Updated June 28, 1999 12:01 am ET / Original July 16, 2019 10:24 am ET
The following companies are subjects of research reports issues by investment firms. Many of the reports listed may be purchased from The Investext Group, a division of Thomson Financial Services, at 800-662-7878 or www.investext.com , or are available through Dow Jones Interactive. Share prices at the time the report was issued and the date of the report are in parentheses.
Adtran (ADTN-NNM)
by Raymond James (32 1/4, June 9)
Buy . Adtran, based in Huntsville, Alabama, is a leading manufacturer of high-speed digital-transmission products used by telcos and end-users to facilitate advanced communication services over existing copper loop infrastructures. After successfully gaining market share (at the expense of price), Adtran is benefiting from higher unit volumes and stronger revenue growth.
American Home Products (AHP-NYSE)
by Gruntal (54, June 9)
We reiterate our Buy rating. At a Gruntal-sponsored institutional meeting, management outlined a bullish outlook for the company's new-product pipeline that represents the engine to potential acceleration in earnings growth post 1999. In our opinion, new products alone could add $6-$7 billion to peak annual top-line sales, equaling nearly 50% of total 1998 revenues.
Tables: Upgrades & Downgrades | New Coverage
American Tower (AMT-NYSE)
by Everen (24 1/2, June 11)
We reiterate our Outperformer rating, following the company's first-quarter earnings release. Although tower builds were lower than our aggressive estimate, we continue to be encouraged by the pace at which American Tower is approaching its build-to-suit strategy. Its quarter was characterized by solid revenue growth in each of its three business segments, which validates its strategy to become a multifaceted infrastructure company for the wireless carriers.
Ameristar Casinos (ASCA-NNM)
by Bear Stearns (3 1/4, June 7)
Neutral . The most significant risk to investors is the limited public float of the company's equity, due to the significant ownership by its president and CEO. Management has indicated its intentions to resolve this issue, at which point we would reconsider our investment rating, as the company's assets appear poised to deliver solid growth over the next few years.
Andrx (ADRX-NNM)
by Gruntal (65 3/4, June 9)
Strong Buy . Hoechst Marion Roussel, a division of Hoechst AG, has agreed to dismiss its patent-infringement suit against Andrx's generic version of Hoechst's Cardizem CD (an anti-hypertension medicine), a $700-million-a-year drug. Under the settlement, Hoechst will give Andrx a $50 million retroactive payment, representing forgone profits had Andrx marketed generic Cardizem CD. Our estimates have never included any retroactive payment, and thus we consider this settlement extremely bullish for Andrx. In addition to receiving $50 million this quarter, Andrx can now launch its own generic version of Cardizem CD with six months of generic market exclusivity. We estimate that 1999 sales of generic Cardizem CD will total $35 million. Andrx remains our top pick of mid to small-cap drug issues.
Caterpillar (CAT-NYSE)
by Lehman (58 7/16, June 16)
Caterpillar is poised to garner a higher valuation, based on lower earnings volatility driven by a reduced fixed-cost structure. We have initiated coverage with a Buy rating and a $75 price target.
C-Cor Electronics (CCBL-NNM)
by Josephthal (25 1/2, June 3)
Buy . C-Cor, a major supplier to the cable industry, recently announced plans to acquire Convergence.com and Silicon Valley Communications. We view both acquisitions favorably, as they should permit C-Cor to offer its customers a more complete line of network products and services. In addition, C-Cor's consolidated gross margins are expected to approach the 30% range, due to the higher gross margins associated with both acquisitions. Our 12-month price target is 35.
Check Point Software Technologies (CHKP-NNM)
Buy . We have increased our EPS projections as a consequence of what we regard as a very positive semiannual analyst meeting held by Check Point on June 3. We have raised our EPS estimates from $2.13 to $2.29 for this year and from $2.47 to $2.79 for 2000. At the same time, we have raised our 12-month target price from $50 to $70.
Circuit City (CC-NYSE)
by Credit Suisse/First Boston (90 3/8, June 17)
We have upgraded Circuit City from Buy to Strong Buy on the news that [its] DIVX [DVD system unit] will cease operations. Our target price is now $105.
eBay (EBAY-NNM)
by Sands Brothers (148 3/4, June 16)
The shares have fallen 37% from their 52-week high, including a one-day drop of 18% as a result of the decline in Internet stocks and the June 11 outage of its auction services. We believe these two factors have combined to create an unusual investment opportunity. Accordingly, we are initiating coverage with a Buy recommendation and a near-term price target around $175. The long-term fundamentals offer a compelling case for the company to be valued at a 50%-75% premium to other Internet leaders.
Equity Residential Properties Trust (EQR-NYSE)
by Deutsche Bank (47 7/16, June 5)
We consider Equity Residential Properties Trust to be the vanguard of the multifamily real-estate investment trust sector. Since its initial public offering in 1993, Equity Residential has set the standard, anticipated the trends, and capitalized on opportunity. We rate the shares Strong Buy , with a 12-month target price of $56, implying total return potential of 24%, including a 5.9% dividend yield.
