CHICAGO, June 27, 2011 /PRNewswire/ -- Zacks Equity
Research highlights: Telesp S.A. (NYSE: VIV) as the Bull of
the Day and Sears Holdings Corp. (Nasdaq: SHLD), as the Bear
of the Day. In addition, Zacks Equity Research provides analysis on
Research In Motion Ltd. (Nasdaq: RIMM), Apple Inc.
(Nasdaq: AAPL) and Google Inc. (Nasdaq: GOOG).
(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 our recommendation to Outperform from Neutral
on Telesp S.A. (NYSE: VIV) following its merger with the
mobile phone provider Vivo Participacoes. We believe the merger
will boost its existing operations and its competitive position.
The combined entity is now a full-service operator offering
competitive bundled (fixed-line and wireless) services.
Vivo reported a solid first quarter, with net income soaring
270% year over year. The company gained 1.7 million subscribers,
bringing its total customer base to 62.1 million. On the other
hand, Telesp's fixed-line operation is struggling with
disappointing first quarter net income, which was down 13% year
over year. The company lost 38,000 customers bringing the total
subscriber base to 15.06 million.
Thus, we believe the Vivo integration would bring back the
company's profitability through its strong mobile service business.
Hence, we are recommending an Outperform rating with a price target
of $34, based on 12.6x our 2011 EPADS
estimate.
Bear of the Day:
Sears Holdings Corp. (Nasdaq: SHLD) disappointed with its
overall first-quarter 2011 results. The company posted a quarterly
loss of $1.39 per share that plunged
drastically from the prior-year quarter earnings of $0.16 primarily due to sluggish top-line
performance. Management's cost cutting initiatives for enhancing
profits were of no use.
Moreover, intense competition and exposure to adverse foreign
currency translations may undermine the company's future operating
performance. Furthermore, rising debt and declining cash and
equivalents may adversely impact the company s future expansion and
operational activities.
Currently, we are maintaining a long-term Underperform
recommendation on the stock. Our target price of $62.00 is based on P/CF multiple of 6.3x.
Latest Posts on the Zacks Analyst Blog:
Research In Motion to Underperform
The nightmare of Research In Motion Ltd. (Nasdaq: RIMM)
continues and so far the company has failed to provide any specific
time frame when its free fall will come to an end. Ever since
Apple Inc.'s (Nasdaq: AAPL) iPhone hit the market,
Research In Motion started losing its leadership position. For the
last couple of years, the company failed to launch any device that
could capture the market from iPhone or developed Android-based
high-end smartphones.
After experiencing weak financial results for the first quarter
of fiscal 2012, the company reported a highly disappointing future
financial guidance. It seems management is doing research in slow
motion as the company failed to understand how the tastes and
preferences of the consumers are changing. Meanwhile, the market
becomes intensely competitive with the emergence of several
low-cost Asian phone developers. We do not find any immediate
catalyst and therefore downgrade our recommendation to
Underperform.
Research In Motion is facing severe problems from several
fronts. The company is continuously delaying new products
introduction, facing an ever increasing competitive landscape, a
stagnant product portfolio, and an unfavorable product mix.
Revenue, in the previous quarter, was way below the company's own
guidance. Research In Motion shipped just 13.2 million BlackBerry
smartphones in the first quarter of fiscal 2012. Management
estimated that the company will ship a mere 11 million – 12.5
million BlackBerry smartphones in the ensuing second quarter of
fiscal 2012.
What is most concerning is an even disappointing financial
outlook for the rest of fiscal 2012. The new EPS guidance for
fiscal 2012 declined 25% from the company's previous guidance.
Research In Motion has failed to cope up with the next-generation
market trend, which is rapidly changing in terms of technology,
price, and data plan provided by the wireless carriers.
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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