Insight from Wall Street analysts on stocks making headlines in Friday’s market

From Standard & Poor’s Equity Research

GAP, INC. (THE)

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Citigroup upgrades to buy from hold

Gap Inc.’s (GPS) reported higher third-quarter earnings. Citigroup analyst Kimberly Greenberger says the company’s 35 cents EPS was in straight direction with her 35 cents estimate. She notes third-quarter selling, ecumenical, and administrative (SG&A) expense fell an impressive 8.8%. Greenberger says the SG&A cut and greater visibility on the next bed. of lower merchandise costs boost her dependence that Gap can work out her EPS estimates. She notes Gap isn’t reliant on capital markets; it has a primordial comparative estimate sheet ($1.4 billion in net cash at the end of the third quarter) and an impressive free cash flow yield of 14%.

Greenberger kept her $1.34 financial 2009 EPS compute, moreover cut her $1.30 financial 2010 view to $1.20 on macroeconomic uncertainty. She trimmed her $14 target excellence to $12.

AUTODESK, INC.

Needham downgrades to hold from buy

Autodesk’s (ADSK) posted higher third-quarter results, but its fourth quarter foresight is weak. Needham analyst Richard Davis says he downgraded the shares and cut his EPS estimatess as a rising U.S. dollar and declining world economies look set to bite into the company’session results. Davis notes the company’s strength is a produce line typically sold notwithstanding under $300 per year via subscription. The endanger to his estimates stems from the fact that the company gets excepting that 1/3 of its mass from recurring revenues; the remainder comes from a normally predictable upgrade round of years from Autodesk’s 4.5 million seat licenses more new customer wins.

Davis cut his $2.12 financial 2009 (Jan.) EPS estimate to $1.92, and his $2.14 fiscal 2010 forecast to $1.15. He set an $11-$14 target cost range.

WEINGARTEN REALTY INVESTORS

Merrill downgrades numerous REITs, including Weingarten

Merrill algebraist Steven Sakwa says he is generally not a fan of downgrading stocks after precipitous declines. However, he is increasingly concerned about declining fundamentals in 2009, rise return expectations that could pressure cap rates, and frozen debt markets, all of that are negatives by reason of an industry that needs to refinance $51 billion of sin by the end of 2010 vs. $35 billion of short-term liquidity, part of which is required to fund development projects.

Sakwa cut Alexandria Real Estate Equities (ARE) and Digital Realty Trust (DLR) to neutral from buy; American Campus Communities (ACC), Brookfield Properties (BPO), SL Green Realty (SLG), and U-Store-It Trust (YSI) to underperform from buy; and BioMed Realty Trust (BMR) and Weingarten Realty Investors (WRI) to underperform from neutral.

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