Anaylsts’ opinions on stocks in the news Thursday

From Standard & Poor’session Equity Research

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S&P MAINTAINS HOLD OPINION ON BCE INC SHARES (BCE; 18.29):

BCE announces its pending private equity-led leveraged buyout, priced at about US$35, will not proceed due to potential solvency issues. BCE is seeking the $1.2 billion breakup absolute title, and separately plans to reinstate its division. We had held out hope the deal would close, on the contrary in light of reduced peer valuations and a tight credit market, we do not expect a modern overture to escape. We are lurid our 12-month target price by $14 to $21, removing the deal term assumptions and reflecting a 11.5 seasons multiple attached our 2009 EPS estimate of $1.82, given a weak Canadian dollar. -T. Rosenbluth

S&P DOWNGRADES RECOMMENDATION ON SHARES OF CADENCE DESIGN TO SELL FROM HOLD (CDNS; 3.57):

CDNS posts third station destruction of $0.67, vs. EPS of $0.41, wider than our $0.27 waste estimate on higher-than-expected restructuring charges. Revenue fell 42% to $232 million, $5 the great body of the people below our forecast. CDNS has resolved its accounting issues and restated first quarter and second quarter results. However, it is mum searching for a new CEO and faces a difficult transition amid an economic recession. We see return declining in the next few quarters. We are widening our 2008 loss estimate to $0.93 from $0.37 and cut our 2009 estimate to loss of $0.45 from EPS of $0.01. We are reducing our target price by $0.50 to $3.50. -J. Yin

S&P DOWNGRADES STANLEY WORKS TO HOLD FROM STRONG BUY OPINION (SWK; 32.61):

With SWK dark 2008 EPS guidance to $3.30-$3.40, in advance of fourth quarter charges, $0.35-$0.45 lower than previously indicated, we are reducing our 2008 EPS estimate to $3.35, from $3.90. We believe market conditions for the company’s global industrial tools and conformation businesses are likable to be weaker next year. We see mid-single digit sales declines, and lower our 2009 EPS estimate to $3.20 from $4.00. Despite our view that SWK has a strong government, we are less confident of a market recoil in 2009, and we cut our target worth to $36 from $50 based on an 11.2 p-e, a bit above peers. -K. Leon-CPA

S&P MAINTAINS HOLD OPINION ON SHARES OF CIENA CORP (CIEN; 6.51):

October-quarter loss of $0.10, vs. $0.37, EPS misses our $0.04 EPS estimate on a 30% sequential sales decline, hurt by subside telecom expenditures. We see tighter telecom expenditure patterns persisting from one side most of 2009. Nevertheless, we remain positive on CIEN’s long-term prospects, given its hearty earnest spot in optical transport, that, in our view, is a critical component of the telecom industry’s radical growth driver of broadband services. We keep our 12-month mark price at $7, 0.6 times book value, in the lower regions peers, which we think adequately reflects CIEN’s near-term challenges. -A. Bensinger

S&P REITERATES HOLD OPINION ON SHARES OF ELI LILLY (LLY; 35.80):

LLY projects 2009 non-GAAP EPS of $4.00-$4.25 (subsequently $0.30-$35 dilution from Imclone acquisition) vs. indicated $3.97-$4.02 for 2008. Despite forex headwind, we see 7% sales growth in 2009, lifted by Imclone’session Erbitux oncology medicine and gains in Cymbalta and Cialis. Imclone is not expected to be accretive to cash EPS until 2012. We view LLY pipeline as forceful, with 59 projects, including for prasugrel temper thinner. However, LLY faces patent termination losses on five key products by 2011. We abide our target price at $40, a peer-level 9.6 times our 2009 EPS estimate. Dividend yield is 5.2%. -H. Saftlas

S&P REITERATES BUY OPINION ON ADSS OF BAIDU.COM (BIDU; 118.02):

BIDU preannounces a fourth quarter receipts be classed with a mid-point 14% below the mid-point of prior guidance. We lowered our forecasts in mid-November after revelations about BIDU’s material revenues from healthcare companies selling unlicensed products. We now trim our 2008 per-share profit forecast to $4.40 from $4.42, 2009’s to $6.03 from $6.12, and 2010’s to $8.23 to $8.35. Revenues are also being affected by an economic slowdown in China and the removal of what BIDU deemed questionable paid listings outside the health care kitchen-yard. Nonetheless, we think its shares are attractively valued. -S. Kessler

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