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Street Talk: Shop talk
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December 12, 2000: 9:23 a.m. ET
Analysts give mixed reviews to Gap, Limited, Intimate Brands, Talbots, more
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NEW YORK (CNNfn) - Retailers and e-commerce companies got mixed reviews from Wall Street analysts Tuesday, in the middle of the busy holiday shopping season for both sectors.
Lehman Brothers initiated coverage on a number of specialty retailers, giving "outperform" ratings to Gap (GPS: Research, Estimates), Limited (LTD: Research, Estimates), Intimate Brands (IBI: Research, Estimates) and Talbots (TLB: Research, Estimates).
Of Gap, Limited and Intimate Brands, Lehman Brothers said its rating reflects potential downside in sales -- but most, if not all, of that downside has been priced into the companies' shares, Lehman said. Of Talbots, Lehman said it could have problems with comparable-store sales in 2001, but its long-term earnings potential was solid.
Lehman set a $35 price target for Gap shares, a $26 target for Limited shares, a $21 target for Intimate Brands shares and a $55 target for Talbots shares.
Gap shares closed Monday at $25.56, Limited closed at $16.88, Intimate Brands closed at $14.56 and Talbots closed at $43.25.
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Lehman Brothers also initiated coverage of e-commerce companies Commerce One (CMRC: Research, Estimates) and Ariba (ARBA: Research, Estimates), giving an "outperform" rating to Commerce One and a "neutral" rating to Ariba. Lehman Brothers also set a $55 price target for Commerce One shares, but set no target for Ariba shares.
Of Commerce One, Lehman said, "Our rating reflects our appreciation of Commerce One's growth strategy, but is tempered by our belief that (it) faces a critical transition over the next two to three quarters."
Of Ariba, Lehman said, "Ariba's $25-billion diluted market capitalization overstates its realistic growth prospects, in our opinion."
Ariba shares closed Monday at $86.88. Commerce One closed at $43.75.
Advanced Micro Devices
Lehman Brothers cut its earnings-per-share estimates on chipmaker Advanced Micro Devices (AMD: Research, Estimates) after the company warned its fourth-quarter sales and earnings will fall short of expectations due to slow consumer demand for personal computers in the United States.
Lehman cut its 2000 estimate to $2.34 a share from $2.50 and its 2001 estimate to $1.90 from $2.45. Lehman kept its "neutral" rating on Advanced Micro Devices shares.
DoubleClick
SG Cowen analyst Scott Reamer cut his rating on online advertising company DoubleClick (DCLK: Research, Estimates) to "neutral" from "buy" after it cut its earnings expectations for this quarter and next quarter, citing a slowdown in ad spending.
Reamer also widened his 2000 loss estimate for DoubleClick to 14 cents a share from 9 cents and cut his 2001 earnings estimate to 16 cents from 30 cents.
Credit Suisse First Boston also cut its results estimates for DoubleClick. It changed its fourth-quarter projection to a 3-cent-a-share loss from a 3-cent profit, and cut its 2001 earnings estimate to 9 cents a share from 25 cents.
Valero Energy
ABN Amro raised its earnings-per-share estimates for Valero Energy (VLO: Research, Estimates) after the company said Monday it expects to earn more in 2001 than in 2000.
ABN Amro raised its 2000 estimate for the oil refinery operator to $5.28 a share from $5.10 and its 2001 estimates to $5.35 from $4.30.
ABN Amro reiterated its "buy" rating and $39 price target on Valero shares.
Whole Food Market
Lehman Brothers raised its price target on Whole Foods Market (WFMI: Research, Estimates) to $67 from $60 and reiterated its "buy" rating on the stock after the company said it planned to sell a subsidiary.
 The owner of natural food supermarkets "has now fully put behind it a distracting deviation from its successful retail strategy," Lehman said.
Whole Foods' plan to sell Amrion, its vitamin marketing and manufacturing subsidiary, "has been very well received by the market and the focus is now on the rapidly growing retail business," Lehman said. 
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