Trefis Week in Review

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The Week in Review

Below is a summary of the activity on Trefis during the past week that we thought you would find interesting.


Insights from the Week

Technology Media & Telecom

With increasing competition on OpenTable's home turf from newer players - notably Urbanspoon - marketing spend has shot up as part of an effort to retain existing customers …

The new software offered by IBM draws on its market-leading WebSphere Commerce platform and will boost IBM's middleware license revenues as well as consulting services revenues …

According to management, the Chatter application has gained faster adoption with 80,000 of its 92,300 paying customers deploying Chatter since its release in June …

  • Business Services Offerings Worth 20% of Dell's Stock on March 17,  2011

Demand for IT services is picking up as companies move to modernize their hardware and software systems to leverage new technology and improve productivity …

  • SAP's In-Memory Technology to Shake Up Database Market on March 17,  2011

HANA uses a different method of storing and retrieving data by storing it on computer's CPU rather than traditional way of reading and writing on storage disks …

  • Facebook Stepping on Netflix's Toes With Streaming Movies on March 17,  2011

Amazon is also pushing into streaming service in the U.S., and though its streaming content is less than that of Netflix, Amazon could potentially offer more content for a lower price in the future …

  • Updating Estimates as Microsoft Decides to Scrap New Zune Models on March 16,  2011

Even before this report, Microsoft Zune sales failed to pick up, and we believe it maintained a low market share of around of 0.5% in the music and video player market through 2010 …

  • Cisco Resilient to Japan Disaster on March 16,  2011

While the disaster has directly impacted companies with manufacturing facilities in Japan, its indirect effect for companies situated internationally comes in the form of supply shortages of components and lower sales in the Japanese market …

  • Tokyo Disneyland Suspends Operations, Could Weigh on Shares on March 16,  2011

Out of about revenues of 371, 415 million Yen that OLC Group earned in its fiscal year ended March 2010, about 77% was attributable to theme parks Tokyo Disneyland and Tokyo DisneySea …

  • Little Impact to CBS From Pulling Two and a Half Men on March 16,  2011

Put this into context of CBS network (not whole of CBS) overall revenues, it seems like this particular series accounts for a little over 4% of its revenues …

  • iPad 2′s Strong First Weekend Sales Can Bump Apple Shares Higher on March 15,  2011

Since the 32 GB and 64 GB iPads are priced higher than 16 GB iPads, Apple also stands to gain from the higher average iPad pricing …

  • SanDisk Highlights Growth of Mobile and Video at Analyst Day on March 15,  2011

With the rise in video streaming service providers like Youtube and Netflix and increasing broadband Internet penetration, the consumption of video content online has picked up greatly …

  • News Corp Saying Good Riddance to Myspace on March 15,  2011

The low contribution in value is a result of both low current revenues when compared to overall News Corp's value, as well as grim outlook with regards to site traffic …

  • Recovery On Tap for AOL After Recent Struggles on March 15,  2011

Although the company's SG&A expenses declined from job cuts enacted last year, the cost benefits were not enough to offset the larger revenue decline …

  • Nvidia Analyst Day Highlights Tesla Adoption & Growth Outlook on March 15,  2011

If we look at Tesla, its revenue contribution to Nvidia's professional GPU business segment has increased from a mere under 2% in 2008 to just under 13% in 2010 …

  • Accenture Partnership Lifts NetApp on March 14,  2011

The partnership with Accenture will give NetApp the opportunity to expand into newer avenues by providing access to Accenture's client relationships …

  • Four Trends in Dell's Hardware Business Highlight Importance of Tablets on March 14,  2011

We estimate Dell will sell around 700,000 tablets in 2011, capturing nearly 5% of android tablets sold in the market, and will increase sales to close to 2.3 million units by 2013 …

  • Mobile Phone Flash Cards Worth 53% of SanDisk's Stock on March 14,  2011

As smartphones become capable of serving a multitude of purposes, they are fast becoming a necessity for the newer generation of consumers who want greater functionality such as email and Internet access …

  • Motorola Mobility Stock is Highly Sensitive to Smartphone and Tablet Growth on March 14,  2011

While the increasing popularity of Android benefits players like Motorola Mobility, it does risk making Motorola's smartphones a commodity as Motorola loses control of operating system developments and innovations …

