August 14, 2008
Analyst Actions: Nvidia, Applied Materials, Tween Brands
NVIDIA CORP. (NVDA)
Oppenheimer reiterates outperform
APPLIED MATERIALS, INC. (AMAT)
Needham ups estimate, but keeps hold
Applied Materials posted better-than-expected third-quarter results. Needham analyst Y. Edwin Mok says that AMAT, with a an in-line third quarter report, surprised the Street with strong silicon order guidance. Mok notes, while AMAT believes it has passed the trough of the semi-equipment cycle, it maintains a cautious view and expects a modest recovery in calendar 2009, which is in line with his sector view. He says display orders are falling off with the end of an investment cycle. In solar, previous acquisitions are starting to pay dividends with revenue growth. But while the business overall is gradually improving, he believes limited leverage prevents strong EPS growth. He increased his 76 cents fiscal 2008 [Oct.] EPS estimate to 78 cents. He maintains his hold opinion with a $20 price target.
TWEEN BRANDS, INC. (TWB)
Citigroup cuts to sell from hold
Tween Brands posted a second-quarter loss. Citigroup analyst Kimberly Greenberger says the second-quarter loss of 27 cents compares to her estimate for a loss of 2 cents and Wall Streets consnesu forecast of a 1-cent loss. Greenberger says the difference is due to an 8% decline in comparable-store sales, and worse gross margin and SG&A expense. She believes the companys plan for a full conversion from Limited Too stores to Justice could be an overreaction to the second-quarter miss. She thinks Tween could have captured more value by selling its Limited Too chain to strategic or private equity buyers instead of effectively closing the chain. Greenberger says she would have preferred a combination of selective conversion of Limited Too stores, additional Limited Too closures, and the ongoing operation of 200-400 Limited Too stores. She cut her $1.76 fiscal 2009 [Jan.] EPS estimate to 70 cents, her $2.10 fiscal 2010 forecast to 90 cents, and her $21 price target to $9.