For Immediate Release
Chicago, IL – December 14, 2011 – Zacks Equity Research
highlights: Celanese Corporation (CE) as the
Bull of the Day and China Life
Insurance (LFC) as the Bear of the Day. In addition,
Zacks Equity Research provides analysis on Urban Outfitters
Inc. (URBN), Gap Inc. (GPS) and
Abercrombie & Fitch Co. (ANF).
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:
Celanese Corporation (CE) reported
adjusted earnings of $1.27 per share for the third quarter of 2011,
beating the Zacks Consensus Estimate of $1.11. Quarterly revenues
grew 20% year over year to $1.81 billion, primarily driven by
higher pricing across all operating segments and favorable currency
impacts. The results surpassed the Zacks Consensus Estimate of
$1.69 billion.
Celanese raised its full-year 2011 outlook, encouraged by the
strength of its third-quarter 2011 performance, its confidence in
its earnings growth programs, and its expectations for a continued
modest global economic recovery. The company now expects 2011
operating EBITDA to be at least $280 million, higher than 2010's
results of $1,122 million.
In addition, adjusted earnings per share are anticipated to be
at least $1.30, higher than 2010's results of $3.37, based on a tax
rate and diluted share count of 17% and 159 million shares,
respectively. We maintain our Outperform recommendation on the
stock with a target price of $52.00.
Bear of the Day:
China Life Insurance's (LFC) third-quarter
earnings witnessed a steep decline from the comparable period of
last year. High surrenders, low premium income and increased
impairment losses led to a decline in the net income, while
increased unrealized losses in the investment portfolio led to
reduced shareholders equity.
Additionally, China Life inherently faces substantial interest
rate, market and currency risk. Although the company has a strong
brand name, it has to deal with considerable competition on the
domestic front, which limits earnings growth.
Overall, we expect some downside in the near term due to lack of
any significant growth catalyst. The quantitative Zacks Rank for
China Life is currently #4, indicating slight downward pressure on
the ADRs over the near term.
Latest Posts on the Zacks Analyst Blog:
Urban Outfitters Hears Cha-Ching
According to Reuters, the holiday season has started off well
for Urban Outfitters Inc. (URBN), the
retailer of apparel, footwear and accessories.
So far in the fourth quarter of fiscal 2011, comparable store
sales for the retail segment marked an increase of mid-single
digits as per a recent filing by the company.
Urban Outfitters continues to offer a diversified merchandise
mix with trendy products and a compelling shopping experience. We
believe that the company’s rapidly expanding online presence will
bring in incremental sales during the holidays as increasing number
of consumers are using smartphones and tablets to purchase
items.
Prior to the holiday sales, Urban Outfitters, which competes
with Gap Inc. (GPS) and
Abercrombie & Fitch Co. (ANF), marked a
3% decline in the comparable store sales at its retail segment
during the third quarter of fiscal 2011.
Comparable retail segment net sales by brands rose 14% at Free
People but fell 7% at Anthropologie while remaining flat at Urban
Outfitters. Direct-to-consumer comparable net sales surged 15%.
The company’s gross profit during the third-quarter tumbled 8.4%
to $216.1 million, whereas gross margin contracted 571 basis points
to 35.4% due to higher merchandise markdowns to sell the
slow-moving stock of women's clothing at both Anthropologie and
Urban Outfitters.
Going forward, we believe that the company’s increasing
inventory level remains a matter of concern as it might weigh upon
the margins in the coming quarters. Total inventories were
$367.4 million at the end of the third quarter, reflecting an
increase of 27% year over year. Besides, young men's and women's
apparel market included extremely competitive players.
Moreover, the company’s customers remain sensitive to
macroeconomic factors including interest rate hikes, increase in
fuel and energy costs, credit availability, unemployment levels,
and high household debt levels, which may negatively affect their
discretionary spending, and in turn, the company’s growth and
profitability.
Currently, Urban Outfitters holds a Zacks #5 Rank, which
translates into a short-term ‘Strong Sell’ rating.
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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ABERCROMBIE (ANF): Free Stock Analysis Report
CELANESE CP-A (CE): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
CHINA LIFE INS (LFC): Free Stock Analysis Report
URBAN OUTFITTER (URBN): Free Stock Analysis Report
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