  • Improving Ad Market Lifts All Boats Including DirecTV's on March 14,  2011

Apart from general improvement, DirecTV has the opportunity to boost its advertising revenues by focusing on local advertising and interactive ads that are likely to bring it more business …

  • New Support Service from Comcast Could Bolster Market Share on March 14,  2011

Enhancing the support service for several internet gadgets might act as an incentive for customers to stay with Comcast, supporting market share for a variety of product lines …

(Trefis Pro Exclusive) Consumer, Retail, Airlines & Automotive

  • Coverage Launch: $14.10 Trefis Price Estimate for Southwest Airlines ( LUV ) on March 18,  2011

Its low cost structure is facilitated by its reliance on a single aircraft type, Boeing 737, that helps reduce the maintenance capital expenditure, its operationally efficient point-to-point route structure, and its highly productive employees …

  • Aeropostale's Recession Strategy Pays Off on March 18,  2011

The brand's commitment to operational discipline, especially around inventory management and average unit costing has helped the brand to improve its merchandise margins and revenue per square foot …

  • GM Market Share Recovery Supports $45 Value on March 17,  2011

We believe the main drivers for this increase is sales and improving consumer confidence were cheaper credit and short term incentive programs …

  • Weak Gap Sales Could Dampen Our View on March 17,  2011

If the revenue per square foot for Gap stores decreases to $300 by the end of our forecast period, it would result in a downside of nearly 7% to our current price estimate for Gap's stock …

  • Raw Materials Are Squeezing Aeropostale on March 17,  2011

Increasing cotton prices towards the end of last year had an impact on the company's profitability as full year operating margin dropped by 110 basis points …

  • CVS Sees Value in Pharmacy Benefits Business While Walgreens Is Selling on March 16,  2011

Catalyst Health Solutions is doing the same by acquiring Walgreens prescription benefits management unit, which shall increase the number of prescription benefits customers from its current 7 million to 18 million …

  • Feb Retail Data Positive for American Eagle, E-Commerce Supports $25 Value on March 15,  2011

Improving employment and better macroeconomic conditions as well as a reduction in the payroll tax helped to drive this increase, more than offsetting the increase in fuel and food prices …

  • Nike's Gross Margin Outlook a Key to This Week's Earnings Announcement on March 15,  2011

Nike's manufacturing facilities are spread across several Asian countries now so that the risk posed by higher labor costs in one particular country, like China, is limited as the company can reallocate production to other countries …

  • Looking at J. Crew's Business Value as Buyout Closes on March 14,  2011

In its internet & catalog orders business, the company has established a stable supply chain and utilized the latest e-commerce technology for order management, product fulfillment and customer service …

(Trefis Pro Exclusive) Financial Services & Energy and Natural Resources

  • First Solar's Outlook Uncertain Despite Recent Stock Rally on March 18,  2011

The fact that Japan is responsible for about 10% of all solar components manufactured worldwide which would be severely affected due to the crisis -  at least in the short run - plays in favor of solar industry players like First Solar …

  • 15% Upside to Ameritrade if Accounts Grow to 10 Million by 2013 on March 18,  2011

We expect a recovering market and Ameritrade's investment into marketing, brand-building and technology will lead to a steady increase in the number of brokerage accounts in the future …

  • Cliffs' Coal Sales in North America to More than Double on March 18,  2011

Cliffs enjoys a unique advantage in the highly fragmented coal industry in North America as its long-term relations with some of the world's largest steel manufactures …

  • Conoco Ready to Help with Japan's LNG Needs on March 18,  2011

In light of the recent events, Conoco and it's partner Marathon Oil are monitoring the situation closely to help in the short term, but so far they have not changed their plans to shutter the plant …

  • SunPower's Outlook Brightens as Concerns on Nuclear Rise on March 17,  2011

To understand the potential market size, nuclear power contributes almost 20% of the electricity generated in the U.S. and represents almost 9% of the total energy output for the country …

  • How Much Glitter Does Gold Add to Freeport's Stock? on March 17,  2011

But gold will be a bigger source of value for Freeport in the years to come - primarily because of Freeport's Indonesian mine that boasts the largest single recoverable reserves of gold compared to any other mine in the world …

  • Visa Proposes Two Tiered System if Debit Fee Caps Enforced on March 16,  2011

While the effect of two tier system on assessment fee remains to be seen, a delay in Fed's proposed fee limit would let Visa maintain its current level of fees in the hopes that the law will be amended to repealed …

