Analysts’ opinions on stocks in the news Friday

From Standard & Poor’s Equity Research

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S&P REITERATES STRONG BUY OPINION ON SHARES OF GOOGLE INC (GOOG; 306.50):

Including stock-based compensation, GOOG posts fourth quarter EPS of $4.40 excluding a one-time impairment charge, vs. $3.79, fully above our $3.92 estimate. Revenues rose 18%, paced through GOOG’s websites. Forex negatively impacted growth by 550 basis points, no in addition than hedging aided EPS. Margins widened sequentially, as cost controls and cuts were implemented. We are raising our EPS estimates on the side of 2009 to $18.79 from $17.62, and 2010 to $21.68 from $21.10. However, given our more conservative longer-term FCF growth outlook, we are murky our 12-month target price to $450 from $500. -S. Kessler

S&P LOWERS OPINION ON SHARES OF HARLEY-DAVIDSON TO SELL FROM HOLD (HOG; 12.40):

HOG reports 6.8% subside fourth quarter revenues on shipment of 76,581 Harley-branded units, leading to EPS of $0.34, vs. $0.78, well in the regions of the dead our $0.58 value. High fixed costs and poor results in HOG’s financial services one led to the bottom line shortfall. HOG plans to cut 1,100 jobs through the whole extent of two years and to impair 2009 shipments by the agency of 10%-13%. We expect notably lower margins in 2009, possible worse than HOG forecasts. We see inconsiderable reason for any near-term improvement, and divide our 2009 EPS estimate to $1.75 from $2.58. We lessen our target price to $10 from $22 on EBITDA and p-e comparisons. -E. Kolb

S&P MAINTAINS HOLD OPINION ON SHARES OF ADVANCED MICRO DEVICES (AMD; 2.02):

AMD posts adjusted fourth quarter loss of $1.13, vs. $0.18 privation, much wider than our $0.41 loss estimate. Sales fell 35% from third quarter, reflecting weak shipments of microprocessors and graphics chips. Gross margin was far worse than expected, narrowing on a massive record write-down. Consequently, operating margins also savage. We widen our 2009 loss forecast by $0.18 to $2.65 on reduced margin expectation. We see continuing soft demand and sliding income, but we think planned reorganization and restructuring will help improve AMD’session monetary situation. We keep our 12-month mark price of $2.50. -C. Montevirgen

S&P DOWNGRADES OPINION ON SHARES OF MICROSEMI TO HOLD FROM BUY (MSCC; 10.37):

December-quarter EPS of $0.26, vs. $0.23, misses our estimate by dint of. $0.04. Revenues declined 3% from the third quarter, reflecting sleazy analog, but healthy high-reliability device sales. Gross margin was below our model, narrowing modestly from September-quarter. With expenses higher than expected due to stock-based compensation, operating margin fell. We are wounding our fiscal year 2009 (September) EPS estimate by $0.96 to $0.41 and our 12-month target cost by $14 to $12, based on our view of weak demand for non-high-reliability products, risks related to the investigation of the CEO’s diplomas and new sales strategies. -C. Montevirgen

S&P LOWERS OPINION ON SHARES OF CHIPOTLE MEXICAN GRILL TO STRONG SELL FROM HOLD (CMG; 50.05):

We now expect CMG determination likely experience lower customer traffic in 2009. We see competing reward discounting drawing traffic away, season drop employment makes expanding traffic during the lunch daypart again difficult. This marks a major change for CMG from robust traffic gains over the farther than several years. We think this will result in elimination of CMG’s valuation premium to peers. We lower our 2009 revenue growth forecast to 10% from 16%, and divide our EPS estimate by $0.20 to $2.30. Our revised DCF-based target price is $37, cut from $48, 16 times that value. -M. Basham

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