CHICAGO, July 18, 2011 /PRNewswire/ -- Zacks Equity
Research highlights Huntington Bancshares Inc. (Nasdaq:
HBAN) as the Bull of the Day and Genworth Financial (NYSE:
GNW) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis Public Service Enterprise Group Inc.
(NYSE: PEG), American Electric Power Company Inc.
(NYSE: AEP) and Ameren Corporation (NYSE: AEE).
(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 have upgraded our recommendation on Huntington Bancshares
Inc. (Nasdaq: HBAN) to Outperform following a detailed analysis
of the company fundamentals in light of the current economic
environment. The company is exhibiting growth in its loan
portfolio, which surpasses its peers.
The company reported better-than-expected first quarter 2011
results on the back of credit quality improvement and a modest
growth in loans and deposits. Strategic initiatives are right on
track, and the company is poised to benefit from an economic
rebound. By making active efforts to reduce its problem assets, the
company has lowered the level of its criticized commercial
loans.
Though issues related to a sluggish economic recovery along its
footprints and regulatory concerns remain, its solid capital
position and tactical efforts are expected to reduce those impacts.
Our six-month target price of $7.50
equates to 12.5x our earnings estimate for 2011.
Bear of the Day:
We are downgrading our recommendation on Genworth
Financial (NYSE: GNW) to Underperform as we expect the mortgage
insurance business to remain pressured. The first quarter also
suffered a greater year-over-year loss at the U.S. Mortgage
Insurance segment. First-quarter operating income lagged the Zacks
Consensus Estimate by a penny.
We expect that the elevated unemployment rate will continue
pressuring the mortgage insurance business. Additionally,
improvements in its other business lines are expected to be slow,
given the economy's sluggish recovery.
Genworth s investment portfolio remains another area of concern.
The company experienced significant losses and impairments in its
investment portfolio in the last several quarters. Our six-month
target price of $8.75 equates to
8.75x our earnings estimate for 2011.
Latest Posts on the Zacks Analyst Blog:
NJ Infrastructure Draws PSE&G's Focus
Public Service Enterprise Group Inc. (NYSE: PEG) also
known as PSE&G received approval from the New Jersey Board of Public Utilities ("BPU")
to invest in both expanding and upgrading its electric and gas
infrastructure, and programs to help it become more energy
efficient. PSE&G will spend about $273
million on electric and gas projects in New Jersey. The utility will also invest an
additional $95 million in its ongoing
energy efficiency programs.
Of the $273 million earmarked for
ongoing electric and gas projects, PSE&G will spend about
$195 million in accelerated capital
improvements to its electric distribution network. Among the
projects are upgrades to voltage regulators, insulators, and
breakers at substations; the replacement of underground cable
facilities including transformers, network protectors and relays;
upgrades to substation fire protection systems, and the replacement
of overhead cable and other equipment.
PSE&G will spend the other $78
million of the above $273
million on eight projects to enhance the reliability of the
utility's gas distribution system. Among the projects are the
replacement of 47 miles of aging cast iron and bare steel gas mains
and 4,200 bare steel gas services. Other projects include the
replacement of aging or obsolete gas pressure regulators, meter and
regulating equipment, and electronic measurement systems.
Lastly, PSE&G will spend $95
million to bring energy efficiency measures to cash-strapped
hospitals, municipalities, non-profits and multi-family housing
units, including affordable housing and senior projects. The
investment is an extension of a $166
million program approved in 2009 to provide energy audits
and the direct installation of energy efficiency measures to
customers who might not otherwise have been able to afford
them.
PSE&G, based in Newark, New
Jersey, is a diversified utility holding company. Its
operations are mostly located in the Northeastern and Mid-Atlantic
parts of the U.S.
Going forward, Public Service Enterprise's robust portfolio of
regulated and non-regulated utility assets offers steady earnings
and significant long-term growth prospects. The company remains
focused on operational excellence, financial strength and
disciplined investment. Also, the company's earnings growth will be
driven by a low-cost nuclear fleet, assumed rate relief and
addition to generating capacities.
However, the increasing cost of coal, higher pension and
financial costs, and power-price volatility are areas of concern.
In the near term, we see the shares of the company performing in
line with the broader market and thus reiterate a short-term Zacks
#3 Rank (Hold rating) on the stock, along with a longer-term
Neutral recommendation. This is in line with its peers like
American Electric Power Company Inc. (NYSE: AEP) and
Ameren Corporation (NYSE: AEE).
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
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events impacting stocks and the financial markets.
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