Canaccord Genuity analysts released their stocks picks to avoid for the upcoming year and that includes Intel, LM Ericsson, Research In Motion, Powerwave Technologies, Netflix and Intuit.
Intel Corp. (NASDAQ:INTC)
Chip giant Intel has lowered its fourth-quarter guidance citing hard disk drive (HDD) supply shortages relating to flooding in Thailand. The company now expects fourth-quarter revenue to be $13.7 billion, plus or minus $300 million, on both a GAAP and non-GAAP basis, lower than the previous expectation of $14.7 billion, plus or minus $500 million. Wall Street expects Intel to generate revenue of $14.65 billion, according to analysts polled by Thomson Reuters.
The company expects hard disk drive supply shortages to continue into the first quarter, followed by a rebuilding of microprocessor inventories as supplies of hard disk drives recover during the first half of 2012.
While we acknowledge supply disruption to be severe and likely to worsen in Q1, we see additional negative issues with demand softening for motherboard makers and ODMs while component inventories build downstream, analyst Bobby Burleson wrote in a note to clients.
LM Ericsson Telephone Co. (NASDAQ:ERIC)
Telecom equipment maker Ericsson has reiterated its 2010-13 revenue and operating income CAGR targets of 4 percent to 10 percent and 5 percent to 15 percent, respectively. However, analyst Michael Walkley said management discussed its expectation for continued gross margin pressure over the next several quarters due to sales mix and macro headwinds.
Research In Motion Ltd. (NASDAQ:RIMM):
RIM, known for its BlackBerry smartphones, has provided a weak fourth quarter outlook. The Canadian company has said it expects fourth-quarter earnings of 80 to 95 cents a share on revenue of $4.6 billion to $4.9 billion. The outlook came in below Thomson Reuters polled analysts' consensus estimates of $1.18 a share on revenue of $5.12 billion.
Consistent with our checks indicating slowing BB 7 sales post the iPhone 4S launch in October, RIM guided Q4/F2012 sales and earnings well below consensus, said analyst Walkley.
Netflix, Inc. (NASDAQ:NFLX)
Analyst Jeff Rath said while the macro environment appears positive for Netflix, he believes that the company faces numerous challenges, including subscriber losses, rising content costs and an increased competitive landscape.
Intuit, Inc. (NASDAQ:INTU)
Intuit is a very well run and positioned firm. We simply would like to buy the stock a few multiple points cheaper in order to compensate for the risk that the SMB market stays in the dumps longer than expected, analyst Richard Davis said.
Powerwave Technologies, Inc. (NASDAQ:PWAV)
Analyst Walkley said the company's results could be hurt by significant slowdown in spending by North American network operators, a significant reduction in orders from OEMs, and weakness in the Western Europe, Eastern Europe, and Middle East markets. In addition, the analyst has said the visibility remains limited for the provider of wireless coverage solutions.