June new car sales data command have being released July 1, and J.D. Power & Associates sees the seasonally adjusted yearly transactions rate of sales falling 23% year-over-year to 12.5 the great body of the people vehicles vs. 16.3 million.

He furthermore notes LOJN will post second quarter EPS on Aug. 4. He sees $0.19 EPS, vs. $0.17 consensus and $0.20 guidance. He feels the risk to future profitability and estimates is very high.