Category Archives: High Tech Stocks

Oppenheimer Reiterates “Buy”, Raises PT On Eaton Corp (ETN)

Oppenheimer reported on Tuesday that it is maintaining an “Outperform” rating on the Ohio-based power management company Eaton Corp (ETN), but went on to raise its price target for the stock.

After meeting with Eaton’s management team, analyst Christopher Glynn reported some encouraging prospects for the company. Glynn noted that, “Near-term capital allocation priorities remain reducing debt incurred from the Cooper deal, with no significant acquisitions expected until integration is complete (~2 years remaining). ETN has deployed 50 full time acquisition integration team members to accelerate CBE progress, and thus lacks the resources to adequately pursue additional large deals.” Given the improving outlook, Oppenheimer raised its price target on the company from $73 to $78.

Eaton Corp shares traded higher on Tuesday, gaining 1.35% on the day. The stock is up 30% YTD.

The Deal: Blackstone’s Hilton Chain Checks Out $1.25B IPO

NEW YORK (TheStreet) — Blackstone Group (BX) is taking hotel operator Hilton Worldwide Holdings public in an IPO that is expected to raise up to $1.25 billion, according to a Thursday, Sept. 12, regulatory filing.

McLean, Va.-based Hilton owns and franchises a portfolio of 4,041 hotels in 90 countries and territories. The company’s brands include Waldorf Astoria, Conrad, DoubleTree, Embassy Suites, Hilton Garden Inn, Hampton Inn and Homewood Suites.

An eventual exit from the hotel chain will be something of a turnaround story, since Blackstone took Hilton private in October 2007 in a leveraged buyout worth $26 billion, right before the end of the LBO boom and as the recession was beginning to get under way.

Indeed, in 2008, the chain posted an operating loss of $4.5 billion. But with Blackstone at the helm, Hilton increased the number of its rooms by 34% or 170,000 rooms by June 2013 over the number it had in June 2007; grew the number of rooms in the development pipeline by 52% to 176,000 and increased the total number of rooms under construction by 121% to 92,000, according to the offering prospectus. The company posted 2012 adjusted Ebitda of $2 billion on revenue of $9.3 billion, up from adjusted Ebitda of $1.8 billion on revenue of $8.9 billion in 2011. The number of shares to be offered has not yet been fixed, nor did Blackstone indicate if it would sell shares. The filing does not disclose how many shares will be sold in the offering. It does not indicate how many shares Blackstone would sell in the offering either. Hilton said that proceeds would go toward paying down debt. As of the end of 2012, the company had long-term debt of $15.2 billion, down slightly from $16bn in 2011. However, given positive trends in the hospitality industry and the company’s own efforts to streamline its operations, Hilton’s initial public offering is expected to be welcomed with open arms. “Industry trends have been solid over the past several years, so the timing of the IPO is not surprising,” said an industry source who did not want to be named.

In fact, according to industry intelligence firm PKF Hospitality Research, or revenue per available room in the U.S., where 78% of Hilton’s rooms are located, will grow 7.2% in 2014 and 8.1% in 2015.

“Hotel stocks are trading at more or less 12 times enterprise value to projected 2014 Ebitda. Hilton should be there or even higher given its positive evolution,” the person said.

Hilton is not the only hotel company Blackstone is expected to take public. In July, Charlotte, N.C.-based Extended Stay America Inc. filed for a $100 million IPO. Private equity firms Blackstone and Centerbridge Partners LP and hedge fund firm Paulson & Co. acquired Extended Stay out of bankruptcy in 2010 for $3.9 million. Deutsche Bank AG, Goldman, Sachs & Co. and JPMorgan are the joint bookrunners on that deal.

IPO intelligence firm Renaissance Capital said the $100 million figure is likely a placeholder and that Extended Stay could raise between $500 million and $1 billion in the offering. So far this year, the performance of publicly traded hotel chains has been on an upward trend. Marriott International (MAR) share price has increased 10.8%, Hyatt Hotels’ (H) is up 16.6% and Starwood Hotels & Resorts Worldwide’s (HOT) is up 15.9%. Deutsche Bank, Goldman Sachs & Co., Bank of America Merrill Lynch and Morgan Stanley are the joint bookrunners on Hilton’s IPO. An exchange and ticker symbol for the public company have not yet been chosen. — Written by Taina Rosa in New York

Cramer’s 6 Stocks in 60 Seconds: WAG LINE KRO HPQ KO P (Update 1)

Check out Jim Cramer’s latest trading recommendations on “Action Alerts Plus”. (Updates from 10:24 a.m. ET with closing information.)

NEW YORK (TheStreet) — Here’s what Jim Cramer had to say on CNBC’s “Squawk on the Street”Thursday.

Goldman Sachs made Walgreen (WAG) a conviction buy selection, but Cramer warned the stock is getting rich in valuation. WAG jumped 5% to $53.29.

Cramer said Linn Energy (LINE) could be at the beginning stages of taking another leg higher. LINE was unchanged at $27.87. Kroger (KR) is a great company, Cramer said, adding that it has a strong private-label brand. KRO fell 1.2% to $15.50. Hewlett-Packard’s (HPQ) estimates are too high and revenue are not growing, according to Cramer. HPQ was lower by 1.4% to $21.96. Even though Coca-Cola (KO) is losing market share to PepsiCo (PEP), carbonated soft drinks continue to be a horrible category, he added. KO was flat at $38.44. Pandora’s (P) announcement regarding its new CEO has the stock ripping higher. Cramer said there are a lot of shorts in the name and the bulls really love this company. P showed that love, elevating by 12.1% to $2.59. To sign up for Jim Cramer’s free Booyah! newsletter, with all of his latest articles and videos, please click here. — Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell