S&P Picks and Pans: News Corp., Toyota, BSX, Tyco, LVS

S&P MAINTAINS BUY OPINION ON CLASS B SHARES OF NEWS CORPORATION

NWS; $19.96

December-quarter EPS OF 27 cents, including 2 weeks of Dow Jones results, vs. 26 cents one year earlier is 2 cents below our estimate, but in line with Streets. We saw negative variance on equity affiliates, but note momentum across key TV networks, satellite TV, print, and Internet units. Film segment, while strong, was up against difficult comps. The company hiked its fiscal 2008 [June] EBIT growth estimate, excluding DJ, to mid-teens from low teens. We see key profit milestones for Sky Italia and MySpace, aided by Google (GOOG) pact. The company rules out play for Yahoo (YHOO). Our target price stays $25./T. Amobi, CPA, CFA

S&P UPGRADES OPINION ON ADSS OF TOYOTA MOTOR TO BUY FROM HOLD

TM; $105.73

Toyota posts in-line December-quarter net income of JPY 459 billion vs. JPY 427 billion. We see sales for fiscal 2009 [Mar.] rising 7% to JPY 28.3 trillion on higher global automotive volume and financial services. Emerging market growth should outweigh near-term challenges from developed markets. We are raising our fiscal 2009 earnings per ADS estimate by 18 cents to $11.89 [based on 106.7 JPY/$1], aided by weakening U.S. dollar. But we are cutting our target price by $10 to $131 on revised historical and peer P/E analyses. We see favorable long-term growth prospects, a strong balance sheet and rising dividends. /E. Levy, CFA

S&P KEEPS HOLD OPINION ON SHARES OF BOSTON SCIENTIFIC

BSX; $12.78

Fourth-quarter operating EPS of 12 cents vs. 11 cents one year earlier was 3 cents above our forecast in another quarter highlighted by many special charges and credits. We attribute the upside to our forecast to a lower-than-expected tax rate. BSXs 1% currency-neutral sales gain was modestly below our estimate. After recent asset sales, we see 2008 revenues of about $8.0 billion, but raise our operating EPS estimate by 10 cents to 60 cents on higher-margin assumption. We boost our 12-month target price by $2 to $14, a modest 2008 P/E premium to peers on expected margin recovery and M&A speculation in consolidating device group. /R. Gold

S&P REITERATES HOLD OPINION ON SHARES OF TYCO INTERNATIONAL

TYC; $39.25

December-quarter EPS of 73 cents vs. 49 cents one year earlier, both before one-time items, is 3 cents above our estimate, which we increased last month after Tyco raised its guidance. Tyco recorded notable profit growth in its flow control business and what we view as a solid profit gain at its ADT security business. We still expect $2.70 EPS in fiscal 2008 [Sep.] and $3.00 in fiscal 2009. We see flow control remaining strong on robust demand from key energy and water markets, and think Tyco finally seems to be improving efficiency at ADT. We keep our 12-month target price of $42, based on relative P/E analysis. /M. Jaffe

S&P MAINTAINS SELL RECOMMENDATION ON SHARES OF LAS VEGAS SANDS

LVS; $87.84

Adjusted fourth-quarter EPS of 20 cents, vs. 37 cents, misses our 42 cent estimate, mostly on depreciation greater than our view while EBITDA exceeded our forecast. Las Vegas results were better than our forecast, but Macao missed our recently reduced view. On more favorable commission structure to junket reps, which would bring the companys proposition closer to others, we think Macao property trends could improve. While we cut our 2008 EPS estimate 53 cents to $1.77 on higher depreciation, lower revenue and revised Four Seasons Cotai assumption, we keep our $83 target price on a revised blend of peer valuations. /E. Kwon, CFA

S&P REITERATES HOLD OPINION ON SHARES OF NATIONAL SEMICONDUCTOR

NSM; $19.02

National Semi lowers February-quarter guidance, and now expects revenues of $450-$455 million, down 9%-10% from the November quarter, worse than previous guidance of sales down 1%-5%. It attributes this less optimistic view to lower-than-anticipated shipments to global original equipment manufacturers and handset customers. National Semi now sees gross margin of 63%, also lower than previous expectations. We are concerned about slower sales ahead, but think announced cost cuts should aid long-term profits. We reduce our February-quarter EPS estimate by 4 cents to 27 cents on the news. The company will report results on March 6, /C. Montevirgen