RRGB Red Robin Gourmet Burgers Inc

For Immediate Release

Chicago, IL – February 24, 2012 – Zacks Equity Research highlights Red Robin Gourmet Burgers ( RRGB) as the Bull of the Day and Sunoco, Inc. ( SUN) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alcoa Inc. ( AA), Aluminum Corporation Of China Limited ( ACH) and BHP Billiton Ltd. ( BHP).

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:

Red Robin Gourmet Burgers ( RRGB) reported another solid quarter with fourth-quarter 2011 earnings surpassing the Zacks Consensus Estimate as it experienced upside in revenue and margin. The company is progressing quite successfully in turning around its business by Project RED, which focuses on revenue growth, expense control and capital deployment.

The pace of the company's ongoing cost saving initiatives is faster than expected. Moreover, the loyalty program is tremendously successful. Also, the company is experiencing same-store sales growth based on its marketing and promotional activities.

In addition, the company's focus on franchising, unit growth, store remodeling, investments to improve operational efficiency and enhancing shareholder value also augurs well for its earnings. Hence, we upgrade the stock from Neutral to Outperform.

Bear of the Day:

A weak business model, geographically undiversified asset base and operational hindrances compel us to downgrade Sunoco, Inc. ( SUN) to Underperform from Neutral. Our pessimistic outlook on the stock is fueled by the company's poorly performing refining and supply segment, which registered a high loss along with lower realized prices and throughputs in the fourth quarter of 2011.

Moreover, with the separation of the coke manufacturing business, Sunoco exhibits a weak business profile and remains susceptible to competitive risks. As such, we expect Sunoco to perform below the industry, which gives investors little reason to hold the stock.

We render a pessimistic outlook on the stock in the coming quarters, which is the main reason for our downgrade of the rating. Our $36 price objective reflects a multiple of 6.2X the trailing twelve-month cash flow.

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Alcoa, CPI Sign Deal

Aluminum giant Alcoa Inc. ( AA) and China Power Investment Corporation (CPI) entered into a deal to form a joint venture (JV) for producing high-end fabricated aluminum products for China. The terms of the agreement are yet to be disclosed.

The new company, named Alcoa CPI (China) Aluminum Investment Co. Ltd., will be based in Shanghai. Alcoa is expected to hold a major portion of the company’s share.

The agreement for the JV was signed by Alcoa’s Chairman and CEO and the President of CPI in Beijing. The joint venture was announced in September 2011 by the companies after they signed a Letter of Intent.

The joint venture will develop high-end engineered products that will be used in many industries including automotive, aerospace, packaging and consumer electronics. Both the companies believe that this deal will increase their competitiveness and will lead to profitable growth while facilitating them to serve their customers better.

In January 2012, Alcoa, the largest U.S. aluminum producer, reported loss in its fourth-quarter 2011 results. The company posted a loss from continuing operations of $193 million, or 18 cents per share compared with a profit of $172 million, or 15 cents per share in the comparable quarter last year.

Excluding restructuring charge of $159 million and other items, Alcoa's loss came in at 3 cents per share, below the Zacks Consensus estimate profit of 1 cent. It is the company's first loss in the last nine quarters.

For full-year 2011, Alcoa reported income from continuing operations of $614 million, or $0.55 per share, which is more than double of 2010 results. The disappointing results were driven by higher costs of energy and transportation.

Though revenues for the quarter rose 6% year over year to $6 billion, business was down in most areas including construction, industrial products, packaging and commercial transportation. Besides, sales to automobile manufacturers fell 2%. For 2011, revenue rose to $25 billion from $21 billion in fiscal year 2010.

For 2012, Alcoa expects global aluminum demand to grow 7% due to the worldwide deficit in primary aluminum supply. Alcoa’s growth projection is ahead of the 6.5% rate, which is required to meet its forecast of doubling the global aluminum demand between 2010 and 2020.

In addition, Alcoa believes that growing demand for aluminum, combined with market-related production cutbacks, will result in a global aluminum industry deficit of 600,000 metric tons in 2012

We believe that Alcoa’s cost reduction efforts are, to some extent, offsetting the negative impact of higher energy and raw material costs on profitability. The company is divesting underperforming assets through its restructuring program.

The annual global consumption of aluminum products, both upstream and downstream, is expected to double by 2020. This consumption boom will be driven primarily by growth in China, India, Russia and Brazil, whose demographics are accelerating development.

Alcoa retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating and we have recommended the shares of the company as Neutral for the long-term (more than 6 months). Alcoa faces stiff competition from Aluminum Corporation Of China Limited ( ACH) and BHP Billiton Ltd. ( BHP).

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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ALCOA INC (AA): Free Stock Analysis Report
 
ALUMINUM CP-ADR (ACH): Free Stock Analysis Report
 
BHP BILLITN LTD (BHP): Free Stock Analysis Report
 
RED ROBIN GOURM (RRGB): Free Stock Analysis Report
 
SUNOCO INC (SUN): Free Stock Analysis Report
 
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