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|User Info||If a big recession is coming (starting), what's your ad; entered at 2007-12-01 14:00:40|
Registered: 2007-09-10 Scottsdale, AZ
November 30, 2007, 4:25 pm|
Goldman Turns Wary On Tech Sector; Cuts Estimates, Targets For Dozens Of Stocks
Posted by Eric Savitz
Wary comments by Goldman Sachs this morning on the outlook for enterprise technology spending are apparently weighing on tech shares.
Goldman analysts Jim Covello, Sarah Friar and Derek Bingham wrote that they have become incrementally more cautious on tech fundamentals given the current macroeconomic backdrop, which suggests soft capital spending in 2008, in particular for the U.S. We believe CIOs may delay their purchases in the early part of 2008,they wrote.
The Goldman analysts write that this is not a call to sell all tech stocks, and that while there is likely little upside for some areas of tech, in particular software, on which the firm turned cautious earlier this week, other areas have underperformed this year, including hardware and semis, and already likely reflect the pending fundamental weakness.
That said, Goldman reduced estimates and cut price price targets for many names, with particular focus on companies with large enterprise exposure and significant dependence on the U.S. consumer.
The list of companies affected by todays Goldman call is long:
In the communications sector, they cut estimates and/or price targets for:
In the hardware sector, Goldman cut estimates and/or price targets for:
Payment processing companies affected by estimate and/or price target changes include:
Global Cash Access
IT services companies affected include:
Affiliated Computer Services
Chip stocks affected by estimate cuts and/or price target changes include:
Advanced Micro Devices
Goldman earlier this week made similar moves on software and analog semis.
Todays Goldman calls helps explain the relative underperformance of tech stocks today; while the Dow gained almost 60 points or 0.45%; the Nasdaq Composite is off 7 points, or 0.3%.