Ratings on (SNHY) (SPWRA) (TI) (WMG) Downgraded

Ratings on shares of Sun Hydraulics Co. (NASDAQ: SNHY), SunPower Co. (NASDAQ: SPWRA), Telecom Italia (NYSE: TI) and Warner Music Group Corp (NYSE: WMG) were downgraded by analysts.

Robert W. Baird downgraded Sun Hydraulics Co. (SNHY) from an “outperform” rating to a “neutral” rating. They have a price target of $52.00 on the company, up from $47.00.

Brigantine downgraded SunPower Co. (SPWRA) from a “buy” rating to a “hold” rating.

Sanford C. Bernstein downgraded Telecom Italia (TI) from an “outperform” rating to a “market perform” rating.

Needham & Company downgraded Warner Music Group Corp (WMG) from a “buy” rating to a “hold” rating.

All of Warner Music Group (WMG) May Be Acquired by KKR, BMG

A decision hasn't been made on the matter yet, but reports are the partnership of BMG and private equity firm KKR are contemplating making a bid for all of Warner Music Group (NYSE:WMG) after being turned down for its bid on the Warner/Chappell publishing arm.

Warner/Chappell is the company’s cash cow, since it has less overhead and a steady royalty stream. The rest entails more expensive contracts to manage performing artists like Led Zeppelin and James Taylor.

Private equity firms Bain Capital and Thomas H. Lee Partners are looking to exit the music business after buying the beleaguered company alongside chairman Edgar Bronfman in 2004. The consortium took WMG public in 2005, though they still own more than half the company, according to Thomson One. They also occupy eight of the company’s 12 board seats.

A bid for the whole company emerged from a team led by Ron Burkle’s Yucaipa Companies that supposedly includes an endorsement from media mogul Sean Parker, says a source familiar with the process.

Warner Music closed Monday at $5.51, up $0.07, or 1.29 percent.




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Sirius (SIRI) to be Killed by Apple (AAPL)?

With news Apple (NASDAQ:AAPL) is in negotiations with major music labels Universal Music Group, Sony Music Entertainment (NYSE:SNE), Warner Music Group Corp. (WMG) and EMI Group Ltd.for the purpose of improving iTunes customers’ access to music on multiple devices, the question is how painful that could become to Sirius (NASDAQ:SIRI), which is finally starting to get some competition, and some of it is potent.

"Clearly, Sirius XM Radio is in no position to take a hit from Apple," says Seeking Alpha, "whose confidence is expressed well through this segment of their annual report:

“'Additionally, the Company’s strategy includes expanding its distribution network to effectively reach more customers and provide them with a high-quality sales and post-sales support experience. The Company is therefore uniquely positioned to offer superior and well-integrated digital lifestyle and productivity solutions.'

"I believe that the price of SIRI stock may drop significantly if Apple follows through with its plans with the aforementioned various music industry giants and takes a generous slice of Sirius XM Radio’s pie of profit."

Sirius plunged Monday to closed at $1.74, dropping $0.07, or 3.87 percent.




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Warner Music (WMG) Bids Starting to Come In

Several parties have started putting in bids for parts or all of Warner Music Group (NYSE:WMG), the world's third largest music company, sources said on Tuesday.

The bidders, who have had a preliminary review of Warner Music's books, include private equity firms, investor groups and strategic bidders like music companies.

Names that have moved ahead in the process include private equity firm KKR [KKR.UL] through its BMG Music Rights joint venture with Bertelsmann (BTGGg.F). Others include billionaire Len Blavatnik, who already owns around 2 percent of Warner Music. Vivendi's (VIV.PA) Universal Music Group and Sony Corp's (NYSE:SNE) label group Sony Music Entertainment and its song publishing joint venture Sony/ATV Publishing are also said to have moved ahead in pursuing their interest.

More official bids are expected this week.

The bids for Warner Music come even as investors are watching out for the next move from Citigroup (NYSE:C) which took control of rival music company EMI Music last month and is expected to soon put it up for sale.



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Warner Music Group (NYSE:WMG) Estimates Slashed on "Challenging Environment"

Citing a challenging environment for the music industry, Needham & Company slashed their estimates on Warner Music Group (NYSE:WMG).

Needham said, "WMG is expected to report FY1Q11 (ended December 31, 2010) earnings in early to mid February, 2011. We are lowering our FY1Q11 estimates by 19% YoY to $747M, from $800M, and our FY2011E revenue estimates by 5% to $2.641B, from $2.782B, to reflect a challenging environment in the music industry. With declining physical sales showing little or no signs of reversal, we are lowering our estimates for the quarter and the year. Further reductions are possible and we will pay close attention to management comments on the earnings call. As a result of lowering our estimates for revenues, we are lowering our 1Q11 EPS estimate to a loss of $0.20, from our previous estimate of a loss of $0.11, and we are lowering our FY 2011 EPS estimates to a loss of $1.11, from our previous estimate of a loss of $0.84."

Needham & Company maintains a "Buy" rating on Warner Music Group, which closed Friday at $5.36, down $0.03, or 0.56 percent. Needham has a price target of $8.50 on them.