Monday, November 12, 2007

S&P Lowers 12 month target to $3.5

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_U/threadview?m=tm&bn=27187&tid=145807&mid=145807&tof=20&frt=2

Thanks to Rspen for posting this early today.

S&P has now cut their 12 month target price from $11 early this year all the way to $3.5 now. I can understand the cut due to disappointment in earnings pushout. But, not due to sum of the parts analysis, specially after their investments have gone up by over $100m. Remember, that sum of the parts analysis at $11 was just early this year! Definitely does not make sense.

Now, lets take a look at their estimates going forward. For 2008, they estimate 2% gains from 2007. That obviously has to go up for a couple of reasons. Q3 and Q4 revs are significantly higher than current estimates. Also, book-to-bill have been 1 to 1.2. They do have a 16% GM estimate but that could change significantly depending on mix and timing. Overall, they have a 87 cent loss for 2008. Thats actually higher than consensus right now but the consensus should go up some. It will be interesting to see how estimates are revised after Q3....

Q3 2007 CC transcript

http://seekingalpha.com/article/53890-utstarcom-q3-2007-earnings-call-transcript?source=yahoo