For Immediate Release
Chicago, IL – February 6, 2012 – Zacks Equity Research
highlights Aetna Inc. ( AET) as the Bull of the
Day and JAKKS Pacific ( JAKK) as the Bear of the
Day. In addition, Zacks Equity Research provides analysis on
U.S. Bancorp ( USB), Mitsubishi UFJ
Financial Group Inc. ( MTU) and UMB Financial
Corporation ( UMBF).
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:
Aetna Inc.'s ( AET) fourth quarter 2011 results
came in line with the Zacks Consensus Estimate. Earnings were,
however, up 54% year over year. The quarter primarily benefited
from low medical utilization and a decline in operating
expense.
Overall, Aetna performed well in 2011, beating earnings
estimates every quarter, on the back of low medical utilization,
pricing discipline, medical cost management strategies and cost
controls. The year saw the company making strategic investments in
acquisitions and technologies, with an intention to extend Aetna's
core health business and also to capitalize on exciting new
consumer and provider opportunities emerging in the marketplace.
Aetna's strong operating results and significant capital generation
will allow it to continue investing for the future.
We expect the company to continue performing well in 2012. We
expect Aetna to continue to benefit from gains in the Medicaid and
Medicare segments, fast growing health services segment and a
strong balance sheet.
Bear of the Day:
Challenging holiday sales hit JAKKS Pacific (
JAKK) badly, which consequently made the company cut its fiscal
2011 guidance. The labor shortage in Asia and an increase in input
costs also remained a drag on the stock.
An underperformance in the third quarter's top and bottom line
makes us cautious on the stock. Hence, we downgrade the stock from
Neutral to Underperform recommendation.
Our six-month target price of $13.00 equates to about 13.0x our
estimate for 2012. The target price implies an expected total
return of negative 10.1% over that period.
Latest Posts on the Zacks Analyst Blog:
U.S. Bancorp to Buy Trust
Business
U.S. Bancorp ( USB) is making
a strategic acquisition for its institutional trust and custody
division. The company through its lead bank, U.S. Bank National
Association, has entered into a definitive agreement to buy from
Union Bank, N.A. its institutional trust business that offers
services to retirement plans, labor management trusts and
registered investment advisors.
Union Bank is a subsidiary of UnionBanCal Corp., which is
owned by Mitsubishi UFJ Financial Group Inc. (
MTU). Terms of the transaction were not disclosed.
The deal is a strategic fit for both U.S. Bancorp and Union
Bank. For U.S. Bancorp, the acquisition will bring in approximately
4,300 client relationships representing $42 billion in assets under
administration. The purchase will expand the company’s footprint
and boost its market share in retirement plan, labor management
trust and registered investment advisor business segments.
On the other hand, Union Bank plans to strategically augment its
banking, global treasury management, asset management, brokerage,
corporate trust and institutional custody business segments
nationwide. Hence, the sale would help the company to reinvest
capital in its core business.
Recent Acquisitions
U.S. Bancorp seems to be on an acquisition spree. Recently, the
company’s lead bank, U.S. Bank National Association, agreed to
acquire the Indiana corporate trust business of UMB Bank, a
subsidiary of UMB Financial Corporation ( UMBF).
The deal will expand its trust business and is expected to be
accomplished on March 2, 2012. However, the terms of the agreement
were not disclosed by the company.
Last week, through its lead bank, U.S. Bancorp acquired the
banking operations of BankEast, a subsidiary of BankEast
Corporation, in a deal assisted by the Federal Deposit Insurance
Corporation. BankEast is based in Knoxville, Tennessee.
For U.S. Bancorp, the deal is a strategic fit as the community
banking model of BankEast is quite attractive and the deal would
help it to expand in the Tennessee market. The 10 branches of
BankEast in the Knoxville area will raise U.S. Bank’s total branch
count in Tennessee to 91.
Our Take
U.S. Bancorp has a well-balanced business model, with
non-interest revenue representing nearly half of its total revenue.
Its results have been driven by a combination of acquisitions and
organic growth. Also, we expect continued investments in core
banking and fee-based operations to generate long-term revenue
growth.
Going forward, we expect U.S. Bancorp to benefit from its
diversified revenue base and strategic acquisitions, thereby
posting growth in core earnings going forward. Yet, a tardy
economic recovery and a low interest rate environment along with
regulatory issues remain our concern.
U.S. Bancorp shares maintain a Zacks #2 Rank, which translates
into a short-term Buy recommendation.
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)
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AETNA INC-NEW (AET): Free Stock Analysis Report
JAKKS PACIFIC (JAKK): Free Stock Analysis Report
MITSUBISHI-UFJ (MTU): Free Stock Analysis Report
UMB FINL CORP (UMBF): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
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