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From S&P - Buy CSCO & Sell MBIA
S&P MAINTAINS BUY OPINION ON SHARES OF CISCO SYSTEMS CSCO; $23.08 January-quarter EPS of 36 cents, vs. 31 cents one year earlier, is in line with our estimate on higher-than-expected 17% sales growth. But monthly order pace slowed considerably in Jan., and Cisco guided April-quarter sales up 10%, below our 15% view. We are cutting our fiscal 2008 (Jul.) EPS estimate by 5 cents to $1.43, and our target price by $6 to $27 on a challenging environment. Still, we think Cisco has leading positions across several networking markets, experienced management and a strong balance sheet, and we believe it can take advantage of peer weakness during any temporary industry slowdown and gain market share. /A. Bensinger
S&P KEEPS SELL RECOMMENDATION ON SHARES OF MBIA INC. MBI; $14.96 MBIA announces plans to issue another 50.3 million common shares as part of a $750 million capital-raising plan that will be backstopped by Warburg Pincus. Also, the company says it is lowering its fourth-quarter mark-to-market writedowns by $110 million, but is raising its unallocated loss reserve by "$100 million to $200 million." We are lowering our 2008 operating loss estimate by 40 cents to $1.25, on the higher share count. Our $13 target price assumes the shares still trade at a discount to book value. We believe MBIA will need to raise more and, in our view, dilutive capital. /C. Seifert
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