CHICAGO, Sept. 21, 2011 /PRNewswire/ -- Zacks Equity
Research highlights Humana, Inc. (NYSE: HUM) as the Bull of
the Day and Gentiva Health Services (Nasdaq: GTIV) as the
Bear of the Day. In addition, Zacks Equity Research provides
analysis ConAgra Foods Inc. (NYSE: CAG), HJ Heinz Co.
(NYSE: HNZ) and Kraft Foods Inc. (NYSE: KFT).
(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:
Humana, Inc.'s (NYSE: HUM) second-quarter earnings
modestly beat the Zacks Consensus Estimate, owing to improved
consolidated premiums and ASO fees that also drove the benefit
ratio along with improvement in medical and specialty memberships.
Humana benefits from the new rule in health care reform, which led
to an efficient deployment of capital.
The upcoming AMS acquisition is further expected to enhance the
company's Medicare coverage. Overall, we expect an upside to Humana
shares on the basis of higher membership, surplus cash flows
generation, favorable prior-period claims development, and higher
projected segment earnings.
Our six-month target price of $89.00 equates to 11.6x our earnings estimate for
2011. Combined with the $1.00 per
share annual dividend, this target price implies an expected total
return of 20.7% over that period. This is consistent with our
Outperform recommendation on the shares.
Bear of the Day:
We have downgraded our recommendation on Gentiva Health
Services (Nasdaq: GTIV) to Underperform, prompted by poor
operating performance coupled with weakening financial position.
The company's second-quarter earnings lagged the Zacks Consensus
Estimate, on the back of high interest payments as well as
increased expenses, resulting in a deteriorated cash position.
However, the strong growth in Hospice segment, driven by the
Odyssey acquisition, led to a huge surge in revenue, which was
offset by the rising costs. The company needs to engage in
effective cost control, while continuing its current acquisition
strategy.
Overall, the future outlook for Gentiva does not look very
promising. Our six-month target price of $6.25 equates to 3.0x our earnings estimate for
2011. This price target implies an expected total negative return
of 8.4% over that period.
Latest Posts on the Zacks Analyst Blog:
ConAgra Misses but Reaffirms
ConAgra Foods Inc. (NYSE: CAG) has reported first quarter
of fiscal 2012 results, with diluted EPS (from continuing
operations) of $0.20 compared with
$0.32 in the year-ago quarter.
This decline of 38% reflects negative impact of short-term
changes in the wheat market affecting the company's Commercial
Foods segment and the inflationary pressures in the Consumer Foods
segment. The results missed the Zacks Consensus Estimate of
$0.31 per share.
Guidance
ConAgra reaffirms expectation of fiscal 2012 full-year diluted
EPS to grow at a low- to mid-single-digit rate, based on high
inflation and increased marketing investments, over the comparable
EPS of $1.75 during fiscal 2011. The
company revised its full-year inflation expectations to 9-10% for
the Consumer Foods segment from original estimate of 7-8%.
ConAgra Foods Inc. is one of North
America's leading food makers operating in the Consumer
Foods and Commercial Foods segments. The company, over time, has
given tough competition to its peers such as HJ Heinz Co.
(NYSE: HNZ) and Kraft Foods Inc. (NYSE: KFT), based on its
cost-control measures on the backdrop of rising raw material prices
as well as its product-line expansion program in a
highly-competitive food industry.
We maintain a Neutral recommendation on the stock backed by a
Zacks #4 Rank, which translates into a short-term 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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