CHICAGO, June 6, 2011 /PRNewswire/ -- Zacks Equity
Research highlights: Citrix Systems (Nasdaq: CTXS) as the
Bull of the Day and Staples, Inc. (Nasdaq: SPLS), as the
Bear of the Day. In addition, Zacks Equity Research provides
analysis McDonald (NYSE: MCD), Abercrombie &
Fitch (NYSE: ANF) and Wal-Mart (NYSE: WMT)
(Logo:
http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Full analysis of all these stocks is available at
http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Bull of the Day:
We upgrade our recommendation on Citrix Systems (Nasdaq:
CTXS) to Outperform backed by its excellent performance in
first-quarter 2011. The company is growing gradually as
virtualization and cloud computing becomes essential for large
enterprises to reduce costs when the economy begins to recover from
recession.
As a leading provider of enterprise software with desktop
virtualization at its core, Citrix will benefit from the increasing
trend of globalization. Management raised its financial forecast
for full fiscal 2011. We believe the virtualization market will
flourish in the near future with desktop virtualization as its
central point.
The company's major products such as XenDesktop, NetScaler and
Online Collaboration are generating huge revenue. As enterprises
throughout the world are rapidly moving into virtualized
environment, Citrix is witnessing massive demand for either new
licensing or system upgrade contract.
Bear of the Day:
Staples, Inc. (Nasdaq: SPLS) posted lower-than-expected
first-quarter 2011 results. The quarterly earnings of $0.28 per share missed the Zacks Consensus
Estimate of $0.32 and remained flat
compared with the prior-year quarter. Given the underperformance,
the company took a cautious stance and trimmed its fiscal 2011
earnings guidance.
The company now expects earnings between $1.35 and $1.45 per share, down from a range of
$1.50 to $1.60 projected earlier.
Management now forecasts sales to be flat to marginally positive in
the second quarter and to increase in the low single-digits in
fiscal 2011.
We remain cautious about the macroeconomic environment and
sluggish job market. As a result, consumers and small businesses
still remain watchful on their spending. We observe that the demand
for office products is closely tied to the health of the
economy.
Latest Posts on the Zacks Analyst Blog:
Demographics of Joblessness
In the overall big picture, men have fared far worse than women
in this downturn. There are two possible reasons for that. The
first is that the industries that have been particularly hard hit
in this downturn tend to be far more male-dominated than the
industries that have skated though this recession more or less
unscathed. The most glaring example of this would be the
construction industry versus the health care industry.
The second explanation is that on average, women tend to still be
paid far less than men do, and employers might be more prone to let
their relatively high priced male employees go first before their
cheaper female employees. The industry effect is probably the
bigger one, but the two are not mutually exclusive and both might
be playing a role.
Teens, regardless of gender have had a very hard time of it in this
recession. Just go to a McDonald's (NYSE: MCD) and you will
see this for yourself. Normally the blemishes you see on the
cashier's face are acne, not wrinkles and age spots as is the case
now.
Things got a little bit better teens in May. The teen unemployment
rate fell to 24.2% from 24.9% in April, and is down from 26.4% a
year ago. The trend looks encouraging, but don't get too excited
about it, as it is mostly an illusion. The participation rate fell
to 33.3% from 33.7% in March, and is well below the 35.4% rate a
year ago. The percentage of teens who actually have a job fell to
25.2% from 25.3% in April, and is down from 26.1% a year ago.
While for the most part the earnings from teen jobs tend to go
towards clothes from Abercrombie & Fitch (NYSE: ANF) and
other teen clothing stores, for many it is a significant part of
paying for college. Also, when teens work, they learn important job
skills, such as the importance of actually showing up, and doing so
on time. The extremely low levels of teens working is not a good
sign for the future.
Overall, this was an awful report. It doesn't really matter if
you just look at the headline numbers or you dig further into the
details. The internals of the report were on the weak side. The
unemployment rate rise was not due to a rise in the participation
rate, it was unchanged. If it had been a rising participation rate,
one could safely ignore the bump in the unemployment rate.
A rising participation rate would be a good sign for the economy
even if it raised the unemployment rate. The 0.1 point increase in
the unemployment rate puts us back to the highest level since
December. The job creation pace was much lower than expected,
particularly on the private sector side.
The drop in government jobs was expected. The household survey was
only a little bit more upbeat, and still pointed to an anemic gain
of just 105,000 jobs. The cuts in government employment were bit
larger than what the consensus was looking for, but not exactly
shocking.
All things considered, it is better to see the job creation in the
private sector, but those public sector jobs are held by real
people. Wal-Mart (NYSE: WMT) does not ask if you are in the
public or private sector at the checkout counter. The loss of those
local government jobs has been a serious drag on job creation and
thus the overall economy.
The pace of job creation is not going to put a dent in the huge
numbers of people who are without work and want it. Yes, the pace
of job creation in this recovery is much better than it was coming
out of the last recession, but that is pretty cold comfort for
those who are being forced into abject poverty because they can't
find work despite months and months of pounding the pavement (or
the keyboard, as is more likely these days).
Get the full analysis of all these stocks by going to
http://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
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