COG Cabot Oil and Gas Corp

For Immediate Release

Chicago, IL – November 18, 2011 – Zacks Equity Research highlights Cabot Oil & Gas (COG) as the Bull of the Day and Honda Motor Company (HMC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sears Holdings Corporation ( SHLD), Wal-Mart Stores Inc. (WMT) and Target Corporation (TGT).

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 maintaining our Outperform recommendation on shares of Cabot Oil & Gas (COG), reflecting its impressive exposure to the high-return Marcellus and Eagle Ford 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 it to bolster its natural gas operations. Buoyed by the growth momentum from the company s drilling efforts, particularly in its North region, Cabot recently reported robust third-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.

Bear of the Day:

Honda Motor Company's (HMC) financial results are severely affected by a stronger Yen and the catastrophic disaster in Japan in March. Furthermore, recent floods in Thailand also damaged the company's operations. As a result, Honda could not provide guidance for the fiscal year ended March 31, 2012. And in the second quarter of fiscal 2012, Honda's profits tumbled 55% to 60.4 billion Yen ($788 million) or 33.53 Yen ($0.44) per share on a year-over-year basis. These factors have led us to downgrade our recommendation on shares of the company to Underperform with a target price of $27.

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Sears Continues to Report Losses

Sears Holdings Corporation ( SHLD) reported a third-quarter 2011 adjusted loss of $2.57 per share, well above the Zacks Consensus Estimated loss of $2.14 per share. The loss widened drastically from the prior-year quarter loss of $1.71 per share. Including special items, the loss per share came in at $3.95 compared with loss per share of $1.98 in the prior-year quarter.

The drop in quarterly performance was primarily due to sluggish top-line performance and decreased margins.

Quarterly Detail

For the third quarter of 2011, revenue decreased $113.0 million to $9,565.0 million compared with $9,678.0 million in the prior-year quarter. Moreover, revenue missed the Zacks Consensus Estimate of $9,610.0 million.

The decline in quarterly revenue primarily reflects a drop of 7.8% in comparable store sales at Sears Canada, partially offset by favorable foreign currency effects. Moreover, the company witnessed a 0.8% decline in domestic comparable store sales, including a 0.7% fall at Sears Domestic while comparable store sales at Kmart inched down 0.9%.

Segment wise, during the reported quarter, sales at Sears Domestic and Kmart dropped 0.5% to $5,114.0 million and 1.1% to $3,343.0 million, respectively. Moreover, sales at Sears Canada registered a decline of 4.1% to $1,108.0 million.

Revenue decline at Sears Domestic segment reflects weak sales of appliances and consumer electronics, partially offset by increases in apparel. Decline in the consumer electronics, drug and pharmacy categories were partially offset by an increase in outdoor living, grocery and household, tools, appliances and footwear, resulting in a drop in sales at the company’s Kmart stores.

From the beginning of first quarter of 2011, the company includes sales from its online channels, i.e. sears.com and kmart.com in comparable store sales. This move has positively benefited the company by improving comparable store sales by approximately 0.4% in the third quarter of fiscal 2011.

Adjusted EBITDA for the third quarter of 2011 was negative $178.0 million compared with a negative $38.0 million in the prior-year quarter. EBITDA margin also contracted to negative 1.9% from negative 0.4% in the prior-year quarter.

Balance Sheet and Cash Flow

Sears Holdings ended the quarter with cash and cash equivalents of $624.0 million and a long-term debt-to-capitalization ratio of 33.1% compared with a cash balance of $790.0 million and long-term debt-to-capitalization ratio of 39.3% in the prior-year period.

Year-to-date, the company made significant cash deployments including $163.0 million toward share buybacks, $326.0 million as capital expenditures and $323.0 million for pension and post retirement benefit plans.

Sears Holdings, which competes with Wal-Mart Stores Inc. (WMT) and Target Corporation (TGT), currently has a Zacks #3 Rank, implying a short-term ‘Hold’ rating. Besides, the company retains a long-term ‘Underperform’ recommendation.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

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CABOT OIL & GAS (COG): Free Stock Analysis Report
 
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