Zacks Analyst Blog Highlights: Dell, WellPoint, Inc., Goldman Sachs, Morgan Stanley and UAL Corporation

Business Wire, June 22, 2009

http://www.profit.zacks.com/

CHICAGO -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Dell (Nasdaq: DELL), WellPoint, Inc. (NYSE: WLP), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS) and UAL Corporation (Nasdaq: UAUA).

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Here are highlights from Friday’s Analyst Blog:

WellPoint Gets Tech Savvy with Dell

Dell (Nasdaq: DELL) announced that WellPoint, Inc. (NYSE: WLP) has signed a five-year outsourcing agreement for field support and help desk services through Dell Global Services.

Dell will provide technical support to nearly all WellPoint employees in more than 200 U.S. locations as well as its mobile work force. WellPoint employees can now experience a consistent support program across all locations while Dell resolves technical issues in a timely manner.

We remain positive with management's efforts to increase operational efficiencies, which include outsourcing as in the case of the Dell deal and divestment of non-core division as in the recent sale of its PBM division to Express Scripts the second-largest pharmacy benefits manager in the U.S. based on prescriptions.

The Fed's New Power

There were several steps the Fed could have taken to have prevented the crisis or at least greatly minimized its impact. Not all of them require remarkable 20/20 hindsight.

On the other hand, the Fed does have considerable expertise in these matters, and proper supervision of banks is closely tied to monetary policy. The Fed already has some expertise in dealing with non-commercial banks -- for example the investment banks that are also primary dealers in government securities, such as Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS). As both a plus and a minus, of all the regulatory agencies the Fed is the most independent and the least susceptible to political interference (and oversight).

Taking UAL to Lower Atmosphere

We are significantly reducing our estimates on UAL Corporation ([Nasdaq: UAUA], United or UAL) to a per share loss of $8.05 from a loss of $1.50 for 2009 and to a loss of $1.50 from earnings of $1.75 for 2010.

We have lowered our revenue estimates following UAL's recent investor update on June 17, in which UAL estimated that second quarter mainline revenue passenger miles are expected to fall 11.7-12.7% and mainline unit revenue should drop 20.1-21.1%, while mainline unit operating costs excluding certain items will decline about 19.8-20.1%.

On a more positive note, at the end of the second quarter, UAL expects to be in full compliance with credit facility covenants, and increased its total cash balance during the quarter by $100 million to $2.8 billion.

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