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MORNING COFFEE

Pop1568 views  2011-04-19 07:35   Tagsgoldman  berkshire  texas  zions  johnson  dolby 

S&P Cuts U.S. Debt Outlook.  World market sold off yesterday after the rating agency Standard & Poor’s downgraded the U.S. debt outlook from “Stable to Negative.” The negative outlook rating means that the United States AAA credit rating is in jeopardy of being lowered.  In a news conference S&P said that the reason for the negative outlook is due to the massive spending and debt the U.S. has accumulated in the last few years.  Currently the company said the U.S. has a 33% chance in having their AAA credit rating lowered in the next 6 months to 2 yrs.  This rating warning comes as the government just finished battling over the 2011 budget and will begin battling over the 2012 budget and we approach the debt ceiling.  If the U.S. loses its gold standard AAA rating, borrowing cost will rise hurting the economy and making our debt problem worse.

Goldman Sachs Pays Back Berkshire. Goldman Sachs (GS) repurchased the $5 billion in preferred shares it sold Berkshire Hathaway (BRKA/BRKB) during the financial crisis back in 2008. Warren Buffett joked that he knew they would be repaying, so he tried to avoid answering the phone.  The preferred shares were paying a 10% dividend, yielding the company about $1,369,863 per day. GS Pre-market: 156.28 +2.50 (1.63%) BRKB Pre-market: 80.56 +0.26 (0.32%)

Earning Reports

Texas Instruments (TXN): Reported Q1 EPS of $0.55 missing estimates by -$0.03 on revenue of $3.4 billion, in-line with estimates. Pre-market: 34.15 -0.64 (-1.84%)

Zions Bancorp (ZION): Reported Q1 EPS of $0.08 beating estimates by +$0.10. Pre-market: 24.30 +1.34 (5.84%)

Companies to Report Earnings Today

Harley-Davidson (HOG): Analysts estimates are for the company to report Q1 EPS of $0.53 on revenue of $1.05 billion.

Johnson & Johnson (JNJ): Analysts estimates are for the company to report Q1 EPS of $1.27 on revenue of $2.66 billion.

Goldman Sachs (GS): Analysts estimates are for the company to report Q1 EPS of $0.82 on revenue of $10.18 billion.

Intel (INTC): Analysts estimates are for the company to report Q1 EPS of $0.46 on revenue of $11.61 billion.

IBM (IBM): Analysts estimates are for the company to report Q1 EPS of $2.30 on revenue of $24.02 billion.

CSX (CSX): Analysts estimates are for the company to report Q1 EPS of $1.04 on revenue of $2.74 billion.

Upgrades

Eaton (ETN): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $63.00 on the company.

Zions Bancorp (ZION): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $22.00 to $30.00.

Coverage Initiated

HCA (HCA): Oppenheimer initiated coverage with an Outperform rating and a target price of $40.00.

HCA (HCA): Robert W. Baird initiated coverage with an Outperform rating and a target price of $37.00.

McDermott (MDR): Morgan Keegan initiated coverage with an Outperform rating and a target price of $31.50.

Coverage Reiterated/Price Target Changed

WW Grainger (GWW): Oppenheimer reiterated their Outperform rating and raised their target price from $158.00 to $175.00.

Dolby Labs (DLB): Collins Stewart reiterated their Buy rating and lowered their target price from $75.00 to $55.00.


•Futures at 8:18: Dow +0.23%. S&P +0.13%. Nasdaq +0.13%. Crude -0.75% to $106.36. Gold +0.18% to $1495.60.
•Europe: London +0.64%. Paris +0.75%. Frankfurt +0.45%.
•Asia: Japan -1.21% to 9441. Hong Kong -1.3% to 23520.. China -1.91% to 2999. India +0.16% to 19121.

 

 

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