BloggingStocks

Analyst upgrades: SHPGY, JCP, VISN, NOV, X, APOL

Eric Buscemi — 2008-06-23T11:30:00+00:00

Filed under: Analyst upgrades and downgrades, Penney (J.C.) (JCP), U.S. Steel (X)

MOST NOTEWORTHY: Shire Plc, J.C. Penney and VisionChina Media were today's noteworthy upgrades:

Goldman upgraded shares of Shire Plc (NASDAQ: SHPGY) to Buy from Neutral on expectations for share gains in the second half of 2008 following the launch of Vyvanse in adults. Goldman also added the stock to the Conviction Buy List.
Deutsche Bank raised J.C. Penney (NYSE: JCP) to Buy from Hold after channel checks indicated recent sales trends have improved. The firm finds the risk/reward compelling at current levels with a $46 target.
Oppenheimer upgraded shares of VisionChina Media (NASDAQ: VISN) to Outperform from Perform following the recent pullback, after channel checks indicated the company is seeing greater traction with larger advertising clients.

OTHER UPGRADES:

National Oilwell Varco (NYSE: NOV) was upgraded to Sector Perform from Underperform.
Goldman added US Steel (NYSE: X) to the Conviction Buy List.
Apollo Group (NASDAQ: APOL) was upgraded at ThinkPanmure to Buy from Accumulate.

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Before the bell: BCE, HAL, MOT, FSLR, GOOG, AAPL, MO ...

Melly Alazraki — 2008-06-23T08:21:00+00:00

Filed under: Before the bell, Analyst reports, Analyst upgrades and downgrades, Deals, Google (GOOG), Apple Inc (AAPL), Motorola (MOT), Halliburton (HAL), Nokia Corp. (NOK), Penney (J.C.) (JCP), Altria Group (MO)

Before the bell: Wall Street set to rebound boosted by deals

BCE Inc. (NYSE: BCE) shares are jumping over 10% in premarket trading after Canada's Supreme Court overturned a Quebec Court decision, clearing the way for the $52 billion leveraged buyout by Ontario Teachers' Pension Plan and U.S. private equity firms. The buyers might still negotiate the price down though.

Halliburton (NYSE: HAL) withdrew a $3.6 billion offer for Britain's Expro International after the U.K. oil services firm stuck by a smaller bid from a private-equity consortium.

Some analyst calls this morning:

J.C. Penney Co. (NYSE: JCP) was upgraded by Deutsche Bank to Buy from Hold and the price target upped to $46 from $45.
Motorola Inc. (NYSE: MOT) was downgraded by Piper Jaffray to Sell from Neutral on continued weakness in North American market. The target price was cut to $7 from $9.75. Shares are down over 2% in premarket trading.
First Solar (NYSE: FSLR) price target was upped at Lehman Brothers from $280 to $335. Shares are up over 2.5% in premarket trading.

The Wall Street Journal reports that Google Inc. (NASDAQ: GOOG), which along with more than 30 partners announced in November a plan for new handsets based on the Android mobile software to be out by the second half of this year, now says that the handsets won't arrive until the fourth quarter. And even this belated schedule is a problem for some of its partners.

Meanwhile, Softbank, the carrier that would distribute Apple Inc. (NASDAQ: AAPL)'s iPhone in Japan, said Monday it will sell for 23,040 yen, or $215. But the discount isn't so obvious as Softbank said people will get a discount in their mobile phone bills that will calculate to their paying $215 for the iPhone over two years.

Nokia (NYSE: NOK) said on Monday it would buy social networking start-up Plazes -- a smaller rival to services like Twitter and Jaiku -- as it tries to expand into Internet services. The price was not disclosed.

Altria Group Inc (NYSE: MO)'s Philip Morris USA has cancelled its Marlboro Ultra Smooth cigarettes in a move firther highlighting its challenges to grow its tobacco business as U.S. cigarette sales decline, according to The Wall Street Journal.

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Early analyst calls (MOT) (JCP)

Douglas McIntyre — 2008-06-23T07:41:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Motorola (MOT), International Business Machines (IBM), Penney (J.C.) (JCP)

Deutsche Bank upgraded department store J.C. Penney (NYSE:JCP) to "buy" from "hold" according to MarketWatch.

Piper Jaffray downgraded Motorola (NYSE:MOT) to "sell" from "neutral", according to Briefing.com. The news service also reports that Lehman raised its price target on First Solar (NASDAQ:FSLR) to $335 from $280.

IBM (NYSE: IBM) was raised to "outperform" at BMO Capital Markets, according to 24/7 Wall St.

Douglas A. McIntyre is an editor at 247wallst.com.

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JCPenney (JCP) rises on good retail earnings

Brent Archer — 2008-05-28T14:36:00+00:00

Filed under: Good news, Industry, Penney (J.C.) (JCP), Options, Technical Analysis, Polo Ralph Lauren'A' (RL)

JCPenney (NYSE: JCP) shares are trading higher after Polo Ralph Lauren (NYSE: RL) announced that its fourth-quarter profit jumped 41% to $1 a share, well above analysts' estimates of 65 cents per share. RL's results were helped by the launch of the American Living line at JCP, which shows that shoppers are still buying at department stores. Also, other positive retail results from stocks like Dollar Tree (NASDAQ: DLTR) are also lending a hand. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on JCP.

