Analysts’ opinions on stocks in the news Friday

From Standard & Poor’sitting Equity Research

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S&P REITERATES SELL OPINION ON SHARES OF GENERAL MOTORS (GM; 4.40):

As expected, the U.S. government approved loans to GM and Chrysler. However, the loans are just a temporary bridge until Mar. 31, when the automakers sourness show plans as far as concerns long-term viability, including concessions from industry participants such while debtors and unions, or repay the loans. We expect GM to quickly run from one side the funds and to exigency additional multi-billion dollar funding just to meet 2009 needs for the time of what looks like an auto depression. We view the news as good for suppliers, as it provides a lifeline to automakers, but labor outlook fragments extremely challenging. -E. Levy, CFA

S&P MAINTAINS BUY OPINION ON RESEARCH IN MOTION (RIMM; 40.23):

RIMM posts November-quarter EPS of $0.83, vs. $0.65, a penny above our recently lowered estimate. Revenues were in line with our reduced forecast, hurt as expected by the late rollout of a new smartphone and by forex. RIMM’s strong reward leadership for February-quarter indicates to us its new products are in demand, but will pressure gross margins more than we expected. We are lowering our fiscal year 2010 (February) EPS calculate by $0.15 to $3.75, but up 10% from our fiscal year 2009 estimate. Despite slightly slower growth prospects, we maintain our p-e-based target value of $51 and eye RIMM’s balance sheet as a positive. -T. Rosenbluth

S&P MAINTAINS BUY RECOMMENDATION ON SHARES OF ORACLE CORP. (ORCL; 16.61):

November-quarter operating EPS of $0.32, vs. $0.30, is in line with our explore. Sales rose 6% to $5.69 billion, modestly below our $5.73 billion forecast, given to reflection forex impact. Licenses lay low 3%, but non-GAAP maintenance extension of 15% was above our survey. Operating margins widened notably. We continue to view ORCL as one of the greater degree of defensive software vendors given its operating leverage, maintenance streams, and cash flows. We trim our fiscal year 2009 (May) EPS value $0.02 to $1.43 and fiscal year 2010’s by the agency of $0.01 to $1.60, adhering a higher projected demand rate and lower interest income. We keep our mark price of $20. -Z. Bokhari

S&P LOWERS RECOMMENDATION ON SHARES OF DARDEN RESTAURANT TO HOLD FROM BUY (DRI; 27.56):

November-quarter EPS of $0.42, vs. $0.30, slightly exceeds our $0.41 estimate. DRI’s 0.2% same-store sales decline for the quarter was substantially more usefully than DRI’s peer group, reflecting marketshare gains. However, we lower our fiscal year 2009 (May) same-store outlook from flat to -1%, and cut our EPS set a price on by $0.20 to $2.55. We also trim our fiscal year 2010 valuation through $0.25 to $2.75. On revised DCF analysis to reflect higher debt levels, we lower our 12-month target price by $4 to $30. And with DRI having nearly doubled since the Nov. 20 S&P 500 low, we see the shares as near appropriate value. -M. Basham

S&P REITERATES SELL RECOMMENDATION ON SHARES OF ELECTRONIC ARTS (ERTS; 17.31):

ERTS sets another 400 cut in its workforce, for a total of 1,000, and closure of at least nine facilities as part of its restructuring plan. The company expects to redeem $120 the multitude in annual operating expenses and will take $55-$66 million in restructuring charges. We believe the increased staff reduction and a profit warning from a competitor shadow forth that the slowdown in the video game busy vigor is more keen than previously seen. However, we raise our fiscal year 2010 (March) EPS estimate by $0.05 to $0.48 on lower operating expenses, in some measure offset by means of lower revenues. We withhold our mark price of $15. -J. Yin

S&P MAINTAINS SELL OPINION ON SHARES OF M&T BANK (MTB; 56.89):

MTB agrees to acquire Provident Bankshares (PBKS; 9.33, NR) in a stock-for-stock transaction valued at $401 million, pending indispensable thing approvals. We think the transaction would fit strategically, expanding branches in MTB’s Maryland and Virginia footmark and adding roughly $4.5 billion in deposits. We rate highly the do business at 1.4 times PBKS’s corporeal part value, and think the price is expensive, given the current environment and the roughly $650 million of additional loan writedowns MTB plans to take at closing. We are also wary of a possible require for every additional first-class raise.-S. Plesser

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