Rob Black's Financial Market Roundup For May 10

by: Rob Black

Analysts at Morgan Stanley raised the price target for Countrywide Financial (CFC) to $55. Countrywide Financial is the biggest U.S. mortgage company.

JP Morgan Chase (NYSE:JPM) was removed from Sandler's Focus List on valuation.

With Wachovia (NASDAQ:WB) bidding for Golden West Financial (GDW), the question arises of who is next. Washington Mutual (NYSE:WM), Downey Financial (NYSE:DSL), and FirstFed Financial (FED) could be among the first to mull over deals. Some more names include Astoria Financial (NYSE:AF), Westamerica Bancorp (NASDAQ:WABC), and AmSouth Bancorp ((ASO)).

H&R Block (NYSE:HRB) said its U.S. retail tax preparation and related fees rose 4.5% this tax season to $2.5 billion, while the average fee per client served rose 6.6% to $160. Total clients served by the company's retail and digital tax business grew 1.4 percent to 19 million. Growth in the digital business, which includes online and software products, jumped 19%.

Lehman Brothers upgraded MetLife (NYSE:MET) to overweight. The firm is saying its own analysis suggests MetLife's private equity earnings will exceed the company's forecast.

The insurance industry is either resilient or arrogant — or maybe both. After a hurricane-ravaged year that was the worst in the industry's history, insurers are thriving again. Several are raising premiums, and cutting coverage; some may be ready to buy back their own stock or acquire other companies. Common sense says insurance companies should be struggling as there were $57 billion in massive losses of the 2005 hurricane season that should have crippled them. Yet they are enjoying profits and healthy balance sheets that have resulted from a continued hard market. A hard market is one where it is difficult for customers to get insurance and insurers can boost premiums.

Insurance experts predict another bitter Atlantic hurricane season starting on June 1, with as many as five major hurricanes expected to slam into the United States. By 2010 the insurance industry could see $100 billion in catastrophe losses in a single year.