CHICAGO, Oct. 25, 2012 /PRNewswire/ -- Zacks Equity Research highlights Hibbett Sports, Inc. (Nasdaq: HIBB) as the Bull of the Day and Intel Corporation (Nasdaq: INTC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Zumiez Inc. (Nasdaq: ZUMZ), Hot Topic Inc. (Nasdaq: HOTT) and Pacific Sunwear of California Inc. (Nasdaq: PSUN).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Backed by strong sales growth coupled with operational efficiencies, Hibbett Sports, Inc.'s (Nasdaq: HIBB) earnings of $0.30 per share for second-quarter fiscal 2013 surged 42.9% from the prior-year quarter, beating the Zacks Consensus Estimate of $0.27. Buoyed by better-than-expected results, the company raised its expectations for fiscal 2013.
The company now forecasts earnings in the range of $2.57-$2.67 per share, up from $2.50-$2.65 forecasted earlier. Management also remains committed to expand its store network by 55 to 60 new stores in fiscal 2013. Moreover, Hibbett's sharp focus on mid-sized and smaller markets and strategic mix of branded as well as localized merchandise provide it with an edge over its competition.
The company has a healthy balance sheet with no debt. Currently, we are maintaining a long-term Outperform recommendation on the stock.
We have downgraded Intel Corporation (Nasdaq: INTC) shares from Neutral to Underperform following the company's lowered expectations for the next quarter. We think that weakness in mature markets, economic headwinds in some emerging markets and pressure from tablets and other competitors are taking a toll on the company.
We think current trends overshadow Intel's $0.04 positive surprise versus the Zacks Consensus in the second quarter that was driven by strength in server and software businesses and supported by a moderate PC business. However, we remain positive about Intel's dominance in the high-margin server segment and promise of success in the mobile segment, although competition from ARM-based devices continues to intensify.
We believe that Ultrabooks and Win-8 are wild cards this holiday season and could skew results either way. We are also lowering our target price to $20.00, which is 9.4X our earnings expectations for 2012.
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Zumiez Downgraded to Neutral
We have downgraded our long-term recommendation on Zumiez Inc. (Nasdaq: ZUMZ) to Neutral. Our view is based on the company's declining comparable store sales transaction in fiscal 2012 so far, except in May.
We observed that the company's rate of upside in comparable-store sales has been decelerating. It increased in the mid double-digit to low double-digit range between February and May (14.2% to 10.1%), but from June to September the comps portrayed an upside between high-single digit to low-single digit (8.2% to 3.7%). Therefore, considering this downward trend, we remain apprehensive about the company's future comparable store sales performances.
Further, the sporting goods retail industry is a consumer-driven industry, and hence is very sensitive to the health of economy as sports are mainly a leisure activity. Spending on sporting goods is heavily dependent on personal disposable income of consumers. The current macroeconomic challenges such as high household debt and unemployment levels may restrain consumers spending on sporting goods.
However, continuing with its store expansion and e-commerce strategies, Zumiez posted better-than-expected quarterly results for the second quarter of 2012.The quarterly earnings of 17 cents per share doubled year over year. Net sales grew 20.4% during the quarter. Management now anticipates revenue between $181 million and $185 million and earnings in the band of 42–45 cents per share for the third quarter.
The company is currently in the early phase of its store expansion program and plans to augment its network to 600–700 stores in the long run. Further, the recent acquisition of Blue Tomato facilitates Zumiez to tap the European market. We believe these initiatives provide the company with a solid platform to effectively capitalize on the emerging opportunities.
The above pros and cons justify our long-term view on the company. Currently, Zumiez competes with other teenage-focused retailers as well as sporting goods retailers Hot Topic Inc. (Nasdaq: HOTT) and Pacific Sunwear of California Inc. (Nasdaq: PSUN).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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