Zacks Bull and Bear of the Day Highlights: Sunoco Logistics Partners, Stanley Black & Decker's, Chevron, Royal Dutch Shell and Exxon Mobil
CHICAGO, Oct. 31, 2012 /PRNewswire/ -- Zacks Equity Research highlights Sunoco Logistics Partners (NYSE: SXL) as the Bull of the Day and Stanley Black & Decker's (NYSE: SWK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Chevron Corporation (NYSE: CVX), Royal Dutch Shell plc (NYSE: RDS.A) and Exxon Mobil Corporation (NYSE: XOM).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Buoyed by a continued robust operating performance and favorable growth prospects, we are maintaining our Outperform recommendation on Sunoco Logistics Partners (NYSE: SXL). Recent results have been driven by strength in its crude pipeline system and terminals facilities.
Importantly, the partnership has grown its cash distribution for 29 consecutive quarters. With its stable fee-based revenue, geographically-diverse assets and strong business fundamentals, Sunoco Logistics offers investors an opportunity to capture income growth through steadily rising cash distributions and capital appreciation.
As such, we rate units of Sunoco Logistics as an attractive investment and maintain its Outperform recommendation. Our $59 price objective reflects a 2013 P/E multiple of 18.0x.
Stanley Black & Decker's (NYSE: SWK) third quarter 2012 results were mixed with earnings per share of $1.40, rising above the year-ago earnings by 5.3% but falling short of the Zacks Consensus Estimate of $1.45. Europe remained a drag on results and largely was the reason behind management's lowered guidance. Currency also remains a headwind.
All these support our Underperform recommendation on the stock. Lowered 2012 guidance on the back of negative currency translation impacts, drag from European exposure and active competition in all businesses limit the company's growth prospects in the near term.
Thus, anticipating a lack of share driving catalysts, we currently maintain an Underperform recommendation on the stock. The stock currently has a target price of $61.00, at a 2012 P/E of 11.6x.
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Another Gas Discovery by Chevron
Chevron Australia Pty Ltd – an affiliate of Chevron Corporation (NYSE: CVX) – announced the discovery of natural gas in Satyr-4 exploration well in the Greater Gorgon Area, offshore Western Australia.
Located in the WA-374-P1 permit block in the Carnarvon Basin, the well is estimated to hold approximately 220 feet of net gas pay. The well, about 75 miles to the northwest of Barrow Island, was drilled 3,570 feet deep into water and to a total depth of 15,023 feet.
The Australian unit of Chevron acts as the chief operator of the block with 50% interest, while the remaining stake is shared equally by Royal Dutch Shell plc (NYSE: RDS.A) and Exxon Mobil Corporation (NYSE: XOM).
We believe that this exploration success will boost Chevron's growth prospects in Australia by adding to its already significant gas interests in the country.
Earlier in September, the company announced the discovery of natural gas in Satyr-2 exploration well in the Greater Gorgon Area, which marked Chevron's fifteenth find in the country since mid-2009.
In particular, the drilling success of the Satyr-4 exploration well is expected to support an expansion of the Chevron-operated multi-billion Gorgon liquefied natural gas (LNG) project.
The Gorgon gas fields, off the coast of Western Australia, are estimated to contain 40 trillion cubic feet of gas deposits with an expected economic life of at least 40 years from the time of start-up. According to Chevron, the venture will have an annual capacity to produce 15 million tons of LNG, with the first shipment expected in 2014.
We believe that successful drilling activities along with these prominent projects will establish Chevron as a leader among natural gas and LNG suppliers in the Asia-Pacific belt.
Chevron currently holds a Zacks #3 Rank (short-term Hold rating). We also maintain a long-term Neutral recommendation on the stock.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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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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