Analyst Actions: Garmin, Alliant Techsystems, Apollo Group, Shutterfly

DEUTCHE BANK DOWNGRADES GARMIN TO HOLD FROM BUY

Deutche Bank analyst Jonathan Goldberg says after checks at the Consumer Electronics Show, he's concerned about competitive pressure in the U.S. and pricing. He comes away with a sense that Tom Tom is determined to gain further share in the U.S. and may prove more aggressive than previously expected to achieve those aims.

Also, Goldman says Garmin (GRMN) cautioned some EU markets are slowing, the first such caution it expressed. And while Asia is showing signs of promise, it's not likely to become material until 2009 at the earliest.

While he thinks the near term still looks good, increasing uncertainty for 2008 means Garmin can no longer attract a premium multiple, especially in light of the recent market selloff. He cuts his price target to $90.

FRIEDMAN DOWNGRADES ALLIANT TECHSYSTEMS

Alliant Techsystems has negotiated definitive agreements with Canadian-based MacDonald, Dettwiler and Associates to acquire its Information Systems and Geospatial Information Services businesses for C$1.325 billion. Friedman analyst Patrick McCarthy says he cuts Alliant Techsystems (ATK) to market perform from outperform as he thinks the company growing its space unit makes perfect sense in the long term, but he sees the shares under pressure in the near term.

Given its breadth and depth of the acquisition, McCarthy thinks ATK's buying spree is likely complete, with only possible tuck-in acquisition to fully complete the picture. He thinks the critical question is if operating margin will be sustainable as the mix of U.S. business grows, which he doesn't think will be the case. He thinks market will view acquisition as too expensive until there better visibility into top-line growth and long-term margins.

He has a $136 price target, but thinks the specter of a potential equity offering is likely to cause a big overhang until resolved.

STIFEL NICOLAUS SAYS APOLLO GROUP's RESULTS BETTER THAN EXPECTED

Stifel Nicolaus analyst Jerry Herman says Apollo Group's (APOL) first quarter EPS of $0.83, vs. $0.65 a year ago, was well above his $0.74 estimate and $0.73 consensus with revenue 3% above his estimate. He notes total degree enrollment was 1% above his estimate, selling & promotional expenses were about 80 basis points under his estimate, reflecting lower-than-expected enrollment counselor compensation costs.

Herman says despite lower-than-expected start growth, the stock reaction may be positive given the level of outperformance elsewhere and magnitude of the stock's recent decline.

He says his $2.80 fiscal year 2008 (August) and $3.25 fiscal year 2009 EPS estimates are under review. He keeps buy and $78 price target on the stock.

JEFFERIES UPGRADES SHUTTERFLY TO BUY FROM HOLD

Jefferies analyst Youssef Squali says he finds Shutterfly (SFLY) attractively valued following a 38% decline in the stock in last three months, exacerbated recently by news of a 25% price cut on 4x6 prints by Snapfish. Fundamentally, he thinks SFLY is still attractive, evidenced by strong year-over-year growth in customers, orders and average order value over the last several quarters.

Squali notes that while price cut by Snapfish is a negative for SFLY and could set off a round of price cuts in the segment, he believes the risk to SFLY is somewhat mitigated by SFLY successfully pursuing a strategy of building a premium brand, which has allowed it to price products at a premium to competitors.

He sees $0.50 2008 EPS. He has a $30 price target on the stock.