After hitting a one-year high of $82.49 in June, the stock hit a one-year low of $33.27 in January. JCP opened this morning at $41.16. So far today the stock has hit a low of $40.68 and a high of $42.18. As of 1:00, JCP is trading at $40.91, up $0.41 (1.0%). The chart for JCP looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $30 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just three months as long as JCP is above $30 at August expiration. JCP would have to fall by more than 27% before we would start to lose money.

JCP hasn't been below $33 at all in the past year and has shown support around $38 recently. This trade could be risky if the company's earnings (due out in mid August) disappoint, but even if that happens, this position could be protected by the support the stock might find around $28, where it bottomed out in March and April.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in JCP, RL, or DLTR.

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Earnings highlights: Deere, Freddie Mac, Applied Materials, Barclay's and others

Trey Thoelcke — 2008-05-17T16:10:00+00:00

Filed under: Earnings reports, Home Depot (HD), Penney (J.C.) (JCP), Applied Materials (AMAT), Amer Intl Group (AIG), Lowe's Cos (LOW), Kohl's Corp (KSS), Toll Brothers (TOL), Deere and Co (DE), Barclays plc ADS (BCS), MBIA Inc (MBI)

Here are some highlights from this past week's earnings coverage from BloggingStocks:

Applied Materials Inc. (NASDAQ: AMAT) Q2 profits declined on a glut of flash memory chips.
Bally Technologies Inc. (NYSE: BYI) beat Q3 expectations and offered full-year guidance.
Barclay's (NYSE: BCS) reported a big Q1 loss on credit-related write-downs.
Constant Contact Inc. (NASDAQ: CTCT) saw big increases in Q1 revenues and in its customer base.
Deere & Co. (NYSE: DE) Q2 profits rose on international demand, but results just missed estimates.
Fluor Corp.'s (NYSE: FLR) strong Q1 results are a signal for the energy sector, says Jim Cramer.
Freddie Mac (NYSE: FRE) Q1 loss widened on the housing slump, but not as much as forecast.
IndyMac Bancorp Inc. (NYSE: IMB) narrowed its loss but predicted it wouldn't see a profit in 2008.
LDK Solar Co. Ltd. (NYSE: LDK) Q1 earnings topped forecasts and it raised its outlook.
MBIA Inc. (NYSE: MBI) reported a larger-than-expected Q1 loss due to write-downs.
Mindray Medical International Ltd. (NYSE: MR) beat Q1 expectations and raised its full-year guidance.
Nuance Communications Inc. (NASDAQ: NUAN) Q2 earnings were in line with analysts' expectations.
ON Semiconductor Corp. (NASDAQ: ONNN) beat Q1 expectations and raised its Q2 revenue forecast.
RealNetworks Inc. (NASDAQ: RNWK) beat Q1 estimates and announced share buybacks and a spin off.
Salary.com Inc. (NASDAQ: SLRY) missed Q1 forecasts, leading to analysts' downgrades.
Sykes Enterprises Inc. (NASDAQ: SYKE) beat Q1 estimates and raised its Q2 and full-year forecast.
Syniverse Holdings Inc. (NYSE: SVR) beat Q1 expectations on strength in "messaging and mobil data."
Toll Brothers Inc. (NYSE: TOL) warned of lower Q2 profits and more "challenging times" ahead.
Website Pros Inc. (NASDAQ: WSPI) reported flat earnings despite soaring revenues and operating income.

Also, after AIG's (NYSE: AIG) dismal results, International Lease Finance Corp. wants to be spun off from its parent. Analysts see JC Penney Inc. (NYSE: JCP), Kohl's Corp. (NYSE: KSS) and the rest of the retail sector rebounding in the latter half of the year. Jim Cramer ponders some suprising responses to so-so earnings reports, and looks ahead to Lowe's (NYSE: LOW) and Home Depot (NYSE: HD) as a sign for the housing sector.

Other upcoming results to watch for include Campbell Soup (NYSE: CPB), Autozone (NYSE: AZO), Hewlett-Packard (NYSE: HPQ), Intuit (NASDAQ: INTU), Staples (NASDAQ: SPLS), Target (NYSE: TGT), Limited Brands (NYSE: LTD) The Gap (NYSE: GPS) and Barnes & Noble (NYSE: BKS).

Visit AOL Money & Finance for more earnings coverage.

