CHICAGO, June 22, 2011 /PRNewswire/ -- Zacks Equity
Research highlights: Cabot Oil & Gas Corp. (NYSE: COG)
as the Bull of the Day and JDS Uniphase (Nasdaq: JDSU), as
the Bear of the Day. In addition, Zacks Equity Research provides
analysis on Nabors Industries Ltd. (NYSE: NBR),
Patterson-UTI Energy (Nasdaq: PTEN) and Pride
International (NYSE: PDE).
(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 are upgrading Cabot Oil & Gas Corp. (NYSE: COG)
shares to Outperform from Neutral, reflecting the company's
impressive exposure to the high-return Marcellus and Haynesville
Shale plays, as well as its above-average production growth.
Furthermore, the capital infusion of over $200 million bodes well for Cabot, which will
help the company bolster its natural gas operations.
Buoyed by the growth momentum from the company's drilling
efforts, particularly in its North region, Cabot recently reported
better-than-expected first-quarter results. A relatively low-risk
profile and longer reserve lives are other positives in the Cabot
story.
Considering these factors, we believe Cabot is well positioned
going forward and consider it an attractive investment. Our
$71 price objective is based on a
multiple of 16.8X trailing twelve-month cash flow.
Bear of the Day:
We have downgraded our recommendation on JDS Uniphase
(Nasdaq: JDSU) to Underperform. Recent trends in the optical
component industry indicate a glut of inventory on the part of the
telecom carriers. The North American and European markets have yet
to completely recover from the recession.
In the meantime, several industry players indicated that
China may not be able to
compensate the loss of the developed markets fully. Moreover, the
devastating earthquake and tsunami in Japan will reduce demand and may disrupt the
supply chain. We believe the weak industry demand may continue for
a couple of quarters.
Excluding these broad-based macro scenarios, JDS Uniphase is
facing growing competition in those sub-segments of the optical
network industry, which had been exclusive to the company.
Meanwhile, the stock price of JDS Uniphase surged more than 86%
last year.
Latest Posts on the Zacks Analyst Blog:
Nabors Guides for Q2
Weighed down by lower-than-expected performances in the Pressure
Pumping and International business units, Nabors Industries
Ltd. (NYSE: NBR) projects operating income in the range of
$165 million to $170 million for the
second quarter of 2011. The negative effects will be partially
offset by strong contributions from the U.S. Lower 48 and Canadian
operations.
For full-year 2011, global land drilling contractor, Nabors,
expects operating income to reach about $900
million.
Management commented that Superior Well Services, bought in
August, 2010, to boost pressure pumping operations, failed to
function as per expectation in the second quarter, thereby hurting
results. This was primarily due to unfavorable weather conditions
in the Bakken and Marcellus areas coupled with glitches in start-up
of the new equipments. Superior is expected to operate smoothly by
the end of 2011.
Internationally, delays in contract awards along with
geo-political disruptions slowed down the company's activities in
Saudi Arabia and Iraq and, to some extent in Yemen, Colombia and Mexico. We expect this tardiness to persist
throughout 2011 and improve in 2012.
On a positive note, Nabors' U.S. Lower 48 segment won six more
new build contracts since the last quarter and is in the process of
working with nine legacy rigs.
Barbados-based Nabors conducts
oil, gas and geothermal land drilling operations and is one of the
largest land well servicing companies and workover contractors in
the U.S. The company competes with peers such as Patterson-UTI
Energy (Nasdaq: PTEN) and Pride International (NYSE:
PDE).
We are maintaining our long-term Neutral rating on the
stock.
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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