Analysts’ opinions on stocks in the news Friday

From Standard & Poor’s Equity Research

Watch original video:

S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF CITIGROUP (C; 9.45):

According to an unconfirmed Wall Street Journal article this morning, Citigroup is laying off at least 10,000 employees, about 3.0% of its global workforce, starting this week, viewed like it attempts to lower its require to be paid composition in the face of motionless return growth. Separately, Citi debunks a previous WSJ quantifying pronoun that reported that some directors were considering replacing Sir Win Bischoff as Citi’s chairman. Based attached our view of variableness surrounding future writedowns, we are keeping our 12-month target price at $15, equal to roughly 0.83 times part estimation/share, below Citi’s historical mean proportion. -S. Plesser, E. Oja

S&P MAINTAINS SELL OPINION ON SHARES OF SUN MICROSYSTEMS (JAVA; 3.94):

JAVA announces a global restructuring plan to better align its cost structure with current environment and to bring into being new business groups for improved innovation. The company aims to reduce costs by $700-$800 million annually by reducing headcount by the agency of 5,000-6,000, representing 15%-18% of its workforce, and expects to become liable to $500-$600 million in related charges over the next 12 months. We convinced these measures will help to shave off losses, but still think JAVA’s growth in posse will be limited by macroeconomic and competitive headwinds. We maintain our 12-month mark price of $3. -T. Smith-CFA, C. Montevirgen

S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF ABERCROMBIE & FITCH (ANF) 21.04):

October-quarter EPS of $0.72, vs. $1.29, is below our $0.75 estimate as comps-store sales declined 14%, driving deleveraging of fixed store and distribution expenses, up 660 bps. CEO Mike Jeffries contract is up for renewal and it is not clear which way discussions are going. We believe Jeffries is driving force behind ANF brand and on the outside of his leadership in this environment, we see increased risk. We are reducing fiscal year 2009 (January) and fiscal year 2010 EPS estimates to $3.30 and $2.90 from $4.00 and $4.05, and our 12-month target price to $25 from $37 based forward a peer multiple and new fiscal year 2010 estimate. -M. Driscoll-CFA

S&P MAINTAINS BUY OPINION ON RESEARCH IN MOTION SHARES (RIMM; 40.37):

Amid macroeconomic pressure, warnings from peers and suppliers, and recent launches of new handsets in North America, we believe RIMM’s growth prospects esteem narrowed because its Nov-Q leadership in September. As a result, we are lowering our fiscal year 2009 (February) EPS valuation by $0.12 to $3.58 and fiscal year 2010’session by $0.37 to $4.15, reflecting slower, yet growing sales of smartphones. We are reducing our target price by $50 to $60, using a lower, but premium-to-peers, p-e of about 15 seasons our fiscal year 2010 valuation. But we believe new selloff discounts RIMM’s success in the still-expanding smartphone market. -T. Rosenbluth

S&P KEEPS HOLD RECOMMENDATION ON SHARES OF FREDDIE MAC (FRE; 0.66):

FRE posts third quarter waste of $19.44, vs. injury of $2.07, substantially wider than our $5.95 waste calculate on $5.7 billion in credit losses and $9.7 billion in securities impairments. Federal Housing Finance Authority has requested funds from the Treasury to offset FRE’s $13.8 billion shareholders’ deficit. We see losses continuing well into 2009, forcing FRE to drag at minutest an additional $25 billion from its credit facility. We are widening our 2008 loss estimate from $8.49 to $24.17 and 2009’s loss from $0.20 to $3.92. But we are keeping our target price of $1, a significant discount to historical metrics. -K. Cole-CFA

Original text: {news-link}