Analysts’ opinions on shares in the news Tuesday

From Standard & Poor’s Equity Research

Watch original video:

S&P KEEPS HOLD RECOMMENDATION ON SHARES OF FANNIE MAE (FNM; 0.34):

Shares are up significantly in premarket, after the Federal Reserve announced a new program to buy up to $100 billion of debt issued by housing-related government sponsored enterprises. Also, the Federal Reserve will purchase up to $500 billion in mortgage-backed securities backed by FNM and Freddie Mac (FRE; 0.45) . We believe these actions inclination help abridge the cost and increase the availability of credit for home buyers. But, we grant not see these actions lessening the credit-related losses we forecast for FNM over the future quarters. We assert our target price of $0.50. -K. Cole-CFA

S&P MAINTAINS STRONG BUY OPINION ON SHARES OF HEWLETT-PACKARD (HPQ; 35.70):

HPQ posts October-quarter non-GAAP EPS of $1.03, vs. $0.86, in put into with our behold and the Nov. 18 pre-announcement. Revenue rose 19%, reflecting about 5% growth in pre-EDS operations more 2-months of sales from acquired EDS operations. Although we foresee pressure on sales in financial year 2009 (October) as technology expenditure trends weaken, we think HPQ has potential to maintain market share and improve profitability via aggressive cost controls. We keep our fiscal year 2009 EPS view at $4.05, but raise fiscal year 2010’s to $4.60 from $4.50, and our target worth to $49 from $44 on a slightly higher target p-e multiple. -T. Smith-CFA

S&P UPGRADES OPINION ON ADSS OF BHP BILLITON TO BUY FROM HOLD, ON VALUATION (BHP; 33.00):

The ADSs of BHP are commercial higher in the premarket following the assemblage’s announcement that it was withdrawing its unsolicited all stock offer to attain Rio Tinto Plc (RTP; 145.00). BHP stated that a combination of sharply declining article of merchandise prices and ascent costs associated through the proposed merger raised the risk of the performance to unacceptable levels. We continue to estimate earnings per ADS of $4.37 for the sake of financial year 2009 (June). Our 12-month target price on BHP ADSs remains $42. -L. Larkin

S&P MAINTAINS HOLD OPINION ON SHARES OF ANALOG DEVICES (ADI; 18.17):

Adjusted October-quarter EPS of $0.50, vs. $0.38, is ahead of our $0.38 value. Revenue rose 6% from last quarter on healthy growth of communication and consumer products, and were above our projection. Gross margins, also beating our model, widened put on more favorable sales mix. Consequently, operating and net margins expanded. ADI also announces operating cost cuts. We are raising our financial year 2009 (October) EPS appraise $0.02 to $1.20 on anticipated efficiencies. But we remain cautious due to macroeconomic environment, and think put to hazard of order deterioration remains. We keep our mark recompense of $25. -C. Montevirgen

S&P REITERATES HOLD RECOMMENDATION ON SHARES OF HORMEL FOODS (HRL; 29.14):

HRL reports October-quarter EPS of $0.50, vs. $0.70, $0.03 above our estimate. Results were hurt by a significant diminution in investment income, higher raw corporeal costs, weak pricing monarch, and an unfavorable shift in product mix. With our view that pricing power is unlikely to return in the before anything else half of fiscal year 2009 (October) because of an oversupply of protein in the marketplace, and by weakening consumer demand in soft household environment, we are lowering our fiscal year 2009 EPS estimate by $0.17 to $2.20, and cutting our 12-month target price by $5 to $32 on updated comparative and p-e analyses. -J. Agnese

Original text: {news-link}