  • BP's 2010 Performance Muddied by Gulf Oil Spill on March 16,  2011

Although revenues had dropped in 2009 from its peak of $361 billion in 2008 to reach $239 billion in 2009, there has been an almost 25% improvement in the top-line performance for 2010 …

  • Fitch Raises Outlook on Hartford Before Japan Losses on March 16,  2011

According to the Fitch, Hartford's life insurance profitability will improve but intermediate term growth in earnings will be challenged by its concentration in lower margin, competitive retirement savings businesses and a group benefits operation that is experiencing higher loss ratios …

  • Duke Outlook Solid on Growth From New Projects on March 16,  2011

Duke Energy is planning to spend around $8 to $9 billion on new capital construction over the next two years, primarily for new nuclear generation facilities, which is a part of its decarbonization strategy …

  • State Street Gains from Shift to Passive Funds, Raising Estimates to $47.80 on March 16,  2011

The general market sentiment has been that of cautious optimism, and this became more evident with investors increasing their exposure to passive funds …

  • MetLife Looks to Exit Taiwan as Shares Take a Lump From Japan on March 15,  2011

The Taiwanese unit is small part of MetLife's international insurance operations and its sale will have little or no effect on MetLife's share of international insurance market which was boosted by the acquisition of ALICO in 2010 …

  • ArcelorMittal's G Steel Stake Widens Footprint in Asia on March 15,  2011

ArcelorMittal also seems to have addressed the high debt issue for G Steel by pledging $500 million as additional credit to help improve its working capital and repay a part of its loan …

  • Regulatory Headwinds Could Weigh on Massey's Margins on March 15,  2011

If the EBITDA margin falls to 15% by the end of our forecast period, it would have a negative impact of around 10% on our price estimate for Massey's stock …

  • Trefis Picks of the Week for Financials, Energy & Natural Resources on March 14,  2011

According to the unpublished diplomatic cables, the US officials believe that the Chinese regulators passed on proprietary information about AIG to its Chinese rivals during the American firm's collapse in 2008 …

Summaries of Trefis Members' Recent Forecasts

  • Higher Steel Prices Make U.S. Steel Stock Worth $60 on March 18,  2011

An imminent recovery in the global demand for steel, and the expected economic growth among developing countries like China, India and South Korea, steel prices will allow manufacturers to push steel prices further up …

  • Shift to Digital Content: A Right Move by WSJ on March 18,  2011

WSJ is making the right moves of late. It recently launched a digital magazine, Daily, designed specifically for the iPad, and is also recording higher paid subscription through mobile devices and tablets …

  • BP's Natural Gas Outlook Positive Despite Repeated Setbacks on March 18,  2011

Increasing use of natural gas as a substitute for oil and rising demand for energy will lead to demand growth for natural gas, thereby increasing gas production and exploration activities by oil and gas producers like BP …

  • Positive Outlook for Target's U.S. Store Revenues on March 17,  2011

Target recently rolled out a new program that sends coupons directly to the customer's cell phone via a text message and a link attached …

  • High Oil Prices to Support Conoco Shares Despite Japan's Woes on March 17,  2011

Fears about a slowdown in the Japanese economy (the world's third largest economy) are compounding after several of its nuclear reactors and factories have been damaged by the Tsunami …

  • Intel to McAfee: Let's Secure the Cloud on March 16,  2011

According to a report by McAfee, the amount of mobile malware in 2010 increased by 46% compared over 2009, and out of 55 million total pieces of malware that McAfee identified, 36% were created in 2010 alone …

  • Amazon's Cloud & Web Services Business is Growing, But Won't Move Stock Much on March 14,  2011

The additional revenue of $1 billion (projected by Trefis members) will not have a great impact on Amazon's stock because the contribution of the cloud business to Amazon's overall stock value is limited compared to the online retailing business …

  • Can AMD Regain Lost Server Processor Share? on March 14,  2011

AMD has typically been ahead of the curve in bringing advanced designs to the server microprocessor market with the obvious exception of the delay of its Barcelona chip in 2008 …

Sirius retail subscriber numbers have been declining due to competition from digital audio players like the iPod. We expect this trend to continue with the emergence of HD radio and 4G mobile Internet networks …



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: LUV

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