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What Stocks Analysts Were Buzzing About This Week

Saturday, 9 Feb 2013 | 7:51 AM ET
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Find out what analysts were saying about Apple's cash hoard, Yum's China woes, margin pressure at McDonald's and why Disney shares will continue to rise in this week's CNBC.com Stock Blog roundup.

Apple is sitting on $137 billion in cash and has been reticent about returning significant amounts of it to shareholders. Hedge fund manager David Einhorn said the tech giant has a "depression-era mentality" about its cash hoard.

Sanford C. Bernstein's Toni Sacconaghi agrees that Apple should return more cash to shareholders. He told CNBC that Apple should take on debt and distribute that cash to shareholders. "The fact is for a company to have $137 billion and to be adding $40 billion a year is destroying economic value for shareholders," he said.

He also said if Apple can boost its yield to 4 percent, it would attract value investors and push up the stock price.

Yum Brands continues to deal with the fallout from a food safety investigation in China as consumers continue to avoid the owner of KFC. "This skews to the worst case for the company," David Palmer, senior food & restaurant analyst at UBS, told CNBC.

Palmer cut his price target for Yum on Tuesday from $69 to $63, with a "base case" estimate of an 8 percent decline for same-store sales in China with a 20 percent decline in profit in the country. The "worst case" from UBS shows a 25 percent profit decline with an implied stock price of $50.

McDonald's reported that same-store sales fell 1.9 percent globally in January, and Jefferies analyst Andy Barish warned of possible margin pressure ahead as it promotes its dollar menu more aggressively.

"We have the lowest estimates on the Street for fiscal 2013," he told CNBC on Friday. "We think the next couple of months are going to be negative comp numbers not only globally but in the U.S. as well given the tough comparisons they have coming up."

Disney Plans Stand-Alone 'Star Wars' Films
In a live interview with Julia Boorstin, Walt Disney CEO Bob Iger confirms speculation the company is working on stand-alone films based on ‘Star Wars’ characters. They will not be part of the main 9-part ‘Star Wars’ saga.

After strong earnings from Disney, Barton Crockett, an analyst at Lazard Capital Markets, increased his price target for the entertainment company's shares to $63 from $60 a share.

"I think the setup is good for the next couple of years," he said. "Then you go into 2015, 2016, you've got 'Star Wars' movies coming back. You've got the Shanghai theme park launch. There's a lot here to keep you interested in Disney, so I like the stock here." (100440157)

Despite strong January sales, retail stocks may face a more difficult spring as robust sales last year will be difficult to top, Brian Tunick, JPMorgan senior retail analyst, told CNBC this week.

"We think a lot of companies are going to give earnings guidance that could be meaningfully below the Street when they give Q1 and 2013 earnings," he said.

Tunick said Gap and Limited may issue conservative guidance.

By CNBC's Justin Menza

Additional News: Why Companies Will Be Pushed to Part With Cash

Additional Views: US Credit Risk Appetite Signals a 'Sell'?

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Disclosures:

Disclosures can be found in the individual Stock Blog posts.

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Disclaimer

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AAPL
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YUM
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DIS
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GPS
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LB
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MCD
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