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Earnings highlights: Wal-Mart, Macy's, Sony, Sprint, Sirius, Whole Foods and others

Trey Thoelcke — 2008-05-17T09:40:00+00:00

Filed under: Earnings reports, Wal-Mart (WMT), Home Depot (HD), XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI), Sprint Nextel Corp (S), Sony Corp ADR (SNE), Penney (J.C.) (JCP), Blockbuster Inc 'A' (BBI), Whole Foods Market (WFMI), Tiffany and Co (TIF), Amer Intl Group (AIG), Lowe's Cos (LOW), Kohl's Corp (KSS), Electronic Arts (ERTS), Nordstrom, Inc (JWN), Liz Claiborne (LIZ), Nissan Motors (NSANY)

Here are some highlights from this past week's earnings coverage from BloggingStocks:

AnnTaylor Stores Corp. (NYSE: ANN) sees Q1 profits beating estimates but reaffirmed the full-year outlook.
Blockbuster Inc. (NYSE: BBI) beat Q1 earnings expectations but fell short of revenue estimates.
Electronic Arts Inc. (NASDAQ: ERTS) posted strong Q4 and full-year results on titles such as Rock Band.
Fossil Inc. (NASDAQ: FOSL) forecast Q1 earnings just a penny below analysts' estimates.
IMAX Corp. (NASDAQ: IMAX) doubled its Q1 loss and missed Wall Street's expectations.
JC Penney Co. Inc. (NYSE: JCP) profits fell 50%, and it predicted trouble would continue through the year.
Kohl's Corp. (NYSE: KSS) posted a smaller-than-estimated Q1 profit decline and cut its full-year outlook.
Liz Claiborne Inc. (NYSE: LIZ) swung to a Q1 loss on restructuring but beat analysts' expectations.
Lumber Liquidators Inc. (NYSE: LL) posted strong Q1 results despite the housing slump.
Macy's (NYSE: M) beat low Q1 expectations despite weak same-store sales.
Nissan Motor Corp. (NASDAQ: NSANY) Q4 profit surged but it warned of lower profits this year.
Nordstrom Inc. (NYSE: JWN) posted smaller-than-estimated Q1 profit decline and cut its full-year outlook.
Priceline.com Inc. (NASDAQ: PCLN) beat Q1 expectations due to increased bookings.
Sirius Satellite Radio Inc. (NASDAQ: SIRI) posted a narrower Q1 loss in line with expectations.
Sony Corp. (NYSE: SNE) swung to a Q4 profit but fell short of Wall Street estimates.
Sprint Nextel Corp. (NYSE: S) beat low Q1 estimates as its loss widened on charges and lost subscribers.
Tiffany & Co. (NYSE: TIF) projected beating Q1 earnings forecasts and raised its dividend.
Wal-Mart Stores Inc. (NYSE: WMT) posted Q1 profits up on international growth and bargain shoppers.
Whole Foods Market Inc. (NASDAQ: WFMI) Q2 profits fell due to the Wild Oats acquistion.
XM Satellite Radio (NASDAQ: XMSR) reported a bigger-than-expected Q1 loss and a surge in subscribers.

Also, after AIG's (NYSE: AIG) dismal results, International Lease Finance Corp. wants to be spun off from its parent. Analysts see JC Penney, Kohl's and the rest of the retail sector rebounding in the latter half of the year. Jim Cramer ponders some suprising responses to so-so earnings reports, and looks ahead to Lowe's (NYSE: LOW) and Home Depot (NYSE: HD) as a sign for the housing sector.

Visit AOL Money & Finance for more earnings coverage.

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Analyst downgrades: Department store sector, SNDK and CNET

Eric Buscemi — 2008-05-16T11:38:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Penney (J.C.) (JCP), Regions Financial (RF), Kohl's Corp (KSS), Nordstrom, Inc (JWN), SanDisk Corp (SNDK)

MOST NOTEWORTHY: The Department store sector, SanDisk and CNET Networks were today's noteworthy downgrades:

Goldman downgraded the department store sector to Neutral from Attractive after raising its 2008 oil forecast to $149 from $115, as it believes higher gas prices will impact consumer discretionary spend and sentiment. Goldman downgraded JC Penney (NYSE: JCP) and Nordstrom (NYSE: JWN) to Neutral and also removed Kohl's (NYSE: KSS) from its Conviction Buy List.
JMP Securities downgraded SanDisk (NASDAQ: SNDK) to Underperform from Market Perform based on increased competition in NAND, a potential decline in royalty income, valuation, and lack of catalysts from flash-based solid state drives.
CNET Networks (NASDAQ: CNET) was cut to Neutral from Buy at Banc of America following the tender offer from CBS (NYSE: CBS).

OTHER DOWNGRADES:

Merrill downgraded Regions Financial (NYSE: RF) to Sell from Neutral.
B. Riley downgraded Exar (NASDAQ: EXAR) to Neutral from Buy.
Albermarle (NYSE: ALB) was lowered to Neutral from Overweight at JP Morgan.

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Before the bell: JCP, WMT, AAPL, GM, GOOG, MSFT ...

