Goldman Sachs Research Summary (APR 10, 2007)

Stock Tickers: CBE, FLWS, TEN, ARA, NHWK, MSFT, STX, VAL, HAL, LCC, ORCL, F, GM
 

Earnings estimates INCREASED: Cooper Industries (CBE), Illinois Tool Works (ITW), 1-800-FLOWERS (FLWS), Tenneco (TEN), Aracruz Celulose S.A. (ARA), Nighthawk Radiology (NHWK).

Earnings estimates DECREASED: Microsoft (MSFT), Seagate Tech (STX), Valspar (VAL), Halliburton (HAL), US Airways Group (LCC).

Software research coverage transfers: Oracle (ORCL) was raised fromNeutral to Buy; Autodesk (ADSK) was raised from Neutral to Buy.

Microsoft is actually part of a research coverage transfer inside ofGoldman Sachs.  Goldman is maintaining its neutral stance on theoverall software sector.  Microsoft was maintained as a BUY, with thetiming noted as key ahead of revenue acceleration and a compellingvaluation.  The buy rating is maintained, but MSFT is coming off of theCONVICTION BUY LIST, partly since it has been up 25% versus the S&Pmove of 16% since it was added to the list on June 26, 2006.  The sameis attributed to the Oracle note, although the new analyst there hasmoved Oracle to its BUY LIST from a neutral coverage.

Goldman is also raising estimates for GM (GM) and Ford (F): Fordestimates in Q1 raised from -$0.81 to a narrower loss of -$0.45(consensus -$0.63).  GM estimates raised from $1.25 from $1.11(consensus $0.83).  Goldman thinks the most leverage will come frompotential UAW concessions, but it sees little ultimate upside fromeither company.  Goldman has more of a “long bias” to the names.

Halliburton estimates being cut reflects the new ex-KBR structure.New EPS Estimates: 2007 $1.95; 2008 $2.48; 2009 $2.82.  Goldmanmaintained its $35 price target.

Jon C. Ogg
April 10 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.