Credit Suisse's Estimates and Price Target Changes

Credit Suisse made a number of estimates and price target changes in a research report published today. BG Group plc (BRGYY) had its price target cut to 1,690p from 1,710p. At the moment, Credit Suisse has an outperform rating on the company's stock. In the report Credit Suisse states, "In this report, we revisit BG from the angle of its Queensland Curtis LNG project in Australia, a major contributor to NAV (245p/sh for a 3-train project, 15% of NAV) and production growth (17% of 2,016 volumes). In recent months, there have been increasing concerns on capex inflation given a tightening labour market in Australia, and potential execution delays. In this note, we discuss these risks and run sensitivities to cost overruns and delays. We trim our TP to 1,690p from 1,710p, in line with our NAV." On Monday, BG Group added 1.18% to its value to close the day at $116.77. Seadrill SDRL had its price target raised to NKr194 from NKr181. At the moment, Credit Suisse has a Neutral rating on the company's stock. The report states, "SDRL provided an encouraging outlook, anticipating further dayrate strength over the next 18 to 24 months, with ultra-deepwater (UDW) dayrates likely to eclipse $500K. On the other hand, the company expects for UDW dayrate trends to plateau in late 2013 given the significant number of newbuilds in the order book. As such, we would expect the company to focus on securing term contracts through this potential gap in the market. While the company is well positioned versus the peer group given its high-spec fleet, we reiterate our Neutral rating given the premium valuation versus the peer group." On Monday, Seadrill lost 0.11% of its value to close the day at $35.58. Its shares regained all of yesterday's losses in today's pre-market trading, however, rising 0.82% to $35.82. MedcoHealth Solutions MHS had its target price reduced to $70 from $74. At the moment, Credit Suisse has an Outperform rating on its shares. The report states, "We estimate the loss of FEP will cost MHS roughly $0.30 on an annualized basis. Based solely on the EPS impact of FEP, the reaction may seem a bit excessive, however 27th May's news will raise questions regarding industry pricing and the CALPERS overhang. We are revising our ests down $0.30 to $4.78 to reflect the loss of the contract, and lowering our Price Target to $70 (from $74). We believe the stock offers attractive upside over the next year, however we suggest some patience is warranted as shares will likely be volatile as we move through the selling season and wait for UNH overhang to be resolved. Reiterate Outperform." On Monday, MedcoHealth lost 8.92% of its value to close the day at $58.66. Its shares regained some of its losses in today's pre-maket trading, rising 0.58% to $35.82. H.J. Heinz Company HNZ had its price target raised to $55 from $50. At the moment, Credit Suisse has a Neutral rating on the company's stock. The report states, "While we found management's presentation of its two-year strategy for investment and growth very compelling, we think the stock has only modest upside over the next 12 months. The stock is already trading at a premium valuation multiple to the food group despite the fact that top-line growth has dipped below the group average. We are raising our target price modestly to $55/share (from $50) , which assumes a group average P/E of 15x our FY 13 estimate of $3.65 (old: $3.60). Investors may have a better opportunity to buy this stock a year from now as they get better visibility into earnings growth acceleration in FY 13." On Monday, Heinz closed to day at $54.68, or 1.6% higher than Friday's close. Watson Pharmaceuticals WPI had its price target raised to $75 from $72 on Specifar Acquisition. The report states, "We are raising our target price from $72 to $75, after a more detailed review of the Specifar acquisition following our "Initial Impressions" note on May 25. We believe that the deal has significant strategic and financial merit, and preserves leverage capacity for future deals. Three key strategic benefits to the acquisition: (1) adds a high-margin, pan-European 3rd party generics development business with a diversified product portfolio; (2) provides revenue and cost synergy opportunities; and (3) brings substantial manufacturing capacity which could enhance gross margins by enabling faster integration of externally manufactured acquired products. Such gross margin expansion would be upside to our estimates." At the moment, Credit Suisse has am Outperform on the company's stock. On Monday, Watson added 0.27% to its value to close the day at $63.99.