Analysts Unsure Egghead Will Stay Crack Performer

Here are recent brokerage-house and investment-advisory opinions affecting Pacific Northwest stocks. The Seattle Times neither advises against nor recommends purchase of these stocks. Stock symbols and stock quotations are listed in parentheses, the latter reflecting prices when reports were issued. Ratings definitions vary, but most companies follow a 1-2-3-4-5 format, with 1 a buy or highest; 2 a mild buy, also called outperform, attractive or above average; 3 a neutral or hold; 4 a mild sell or unattractive, below average or underperform; and 5 a sell.

Analysts were impressed with Egghead's (EGGS, $25.75) recent profits, but were less energetic about the computer-software retailer's outlook.

Ragen MacKenzie's Mary Fleckenstein rated the stock "hold." She said she was optimistic about the next 12 months, but a little concerned because other retailers are expanding their networks. (2/18)

Childress Investment Research's Les Childress cut his rating from "aggressive buy" to "buy" because the price of Egghead has been so strong lately. (2/21)

Donaldson, Lufkin & Jenrette's Scott Smith and Mark Wolfenberger maintained their "moderately attractive" rating, saying the profits underperformed a bit, but the ability to sustain profits momentum is in place. (2/19)

-- COSTCO WHOLESALE (COST, $39). Analyst: Milton Schlein, Value Line. Recommendation: Highest. Comment: Costco stock will continue to be a market leader. (2/28)

-- DATA I/O (DAIO, $6.125). Analyst: Rick Owens, Pacific Crest Securities. Recommendation: Not rated. Comment: "The outlook for improving profit levels this year is good." (2/28)

-- DIGITAL SYSTEMS (DGTL, $14.50). Analyst: Mary Fleckenstein, Ragen MacKenzie. Recommendation: Accumulate. Comment: Profits volatility makes this appropriate only for risk-oriented investors. (2/20)

-- EXPEDITORS INTERNATIONAL (EXPD, $33.75). Analyst: Bill Whitlow, Pacific Crest. Recommendation: Accumulate. Comment: 1991 profits underperformed, forcing down '92 estimate. But long-term prospects are sound. (2/28)

-- IMMUNEX (IMNX, $52.50). Analyst: Jason Swarz, First Boston. Recommendation: Buy. Comment: Outstanding product pipeline. Settlement of suit with Genetics Institute no near-term threat. (2/26)

-- McCAW CELLULAR (MCAWA, $34.75). Analyst: Mary Fleckenstein, Ragen MacKenzie. Recommendation: Hold. Comment: Subscriber growth should remain strong, although at a slower rate because of the larger base. (2/19)

-- MICROSOFT (MSFT, $115.75). Analyst (1): Les Childress, Childress Investment Research. Recommendation: Buy. Comment: Pullbacks in stock price are buying opportunities. Analyst (2): Donaldson, Lufkin & Jenrette. Recommendation: Buy. Comment: Rating upgraded because of expected strong showing of new Windows programs. Twelve-month target price: $160. (2/26)

-- NORDSTROM (NOBE, $40). Analyst (1): Rick Owens, Pacific Crest. Recommendation: Hold. Comment: Results met expectations; holding fiscal-year profits estimate of $1.95 a share. (2/28) Analyst (2): Michael Schiffman, Value Line. Recommendation: Average. Comment: Wait for a return of year-over-year quarterly profits improvement to buy stock. (2/28)

-- PENWEST (PENW, $32). Analyst: Phillip Seligman, Value Line. Recommendation: Average. Comment: Potential demand for Penwest products suggests "handsome total returns" over three to five years. (2/21)

-- PUGET SOUND BANCORP (PSNB, $28.25). Analyst: Les Childress, Childress Investment Research. Recommendation: Hold. Comment: Lowered from a "buy" because of higher price. (2/24)

-- PUGET POWER (PSD, $26). Analyst: Paul Debbas, Value Line. Recommendation: Below average. Comment: Profits growth should be flat to down through 1993. (2/28)

-- QFC (QFCI, $40). Analyst: Philip Mulqueen, Value Line. Recommendation: Above average. Comment: With cash growing and other grocers stressed, don't be surprised to see acquisitions accelerate. (2/21)

-- WASHINGTON MUTUAL (WAMU, $20). Analyst: Eric Hemel, First Boston. Recommendation: Buy. Comment: Upgraded from a hold. Failure to recommend a buy in the past year was "our worst mistake." (2/3)

-- WASHINGTON WATER POWER (WWP, $33). Analyst: Paul Debbas, Value Line. Recommendation: Below average. Comment: "Total return prospects through 1995-97 are subpar." (2/28)

-- WESTMARK INTERNATIONAL (WMRK, $58.75). Analyst (1): Peter Musser, Ragen MacKenzie. Recommendation: Hold. Comment: After SpaceLabs spinoff, both companies should have above-average profits-growth prospects. (2/20) Analyst (2): Keith Markey, Value Line. Recommendation: Above average. Comment: 1992 profits expected at $2.50 a share, a jump from 1991's $1.55. (2/13)

Stock Talk appears weekly in the Business Monday section of The Seattle Times.