- BARCLAYS (NYSE:BCS): Fall iPhone launch makes sense. We continue to believe that Apple’s valuation is attractive and that the shares can benefit from strong iPad and iPhone demand, Mac shares gains, significant international expansion, and a pipeline of new innovations. Apple has been historically very methodical with its annual product launches and we don’t expect the company to “skip” a product cycle this year either. However, we believe a later iPhone launch for 2011 makes sense given the timing of next generation wireless technology, the availability of components and the coordination of the launch with new services.
TEXAS INSTRUMENTS (NYSE:TXN):
- DEUTSCHE BANK (NYSE:DB): NSM deal is a positive. The deal makes long-term strategic sense for TXN and clearly creates much needed share holder value for NSM but we do question the 78% premium and TXN’s ability to accelerate NSM growth. We view TXN stock as fairly valued at these levels and hence maintain our hold rating.
- BARCLAYS (NYSE:BCS): Management expects the $6.5 billion deal to exceed their cost of capital within 3-4 years with the deal expected to be earnings accretive in the first year.
NATIONAL SEMICONDUCTOR (NYSE:NSM):
- CITI (NYSE:C): Upgrade. The deal is expected to close in six to nine months pending approval from regulators and NSM share holders. We see little risk of regulatory approval and would expect NSM share holders to readily tender shares given NSM’s recent growth and execution challenges.
- DEUTSCHE BANK (NYSE:DB): American Airlines deal has unclear long-term implications. American inventory was removed from Expedia sites since Jan.1 so this understanding at least on a temporary basis, will now put American airline tickets back on EXPE.
- UBS (NYSE:UBS): Market will react positively. AMR and EXPE were both hurt by not working with each other so the market is likely to react positively to this release. However, the extent to which this deal is good news for either or both is really impossible to assess with public information. Our guess is that AMR got some concessions from EXPE but ot all of what is wanted.
GUESS? INC (NYSE:GES):
- CITI (NYSE:C): Optimistic stock. While GES is well positioned in Europe and has a strong growth profile in Asia, we see product issues in the U.S. that could require a multi quarter fix. 1Q11 guidance is likely achievable, though full-year guidance assumes an improvement in gross margin trends in the back half and SG&A growth well below the rate of unit growth.