Melly Alazraki — 2008-05-16T08:14:00+00:00

Filed under: Before the bell, Analyst reports, Analyst upgrades and downgrades, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), Wal-Mart (WMT), General Motors (GM), Toyota Motor Corp. (TM), Penney (J.C.) (JCP), Kohl's Corp (KSS), Nordstrom, Inc (JWN)

Before the bell: Futures higher ahead of housing data

Goldman Sachs cut its view of U.S. department stores to Neutral from Attractive. Specifically, the broker downgraded J.C. Penney (NYSE: JCP) and Nordstrom Inc. (NYSE: JWN) to Neutral from Buy after its commodity team upped 2008 oil price forecasts to $149 a barrel.
Still, Goldman upgraded TJX Cos. (NYSE: TJX) to Buy from Neutral and removed Kohl's Corp. (NYSE: KSS) from its conviction-buy list in favor of Wal-Mart Stores Inc. (NYSE: WMT).

By now I'm getting confused with all the deals Apple Inc. (NASDAQ: AAPL) is signing with wireless operators to sell the iPhone in different countries around the world. I believe the past two weeks we heard of at least two deals, including one with a S.Korean company. Today, French wireless operator Orange said it has signed a deal to sell its iPhone in the Middle East, Africa and several European countries. Orange will be the exclusive iPhone provider in Belgium and Romania. It seems that by now Apple's got the world covered.

General Motors Corp. (NYSE: GM) is apparently considering launching its Chevrolet brand in South Korea. In its attempt to stay ahead of fast growing Toyota (NYSE: TM), GM will try to capture a larger share of S.Korea's growing market for imported cars.

As Yahoo! (NASDAQ: YHOO) is trying to keep Icahn off its board back, it keeps talking about a search advertising partnership with Google Inc (NASDAQ: GOOG), according to a Reuters source.

And Microsoft (NASDAQ: MSFT) also keeps to other business these times. The software giant joined The One Laptop Per Child project as the green-and-white "XO" computers now can run Windows in addition to their homegrown Linux-based interface. This could further the cause of the organization.

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Early analyt calls (JCP) (COST) (SNDK)

Douglas McIntyre — 2008-05-16T07:41:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Penney (J.C.) (JCP), Costco Wholesale (COST), Nordstrom, Inc (JWN), SanDisk Corp (SNDK)

Goldman Sachs cut the ratings on J.C. Penney (NYSE:JCP) and Nordstrom (NYSE:JWM) from "buy" to "neutral" due to the rising price of oil, according to MarketWatch.

Morgan Stanley began CostCo (NASDAQ:COST) at "equal weight" according to Briefing.com. The news service also reports that JPM downgraded Sandisk (NASDAQ:SNDK) from "market perform" from "underperform".

Douglas A. McIntyre is an editor at 247wallst.com.

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JC Penney (JCP) gets hit by economic slowdown, but beats analyst estimates

Michael Fowlkes — 2008-05-15T12:31:00+00:00

Filed under: Earnings reports, Forecasts, Good news, Management, Penney (J.C.) (JCP), Recession

Retail giant JC Penney (NYSE: JCP) reported its first quarter numbers this morning, and reported that the current economic environment led to a pretty hefty 50% drop in its net income.

The company stated that the cut back in consumer spending was to blame for the drop in net income, and predicted that the tough times were far from over. In its earnings report, the company estimated that the difficult times could easily last for the remainder of the year.

Despite the 50% drop in income, and poor business outlook for the rest of the year, the stock is actually in the green today, as traders have pushed shares of the retailer up 1.7% to $45.01, up $0.76. The reason... the company was able to beat Wall Street estimates.

Going into today's report, analysts had been looking to see the company show earnings of 50 cents a share, and the actual numbers were a bit higher, at 54 cents a share for the quarter. This has given the bulls a reason to come in and drive the stock higher, despite a lower than expected revenue number. Analysts had been looking to see revenues of $4.17 billion, and the actual number was a bit under at $4.13 billion.

Also helping give the stock a lift today was the company's forecast of 38 cents a share for the second quarter, which was a penny higher than analysts had been expecting to see.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.

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Macy's Q1 beats analysts, but don't expect me to buy the stock

Steven Mallas — 2008-05-15T09:33:00+00:00

Filed under: Earnings reports, Wal-Mart (WMT), Target Corp. (TGT), Penney (J.C.) (JCP), Sears Holdings (SHLD)

Retailer Macy's (NYSE: M) first fiscal quarter wasn't that bad, at least in terms of the analyst game. The company, which competes with mall colleagues such as J.C. Penney (NYSE: JCP) and Sears (NASDAQ: SHLD), reported net income of 2 cents per diluted share from continuing operations. The denizens of Wall Street thought the company would lose 2 cents, so management came ahead in this regard by four pennies. Bravo!

However, does this news excite me? Not necessarily. Macy's needs a little help in its sales department. First, the overall top line declined almost 3%, coming in at $5.7 billion. Second, and perhaps even more telling, same-store sales were weak during the quarter, decreasing by 2.6%. And then there's the issue of cash flow. Operational cash flow from continuing operations was excellent compared with last year's quarter since $21 million was generated this time around as opposed to $370 million being used last time around. Nevertheless, when you take into account capital spending, no free cash flow was left over in the first quarter. And cash has been decreasing on the balance sheet. Oh, and gross margin went down, too.

