Zacks Bull and Bear of the Day Highlights: Cooper Tire & Rubber, Best Buy, Macy's, Dillard's and Saks
CHICAGO, Nov. 26, 2012 /PRNewswire/ -- Zacks Equity Research highlights Cooper Tire & Rubber (NYSE: CTB) as the Bull of the Day and Best Buy, Inc. (NYSE: BBY) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Macy's Inc. (NYSE: M), Dillard's Inc. (NYSE: DDS) and Saks Incorporated (NYSE: SKS).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Cooper Tire & Rubber (NYSE: CTB) is making a concerted effort to reduce costs and increase efficiency in each of its plants in order to mitigate pressure on margins. Moreover, the company's North American operation is also performing well.
In the most recent quarter, Cooper Tire posted a significant increase in profits to $74.1 million or $1.17 per share from $17.3 million or $0.27 in the year-ago quarter. With this, it has beaten the Zacks Consensus Estimate by a commendable margin of $0.30.
As such, we have upgraded the recommendation on the shares of the company to Outperform from Neutral and set a target price of $29.00.
Best Buy, Inc. (NYSE: BBY) posted dismal third-quarter 2013 results. The quarterly earnings of $0.03 per share fell 94% from the year-ago quarter, and also missed the Zacks Consensus Estimate of $0.12. Total revenue also declined 3.5% to $10,753 million, while comparable-store sales fell 4.3%, reflecting a decline of 4% at Domestic segment and 5.2% at the International division.
A tough economic environment in China and weak sales in Canada were the headwinds. Best Buy also suspended its future share buyback program and abstains from providing earnings projection for fiscal 2013 due to an uncertain environment related to product launches and industry-wide sales.
We remain concerned about secular headwinds and falling comps in televisions, gaming, notebooks and digital imaging. Moreover, Best Buy's cash position has shattered, plunging 85.1% year-over-year to $309 million at the end of the quarter. Consequently, we maintain our bearish stance on the stock.
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Macy's Maintained at Neutral
We maintain our Neutral recommendation on Macy's Inc. (NYSE: M), with a target price of $43.00, as frugal shoppers, soft economic recovery and the impact of Hurricane Sandy still remain the causes for concern.
However, it is encouraging to note the company's sustained focus on price optimization, inventory management, merchandise planning and private label offering, which positions it well to drive traffic, meet customer-oriented demand and improve in-store shopping experience.
Macy's recently came up with its third-quarter 2012 earnings, wherein the quarterly earnings of 36 cents a share came ahead of the Zacks Consensus Estimate of 29 cents, and rose 12.5% year over year on the back of My Macy's localization initiatives, omnichannel integration, robust online sales and effective cost management.
Total sales grew 3.8% to $6,075 million in the quarter. Management now guides fiscal 2012 earnings in the range of $3.35 to $3.40 per share. This is the 11th straight quarter that the company has witnessed top and bottom line growth.
Following strong results, management now expects fiscal 2012 earnings between $3.35 and $3.40, up from a range of $3.30 to $3.35 per share forecasted earlier. For the fourth quarter, earnings are projected between $1.94 and $1.99 per share.
Moreover, Macy's raised its guidance of comparable-store sales for the second half of fiscal 2012. Management now anticipates growth of about 4% in comparable-store sales compared with its earlier guidance of 3.7%. For the fourth quarter and fiscal 2012, comparable-store sales are projected to increase by 4.2% and 3.9%, respectively. Macy's projects sales in the fourth quarter to be up 7.2%. Management expects comparable-store sales growth in November to be soft due to the impact of Hurricane Sandy.
Buoyed by better-than-expected results, the Zacks Consensus Estimates for fiscal 2012 and 2013 have been on the rise. The Zacks Consensus Estimate for 2012 increased 3 cents to $3.41 per share in the last 30 days as 11 out of 13 estimates were raised, while one was lowered.
Moreover, for 2013, the Zacks Consensus Estimate increased 3 cents to $3.88 per share, as 9 out of 14 estimates were revised upward, while two moved in the opposite direction.
Currently, Macy's, which competes with Dillard's Inc. (NYSE: DDS) and Saks Incorporated (NYSE: SKS), holds a Zacks #2 Rank that translates into a short-term Buy rating as we remain optimistic about the company's customer-centric localization initiative called 'My Macy's' and the company's upbeat outlook.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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