CHICAGO, July 28, 2011 /PRNewswire/ -- Zacks Equity
Research highlights Dillard's, Inc. (NYSE: DDS) as the Bull
of the Day and Cooper Tire & Rubber Co. (NYSE: CTB) as
the Bear of the Day. In addition, Zacks Equity Research provides
analysis Boeing (NYSE: BA), Dow Chemical (NYSE: DOW)
and ConocoPhillips (NYSE: COP).
(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:
Dillard's, Inc. (NYSE: DDS) first-quarter 2011 earnings
of $1.27 per share beat the Zacks
Consensus Estimate of $0.91 and
surged approximately 84% from the prior-year quarter on the heels
of strong comparable store sales growth coupled with efficient
inventory management. Management is also undertaking restructuring
initiatives and inventory reduction efforts to save costs and boost
profitability.
Moreover, in order to enhance its liquidity position and manage
risks more efficiently, Dillard's has recently formed a
wholly-owned real estate investment trust company and a captive
insurance company. Further, Dillard's healthy cash flow and balance
sheet allow it to make shareholder-friendly moves, such as
acquisitions, dividends and share repurchases.
Currently, we are maintaining our long-term Outperform
recommendation on the stock. Our target price of $64.00, 16.8X 2011 EPS, reflects this view.
Bear of the Day:
Cooper Tire & Rubber Co. (NYSE: CTB) faces
intensifying competition and soaring material costs, which can be
regarded as major threats for the company. Moreover, its
deteriorated cash balance is likely to limit the company's business
expansion plans.
Although profits exceeded the Zacks Consensus Estimate by
$0.04 per share in the first quarter,
the above factors along with a sluggish tire industry exert
considerable pressure on the company's earnings. Considering all
these elements, we have downgraded our recommendation on shares of
Cooper Tire from Neutral to Underperform and set a target price of
$17.00.
Our long-term Underperform recommendation on the stock indicates
that it will perform below the broader market. Our $17 target price, 7.3x our 2011 EPS estimate,
reflects this view.
Latest Posts on the Zacks Analyst Blog:
Looking Past the Washington Circus
Strong corporate earnings reports will be trying to gain
traction for another day in the face of the still-unresolved
Washington debate on the debt
ceiling/budget issue. The soft Durable Goods numbers for June will
not help matters either.
With the August 2 debt-ceiling
deadline just days away now and the two sides still poles apart in
their respective positions, the odds of a comprehensive budget deal
are very low. The most likely outcome at this stage is an 11th hour
kick-the-can-down-the-road solution that will provide for a
temporary debt-ceiling increase, while leaving the thornier deficit
reduction issue for a later date.
The rating agencies have painted themselves in a corner by
threatening a rating downgrade if the debt ceiling increase was not
accompanied by a credible enough deficit-reduction plan. They seem
to be using this event as an opportunity to buttress their image
following their negligent behavior in the sub-prime mortgage
crisis.
But the credit markets appear to have called their bluff. With
the 10-year Treasury bond in the 3% vicinity, there are no signs of
panic in the bond market. As such, the loss of the 'AAA' rating may
not exactly be an end-of-the-world event, after all. All we need
right now is for the stock market to see the issue the same way as
the bond market is doing.
Beyond the Washington Circus, we had a number of solid earnings
reports this morning. Boeing (NYSE: BA) posted a solid EPS
beat on inline revenue, but the top of its full-year earnings
guidance came short of the current Zacks Consensus. We had a solid
EPS and revenue beat from Dow Chemical (NYSE: DOW), with the
chemicals giant continuing to see growth momentum in its various
markets. Oil giant ConocoPhillips (NYSE: COP), which is in
the process of splitting itself into two companies, also came out
with better-than-expected results.
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.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides
analysis from Zacks Equity Research about the latest news and
events impacting stocks and the financial markets.
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