I wasn't too taken by Macy's current earnings report, and I'm not putting the company on my list of investment ideas right now, even though the stock closed up yesterday on the news (heck, the company didn't repurchase any shares last quarter and stated that it didn't see any more share repurchases coming for the rest of the year, so apparently the stock isn't on management's ideas list, either). I think there might be better retail investments out there, such as Wal-Mart (NYSE: WMT) or Target (NYSE: TGT). Yes, the retailer may have strong associations with Donald Trump and Martha Stewart, but I will not be blinded by such celebrity value.

Disclosure: I don't own shares in any company mentioned here; positions can change at any time.

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Why your taxes are going up, jumbo loan rates decline & best places to live - Today in Money 5/15

Allan Halprin — 2008-05-15T09:02:00+00:00

Filed under: Google (GOOG), Yahoo! (YHOO), General Electric (GE), Time Warner (TWX), Penney (J.C.) (JCP), Money and Finance Today, CBS Corp 'B' (CBS), Countrywide Financial (CFC), Research in Motion (RIMM), Merck and Co (MRK), Contl Airlines'B' (CAL), UAL Corp (UAUA)

In the News:

· CBS Buying CNet for $1.75 Billion

· GE Looks to Exit Appliance Business

· Carl Icahn Looking to Crash Yahoo's Board

· Vioxx Verdict Against Merck Overturned

· ComScore Puts Google Sites at No. 1 For First Time; Surpassing Yahoo

· United Discussing Alliance With Continental Airlines

· J.C. Penny 1Q Profit Plunges 50%

· Countrywide Fraud Lawsuit Moves Forward

· Time Warner Spinoff Reveals Hidden Value

· Touchscreen BlackBerry Coming Soon

· Gas Prices Rise 12% Over Past Month

Charlotte, NC Named Best Place to Live
Apparently, there's just something about North Carolina. For the second year in a row, America's best city in which to live lies within its borders, according to Relocate-America.com's annual list. This year, Charlotte, N.C., is in the top spot, the site announced this week. Last year's winner was Asheville, N.C., which slipped to No. 7 on this year's list. Other top places are runner-up San Antonio, TX, Chattanooga, TN, Greenville, SC and Tulsa, OK.
Charlotte dethrones Asheville, N.C., as best place to live - MarketWatch

Jumbo Loan Rates Finally Decline
The interest rates for jumbo mortgage loans are coming down, but standards for qualifying are much tighter.
Jumbo loan rates finally decline - Bankrate.com

Why Your Tax Rate Is Going Up
Taxes are likely to head higher. And that could derail your retirement plan. Here's how to protect yourself.
Revell on retirement: Why your tax rate is going up - CNNmoney

Wedding Loans
Borrowing money to pay for a wedding is one of the biggest financial mistakes a couple can make.
Wedding Loans: Till Death Do You Owe s - TheStreet.com

Choosing the Right Smartphone for You
Move over iPhone. For email addicts or those on a budget, here's how to choose the right smartphone.
Slideshow: Choosing the Right Smartphone for You - SmartMoney

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Before the bell: Futures higher as investors await data

Melly Alazraki — 2008-05-15T07:37:00+00:00

Filed under: Before the bell, Earnings reports, Deals, Microsoft (MSFT), Yahoo! (YHOO), General Electric (GE), Market matters, Penney (J.C.) (JCP), Blockbuster Inc 'A' (BBI), Kohl's Corp (KSS), Economic data, Nordstrom, Inc (JWN), Blackstone Group L.P (BX)

U.S. stock futures were marginally higher early Thursday morning as once again investors await data on the economy to give them direction. Several deals and earnings are also in the spot light this morning.

U.S. stocks received a boost Wednesday from lower-than expected inflation numbers, given extra credence by the fall in crude-oil prices. While most companies reporting earnings Wednesday didn't proved good news, a smaller-than-forecast loss for Freddie Mac helped lift sentiment. The Dow industrials rose 66 points, or 0.52%, the S&P 500 rose 6 points, or 0.40%, and the Nasdaq Composite edged up more than a point, or 0.06%.

This morning, more inflation data is due out. Consumer level inflation reported Wednesday managed to surprise the Street, but can the economic releases today do the same?
At 8:30 a.m., weekly initial jobless claims will be released, as well as May NY Empire State Index.
At 9:00 a.m., March Net Foreign Purchases will be reported to be followed some time later with April capacity utilization and industrial production.
At 10:00 a.m., after the market opens, the Philadelphia Fed index is due and is expected to show another decline.
Finally, a housing index is also due today.

Meanwhile, despite recent signs of a global slowdown, in Europe, economic growth accelerated more than forecast in the first quarter thanks to the strongest German expansion in 12 years. This data would seem to support the European Central Bank more hawkish stance and its decision to keep rates unchanged in an attempt to stall inflation, which Trichet, the ECB president, more than once mentioned as a global risk.

On the corporate side, The Wall Street Journal reported late Wednesday that General Electric (NYSE: GE) plans to sell its appliance division for between $5 billion and $8 billion

Meanwhile, billionaire activist investor Carl Icahn decided to try and overtake Yahoo Inc. (NASDAQ: YHOO)'s board, to at least scare it into action and revive negotiations with Microsoft Corp. (NASDAQ: MSFT). Icahn has lined up a slate of 10 directors to nominate as replacements.