Houghton Mifflin (HTN-NYSE)
by Rothschild (46 7/8, June 11)
Houghton Mifflin is particularly well-positioned to enjoy above-average earnings growth over the foreseeable future, based on both internal development programs and the promising environment in educational publishing. Over the next few years, the fiercely competitive educational publishing business will benefit from an expected significant increase in public funding, along with further steady growth in total student enrollments at all levels. In addition, the adoption cycle (the statewide textbook selection process) will be on an uptrend at least through 2002, which should further expand the market for new textbooks and supplemental materials (workbooks, study guides, testing material). Despite a sharp run-up in market prices since last fall, the solid outlook for Houghton Mifflin's business imparts a unique investment appeal to the outstanding common shares.
JDN Realty (JDN-NYSE)
by BT Alex. Brown (21 13/16, June 4)
Strong Buy . JDN Realty is on track to deliver another year of double-digit growth. JDN is considered the premier developer of strip shopping centers, anchored primarily by Wal-Mart, Lowe's and Kroger, in the Southeast. With strong tenant relationships, the company has reported an increasing backlog of development projects. At present, it has $355.2 million of assigned projects in the pipeline. We are raising our 12-month target price to $25. The total return potential translates into 21.8%, including the dividend yield of 7.2%.
MCI WorldCom (WCOM-NNM)
by Madison (90 3/8, June 16)
Buy . We are confident in our core revenue and EPS forecasts, which call for 20% and 40% growth rates, respectively, in 2000.
Merrill Lynch (MER-NYSE)
by Warburg Dillon Read (70, June 11)
Buy . Merrill has announced changes to its retail strategy, including a foray into discount online trading and various pricing packages, that indicate it plans to allow its customers greater flexibility. We think this flexibility, Merrill's superior product range (including first-rate research), and its strong brand name will enable the firm to continue to build its retail market share of U.S. household assets.
Midwest Grain Product s (MWGP-NNM)
by George K. Baum (11, June 9)
Midwest Grain Products continues to focus on developing and selling value-added, modified wheat gluten and starch products. Over time, we believe these products have the potential to transform the company from a rather commodity-based business to a specialty-product firm with higher margins and greater earnings consistency. Still, we believe this process will be gradual and that operating results will continue to be impacted by the direction of wheat gluten prices. Neutral .
Nucor (NUE-NYSE)
by JP Morgan (45 3/16, June 14)
Buy . To be sure, the recent abrupt management change has been a major distraction to investors (former CEO John Correnti was the Street's contact to Nucor) and management's slow public response to the change has punished the stock. However, we believe the stock's negative reaction is overdone, as Nucor's earnings outlook remains very positive and new CEO David Aycock has put to rest any wild speculation of a new high-risk diversification strategy. In our view, Nucor remains the premier steel producer, with the best balance sheet and growth opportunities of any U.S. steel company.
Pharmacia & Upjohn (PNU-NYSE)
by Gruntal (54 9/16, June 17)
We reiterate our Strong Buy rating. Pharmacia & Upjohn has just announced two positive deals that we believe will substantially enhance the new-product pipeline, product-technology platform and the valuation of PNU shares. These two deals further supplement the company's strategy to focus on both internal development and external acquisitions. Accordingly, we are adjusting our EPS estimates and our 12-month price target to $70 from $76.
Rexall Sundown (RXSD-NNM)
by Raymond James (11 15/16, June 16)
Accumulate . We are lowering EPS estimates for 1999 from $1.07 to 89 cents and for 2000 from $1.30 to $1.01. Accordingly, we have also lowered our forecasted growth rate from 20% to 15%. Rexall announced third-quarter EPS of 28 cents, three cents below consensus and four cents below our estimate of 32 cents. Revenues increased 13.4%, to $171.2 million, versus $151 million a year ago, which was $8.6 million below our estimate of $179.8 million.
St. Mary Land & Exploration (MARY-NNM)
by McDonald Investments (19 3/8, June 7)
Aggressive Buy . Our appraisal of the company's asset values indicates a liquidation price of $24.04 per share. Thus, the common stock is trading at only 80.6% of its take-out value. [Our 12-18-month price target] of $28 implies a price/net asset value ratio of 116.5%, which would place St. Mary Land & Exploration in the middle of the 110%-120% P/NAV range that the company has historically enjoyed.
Stewart Enterprises (STEI-NNM)
by Josephthal (30, June 11)
Buy . Stewart Enterprises reported second-fiscal-quarter (ending April 30) results with EPS on target with our estimate of 29 cents. EPS increased 16% on a 31% revenue gain. Twenty percent of revenues were foreign. This was the 31st consecutive fiscal quarter in which the company's EPS met or exceeded consensus estimates.
TCF Financial (TCB-NYSE)
by George K. Baum (27 3/4, June 8)
The current valuation (only 13.9 times our 1999 estimate, a nearly 20% discount to the average large regional bank) is unjustifiably low, given TCF's superior growth prospects. A smaller and more realistic valuation discount (about 16 times current-year earnings) generates a 12-month price target in the $37 area. We rate the stock a Strong Buy for capital gains and total return-seeking investors.
Wachovia (WB-NYSE)
by Warburg Dillon Read (87 3/4, June 1)
Buy . Wachovia, at 15.7 times our 2000 EPS estimate, is trading at only a slight premium to the regional bank group and below other quality regional banks such as Mellon, Wells Fargo, BB&T and First Tennessee, to name a few. Given Wachovia's rock-solid track record and conservative management style, we believe the stock should command a significant premium. Our 12-month price target is $105.
The following companies are subjects of research reports issues by investment firms.