CHICAGO, Jan. 7, 2011 /PRNewswire/ -- Zacks Equity
Research highlights: Oracle Corp (Nasdaq: ORCL) as the Bull
of the Day and Hudson City Bancorp (Nasdaq: HCBK) as the
Bear of the Day. In addition, Zacks Equity Research provides
analysis on Caterpillar Inc. (NYSE: CAT), Bucyrus
International Inc. (Nasdaq: BUCY) and Joy Global Inc.
(Nasdaq: JOYG).
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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:
Oracle Corp's (Nasdaq: ORCL) second quarter 2011 results
outpaced Zacks Consensus Estimates, owing to strength in new
software license sales. The company's robust third quarter 2011
outlook led to a substantial rise in earnings estimates for the
third quarter, fiscal 2011 and fiscal 2012 that are up by 6.8%,
5.3% and 5.2%, respectively.
Oracle's acquisition of Sun Microsystems will provide an impetus
for growth in fiscal 2011 and beyond with higher top and
bottom-line growth along with increased accretive synergies
strengthening its competitive position. However, integration
issues, intense competition and slow growth in IT spending are
areas of concern.
We are positive on Oracle's longer-term growth prospects, given
its growing market share, focus on improving profitability, new
product pipeline, cost saving initiatives and robust free cash
flow. We therefore upgrade the stock to Outperform and raise our
price target to $37.00 on our
incrementally positive outlook on the stock.
Bear of the Day:
Hudson City Bancorp's (Nasdaq: HCBK) third-quarter
earnings came a penny behind the Zacks Consensus Estimate,
reflecting lower interest margin, increased noninterest expense and
a higher provision for loan losses.
We expect pressure on earning assets and margin to continue with
the low interest rate environment, which is anticipated to persist
in the upcoming quarters, thereby dampening investors appetite for
this stock. Along with this, the elevated levels of credit costs
remain a concern for the company.
Continuing high levels of unemployment and deterioration of home
prices still prevalent in some of its lending markets arouses our
concern. Moreover, the recent regulatory moves are also expected to
pull down the company's bottom line. As such, we reiterate our
Underperform recommendation on the stock.
Latest Posts on the Zacks Analyst Blog:
CAT Suspends Mining Shovel Plan
Caterpillar Inc. (NYSE: CAT) has decided to shelve its
earlier announced plan of producing a full range of mining shovels
at its Aurora, Illinois facility.
The decision is a an outcome of Caterpillar's pending purchase of
Bucyrus International Inc. (Nasdaq: BUCY), a South
Milwaukee-based manufacturer of mining equipment and mining
shovels, in a transaction worth $8.6
billion.
The increasing demand for mining trucks has spurred the
corresponding demand for loading tools such as mining shovels.
Caterpillar, with the intent to position itself as the leading
manufacturer of products and solutions for the global mining
industry, had announced in June 2010
that it will produce a full range of mining shovels, ranging from a
125-ton model to an 800-ton model, at its Aurora, Illinois facility. The company had
then provided early 2011 as the time frame for the facility to
start production of the new 125-ton class shovel.
In November, 2010, Caterpillar announced that it will buy
Bucyrus, touted to be the biggest deal ever in the company's
history. The deal capitalizes on the rising demand for coal and
minerals triggered by growth in the emerging nations.
In order to conserve resources and eliminate business risks
associated with internal development, Caterpillar will suspend the
Illinois mining shovel plan.
Caterpillar intends to evaluate the Bucyrus shovel program in order
to assess the proper allocation of its resources for additional or
different products.
The mining shovel line at the Aurora plant would have created about 200
assembly worker jobs and 100 support and management jobs. This
might have offset some of the job losses when Caterpillar shifts
its excavator line to Texas in
2013. Aurora has been exclusively
producing excavators since 1972.
The Aurora factory will
continue to focus on the production of wheel loaders and excavators
for the time being. The company, however, added that if the Bucyrus
deal falls through, it would remobilize the shovel program and
resume its development at the Aurora plant as originally planned.
The Bucyrus acquisition will position Caterpillar as the leading
global mining original equipment manufacturer and the combined
product portfolio will dwarf Joy Global Inc. (Nasdaq: JOYG),
the only U.S based manufacturer of surface and underground mining
equipment. We believe Caterpillar's strong brand name, pricing
power and global dealer network place it in an advantageous
position to exploit the growing need for infrastructure development
worldwide.
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
Every day, the analysts at Zacks Equity Research select two
stocks that are likely to outperform (Bull) or underperform (Bear)
the markets over the next 3-6 months.
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