Among companies reporting today are Blackstone Group (NYSE: BX), Blockbuster (NYSE: BBI) and several retailers: Nordstrom (NYSE: JWN), Kohl's Corp. (NYSE: KSS) and J.C. Penney (NYSE: JCP).

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Liz Claiborne, Wal-Mart beat - time to buy retail?

Melly Alazraki — 2008-05-13T14:48:00+00:00

Filed under: Industry, Wal-Mart (WMT), Target Corp. (TGT), Penney (J.C.) (JCP), Costco Wholesale (COST), Economic data, Liz Claiborne (LIZ)

In economics, inferior goods are defined as goods that are less in demand as consumers get richer but more in demand as consumers get poorer -- which of course happens when the economy slows down. Inferior goods are often the basic goods and services such as bus rides, potatoes, instant noodles and so on. And with increased demand, the price of such goods, unless regulated, can actually increase in bad times. A recent example of this is the increase in the price of rice (although other forces were at work there as well).

Well, recently we've seen a trend in retail that showcases this clearly -- discount retailers have been performing well relative to most other retailers. When retailers reported same-store sales for the month of April, Wal-Mart Stores Inc. (NYSE: WMT), Target Corp. (NYSE: TGT) and Costco (NASDAQ: COST) outdid their less fortunate counterparts as they have likely taken customers away from other retailers.

The trend that started a few months ago, with car sales (definitely a normal, not an inferior good) in the U.S. softening overall, has continued and even deepened as consumers have less disposable income after inflation and gas money is taken into account. With credit hard to come by, they have turned to cheaper alternatives. To wit, today Wal-Mart -- my "inferior retailer" -- reported that first-quarter profits rose 6.9%. Conversely, Liz Claiborne (NYSE: LIZ) -- the "normal retailer" -- swung to a first-quarter net loss.

To be fair though, it's the top line that matters if I'm looking at consumers' changing habits and there WMT saw a net 10.2% sales increase while LIZ's sales grew by much less during the quarter, 4.9% -- actually, not that bad. Even AnnTaylor Stores Corp. (NYSE: ANN) raised its forecast Monday. Indeed, somehow retail -- excluding auto sales of course -- has managed to hold up quite well recently despite market conditions as today's report indicates. Including autos, though, retail sales declined in April.

The question for investors is whether any retail stocks merit our attention right now. Some analysts actually believe so, saying that not only discount retailers like Wal-Mart stand to gain from a weakening economy, but even some department stores like J.C. Penney (NYSE: JCP) which generally have lower prices could do well in the current climate.

I don't know about that. Call me skeptical or careful -- either way, I wouldn't jump on any retail at the moment, not the discount retailers and definitely not the higher-end stuff. I mean, even Wal-Mart had a cautious outlook when reporting today, saying that as consumers wrestle with higher energy and food costs they will likely have even less money for other items. That sent WMT stock over 2% lower. And Liz? Liz has actually posted some improvements, such as a 28% jump in sales of its four "direct" brands, but it's still in the midst of a massive restructuring. LIZ shares are gaining over 1.5% today as the results handily beat expectations. But I still wouldn't touch either stock.

At some point, of course, the economy will rebound and so will retail. The time to get back into this sector will be when the first signs of a recovery appear. But right now, no one is sure when that will happen and the expectation is for at least two more quarters of weak results. I might be missing the boat a little by waiting, but tell you the truth, I'm just a little more risk averse these days.

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Second half may bring a recovery for JCP, KSS

Eliza Popescu — 2008-05-12T15:33:00+00:00

Filed under: Forecasts, Consumer experience, Penney (J.C.) (JCP), Kohl's Corp (KSS), Economic data, Housing, Federal Reserve, Recession

I know that what you probably wanted to hear most is that the economy's slowdown is at an end so that some of your beaten-down stocks could enjoy a nice recovery. When the stock markets started declining towards the end of last year, SmartMoney tells us that analysts began to place bets on when we might see stocks rebound. Back then, many fund managers had expected a rally in the second half of 2008.

The Federal Reserve's decision to slash interest rates several times certainly gave a temporary boost to stocks -- not enough for a long-term rally, though. Daily concerns such as the deep housing slump and the rising inflation today give the impression that a second-half comeback is but a dream; it that would be quite hard to accomplish.

While analysts on Wall Street mostly believe a long-term rally is not too realistic now, they believe a moderate boost, stemming from the Fed's rate cuts and the $117 billion in tax rebates going into banks' accounts, is likely. On the other hand, looking at corporate profits, Citigroup analysts believe that predictions related to stocks' earnings figures are too high when taking the challenging market conditions into account.

There is some good news, though. Citi analysts said they see one sector outperforming: retailing. Retailers have a good chance to overcome the weak economy, they say, helped in part by the tax-rebate checks. They picked J.C. Penney Inc. (NYSE: JCP) and Kohl's Corp. (NYSE: KSS) as they have already slashed their first-quarter earnings estimates so that "the bad news is priced in."

