- DEUTSCHE BANK (NYSE:DB): Buy. We are adjusting our MCD model for weaker Japan comps and a weaker dollar. We continue to have a buy rating on MCD supported by healthy global comp trends, low sensitivity to food inflation, and compelling valuation. Dow 30 Quarterly Earnings Season Preview>>
GENERAL ELECTRIC (NYSE:GE):
- MORGAN STANLEY (NYSE:MS): Mixed view. We expect GECS to show similar improvements to the last two quarters, GE industrial will remain weak as it sells through last years low margin blocking. But new/higher priced backlog is building and book/bill could positively surprise well above 1.0. Here’s How General Electric Got Away With Paying Zero Taxes>>
CVS CAREMARK (NYSE:CVS):
- GOLDMAN SACHS (NYSE:GS): Neutral. We believe that execution miscues, rooted in the subpar analytics we discussed in our report last week, are behind CVS’s recent soft results and volatile guidance. While we do not subscribe to the notion that every element of the venture yields superior economics, Caremark’s shortfalls do not directly reflect the fact that CVS owns the PBM.
- DEUTSCHE BANK (NYSE:DB): Bullish. The company is pursuing the right strategy of establishing its new corn and soybean platforms and rebuilding its reputation with farmers while raising prices only moderately despite record commodity prices. While Monsanto is leaving money on the table in the short-term, we believe its strategy will drive share gains and mid-teens EPS growth over the next 3 years.
- DEUTSCHE BANK: Bearish. We can’t ignore the long-term power of wholesale pricing on profits, especially assuming sugar and cocoa farmers plant more over time in reaction to high prices. But we retain our HOLD opinion as concern over 2012 elasticity and a 30% premium P/E valuation versus peers more than offsets solid fundamentals.
CONSTELLATION BRANDS (NYSE:STZ):
- CITI (NYSE:C): Needs time to breathe. Debt has been paid down, STZ’s balance sheet and cash flows are considerably healthier than they once were, giving the Board flexibility to approve a $500 million share repurchase program. Though its cash flow outlook and beyond is much improved, STZ’s wine business remains challenged as near-term market share weakness in tracked-channels reflects just how cost conscious the consumer remains. Constellation Brands: Your Cheat Sheet on the Earnings Beat>>
TOLL BROTHERS (NYSE:TOL):
- CITI: New York market is a growth engine. TOL said that its metro New York market is currently its best market in the country and TOL is raising prices every week there. High-rise apartment buildings comprise 15% of TOL’s current business and TOL is targeting to 10%-15% going forward.
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