But, despite all of this, analysts agree that the economy is still in bad shape. April's Federal Reserve Beige Book report was quite disappointing, showing an economy in worse shape compared with the beginning of the year. This was the result of continued concerns about consumer spending, soft labor markets and soaring prices for food and energy.

But don't be too scared. Only a few analysts expect times to get too much worse. So there still is a chance to see a recovery faster than expected.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

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Earnings expectations for JC Penney, Nordstrom, Macy's, Abercrombie and others

Trey Thoelcke — 2008-05-10T13:40:00+00:00

Filed under: Earnings reports, Forecasts, Wal-Mart (WMT), Penney (J.C.) (JCP), Kohl's Corp (KSS), Abercrombie and Fitch (ANF), Nordstrom, Inc (JWN), Urban Outfitters (URBN)

The earnings season continues to roll on, and next week's results offer a peek at the state of fashion retailing, as a variety of companies -- from the discount to the upscale, from the hip to the pedestrian -- are scheduled to report earnings.

Analysts surveyed by Thomson Financial expect earnings growth, compared to the same period in the previous year, from Urban Outfitters (NASDAQ: URBN) to be 22.7% to 22 cents per share, from Wal-Mart Stores (NYSE: WMT) to be 9.3% to 75 cents per share, and from TJX Companies (NYSE: TJX) to be 7.5% to 40 cents per share.

Analysts expect earnings declines from the previous year from JC Penney (NYSE: JCP) by 52.9% to 49 cents per share, from Kohl's (NYSE: KSS) by 34.4% to 42 cents per share, and from Nordstrom (NYSE: JWN) by 18.3% to 49 cents per share.

In the case of Abercrombie & Fitch (NYSE: ANF), analysts expect earnings to remain flat, year over year, at 65 cents per share.

And then there's Macy's (NYSE: M), which is expected to swing to a loss of 2 cents per share, compared to a profit of 16 cents a year ago.

The sample size may be too small to define any significant trends, but the numbers do suggest that analysts expect profit declines to be deeper than profit growth, and that consumers may be more likely, given the current state of the economy, to buy clothes at Wal-Mart or TJ Maxx than at Nordstrom or Abercrombie.

The coming results will reveal if those expectations are correct.

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J.C. Penney is scared of the economy

Steven Mallas — 2008-04-16T08:40:00+00:00

Filed under: Penney (J.C.) (JCP), Sears Holdings (SHLD), Economic data

Penney (J.C.) (NYSE: JCP) is a little timid right now in the face of the recession. According to this AP piece, CEO Mike Ullman, speaking at an analysts' meeting, is reducing the number of new locations he plans to debut this year -- look for 36 instead of 50. The CEO said that he doesn't like the unpredictability that currently exists in the macroeconomic world.

He's right to be careful. Consumer confidence might head lower from here. And considering that J.C. Penney reported terrible comps for March -- the retailer saw a decline of 12.3% -- now is probably not the time to be in expansion mode. Instead, management needs to figure out how best to connect with the mall traffic. This will necessitate new marketing campaigns that aggressively promote the brand and the shopping experience, and differentiate the chain from competitors such as Sears (NASDAQ: SHLD) and Macy's (NYSE: M). Retailers, in my opinion, often underestimate the value of investing in creative campaigns that focus more on the experience a consumer receives when he or she is in the store rather than the perceived value that a consumer has regarding the inventory portfolio.

In terms of investment potential, J.C. Penney is not a retail company that I'm seriously looking at right now. I'll wait to hear more financial updates from management; it isn't expensive at the moment, and it is certainly eons away from its 52-week high, but I just don't have a good feel for its growth potential yet. Interestingly enough, I wrote about American Eagle Outfitters (NYSE: AEO) the other day, another cheap retail stock; both J.C. Penney and American Eagle Outfitters might be considered similar stories in terms of valuation, but for me, I find American Eagle to be the more attractive candidate from a brand viewpoint and in terms of bouncing back big when the economy improves (that's my current outlook, at least). We'll have to wait and see how this mall story evolves.

Disclosure: I don't own shares in any of the companies mentioned; positions can change at any time.

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Biggest brains in business, incredible shrinking city & big names owe big-time on taxes - Today in Mondy 4/14

Allan Halprin — 2008-04-14T08:56:00+00:00

Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Time Warner (TWX), Starbucks (SBUX), JPMorgan Chase (JPM), Penney (J.C.) (JCP), Blockbuster Inc 'A' (BBI), Circuit City Stores (CC), Goldman Sachs Group (GS), Kohl's Corp (KSS), Wachovia Corp (WB), News Corp'B' (NWS), AMR Corp (AMR), salesforce.com inc (CRM), Delta Air Lines (DAL)

In the News:

· Wachovia Posts Surprising Loss, to Raise $7 Billion in Capital; Stock Drops

· Blockbuster Bids Over $1 Billion to Buy Circuit City

· Google & Salesforce.com Join to Fight Microsoft

· Yahoo Board Agrees to Hold Further Meetings This Week With Microsoft, AOL

· American Airlines Finally Returns All Jets to Service

· Report: Delta-Northwest Very Close to Merger; Would Create World's Largest Airline

· U.S. Retail Sales Struggle to Rise Slightly in March

Why Starbucks' Logo Changed
The coffee chain is temporarily using a retro brown look to evoke its beginnings and restore some goodwill for the brand.
Starbucks' Retro Logo - BusinessWeek

Big Names Owe Big-Time on Taxes
The IRS estimates that 21% of federal individual income taxes go unpaid each year - about $300 billion last year. As Tuesday's tax deadline approaches, Americans are settling accounts on $1.5 trillion in federal and state income taxes for 2007. But what about those who don't pay? Who are they? Do they get away with it? Hundreds of seemingly wealthy people - company presidents, former soap opera stars, top-selling real estate agents - live in multimillion-dollar homes yet have huge tax problems. Many tax delinquents live openly and prosperously for years, even decades, while owing millions of dollars in taxes. These include singer Dionne Warwick, comedian Sinbad, Bill Clinton's former political advisor, Dick Morris, former U.S. treasurer Catalina Vásquez Villalpando and infamous celebrity OJ Simpson to name a few.
Big names owe big-time on taxes - USATODAY.com

73 Biggest Brains in Business
Who really are the smartest folks in the room? Condé Nast Portfolio talked to scores of C.E.O.'s, economists, and power players for a look at who's influencing the influencers. They include rebels like Tina Fey and Steven Spielberg and designer Marc Jacobs, game changers like News Corp.'s Rupert Murdoch, Goldman Sachs' Lloyd Blankfein and JP Morgan Chase's Jamie Dimon and tastemakers like Oprah Winfrewy and Karl Lagerfeld.
The-Brilliant-Issue - Portfolio.com

The Incredible Shrinking City
Youngstown, Ohio, has seen its population shrink by more than half over the past 40 years, leaving behind huge swaths of empty homes, streets and neighborhoods. Now, in a radical move, the city - which has suffered since the steel industry left town and jobs dried up - is bulldozing abandoned buildings and tearing up blighted streets, converting entire blocks into open green spaces. More than 1,000 structures have been demolished so far.
The incredible shrinking city - CNNmoney

Big Retailers Seek Teens (and Parents)
Having lost shoppers to hip specialty shops, department stores are reinventing themselves to attract both adults and their style-minded children. J.C. Penney, Macy's, Bloomingdale's, Saks Fifth Avenue and Kohl's are all adopting approaches - from celebrity-designed fashions to mobile marketing to better fitting rooms - to try to lure young shoppers without turning off their parents.
Big retailers seek teens (and parents) - USATODAY.com

Choking on Food Prices
The cost of food has become a headline story the world over, from food-related riots in Haiti and Egypt to some Asian governments mulling whether to restrict rice exports. In the U.S., grocery bills are surging: Nearly every food staple has seen a double-digit percentage increase over the past year, including a 38% hike for a dozen eggs, to $2.16, and a 19% jump, to $1.78, for a loaf of white bread, according to American Farm Bureau data. With Americans spending 15% of their household income on food and drinks, rising prices in the grocery aisles have spurred consumers to hunt savings.
Squeezed by Rising Food Costs- BusinessWeek

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Retail sales, especially Nordstrom, as economic barometer

Joseph Lazzaro — 2008-03-31T12:06:00+00:00

Filed under: Penney (J.C.) (JCP), Kohl's Corp (KSS), Nordstrom, Inc (JWN), Recession

What's a tell-tale sign of a recession, and conversely, an indicator investors/readers should monitor to spot when the recovery has started? Retail sales -- particularly at department stores.

Most retailers will report March 2008 same-store sales this week, and Wall Street is bracing for the worst. In January 2008 and February 2008, same-store sales declined at nearly every major department store, including JC Penney (NYSE: JCP), Macy's (NYSE: M), Kohl's (NYSE: KSS), Dillard's (NYSE: DDS) and Nordstrom (NYSE: JWN).

Further, investors should watch Nordstrom's same-store sales carefully. The reason? Upscale retailer Nordstrom is a type of quick-reference, or an economic-barometer-in-a-snapshot, of the depth of a recession. If retail sales decline at broader-demographic retailers for several consecutive months, that points to a recession. But if sales decline at upscale retailer Nordstrom, that's a sign that even those with higher incomes and substantial assets are cutting back, which is a bad sign for the economy.

Nordtstrom's customers include professionals, executives and business owners -- including people who make hiring decisions. If they're cutting back, that may indicate they will not be hiring in the period ahead, which is never good news for the economy. Invariably, it means the recession's end is not near.

In Q4 2007, Nordstrom's sales fell 4.4% and earnings per share fell for the first time in more than five years to 92 cents per share. If Nordstrom's same-store sales decline again in March, that's a sign of continued belt-tightening by upper-middle and upper-income adults, and a sign that an economic recovery is not near.

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