Zacks Bull and Bear of the Day Highlights: Weyerhaeuser, NYSE Euronext, Brinker International, Darden Restaurants and Ruby Tuesday
CHICAGO, Nov. 21, 2012 /PRNewswire/ -- Zacks Equity Research highlights Weyerhaeuser Co. (NYSE: WY) as the Bull of the Day and NYSE Euronext, Inc.'s (NYSE: NYX) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Brinker International, Inc. (NYSE: EAT), Darden Restaurants Inc. (NYSE: DRI) and Ruby Tuesday Inc. (NYSE: RT).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We have upgraded our recommendation on Weyerhaeuser Co. (NYSE: WY) from Neutral to Outperform based on the high growth the company has achieved, reducing total costs and increasing prices. Also, the company is making an earnest effort to reduce its debt and maintain a healthy debt to equity ratio.
The company's earnings increased a whopping 83% year over year in the third quarter to $0.22 per share. The sales also soared 12.9% year over year to $1,772 million. Operating profits escalated 102% and long-term debt decreased 7.9% year over year. Backlog for Real Estate remains solid.
Our long-term Outperform recommendation on the stock indicates that it will beat the broader U.S. market over the next six to twelve months. Our target price is $32.00 based on 2012 P/E of 68.1x.
NYSE Euronext, Inc.'s (NYSE: NYX) third quarter earnings breezed past the Zacks Consensus Estimate but plunged year over year based on weak volumes and pricing across trading venues, which led to a reduced top line and lower operating margin. A low cash position and high debt raised the concerns of rating agencies.
NYSE has a bigger debt burden compared to its prime peers, which poses a competitive threat to the fundamental growth of the company. Higher debt and lower working capital in the first half of 2012 also impelled ratings agency S&P to downgrade its outlook to negative from stable, in August 2012.
Our six-month target price of $22.00 equates to about 11.7x our earnings estimate for 2012. With an annual dividend of $1.20, this price target implies a negative total return of 6.9% over that period. This is consistent with our long-term Underperform recommendation on the shares.
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CEO Transition for Brinker
Doug Brooks, the Chief Executive Officer (CEO) and President of Brinker International, Inc. (NYSE: EAT) recently announced his intention to step down from the post effective December 31, 2012. Concurrently, the company also announced Wyman Roberts as his successor, who will take over the reins effectively from January 1, 2013.
Doug Brooks joined Brinker 35 years ago as a manager. His tenure oversaw the increase from a modest three restaurants in one state to 1,585 restaurants globally, generating around $2.8 billion of revenue annually. To ensure a successful transition of leadership to Roberts, Brooks will continue to serve as chairman of the board of the company through December 2013.
Wyman Roberts has been associated with Brinker since August 2005. Currently, he is the President of Brinker's brand Chili's Grill & Bar. However, he will retain this position along with the new responsibilities. He has previously served Brinker as Chief Marketing Officer and President of Maggiano's Little Italy brand.
Prior to joining Brinker, Roberts served NBC's Universal Parks & Resorts as Executive VP and CMO and contributed to growth of the company's market share and revenues. Apart from this, he has held several senior level positions over 17 years at Brinker's peer company – Darden Restaurants Inc. (NYSE: DRI).
With his vast know-how and expertise over 20 years in the restaurant industry, Roberts can easily be tagged as a veteran in this sector. With proven strategy development, operation, finance and brand building background, we expect him to provide meaningful support to Brinker. Roberts' contribution to growth of Chili's Grill & Bar has been noteworthy. Total sales at Chili's Grill & Bar restaurant surged 2.7% year over year in the most recent quarter and comparable restaurant sales at the brand climbed up 2.8% for the sixth consecutive quarter.
As a point of reference, several restaurant peers of Brinker have recently seen significant management changes. The founder and CEO of Ruby Tuesday Inc. (NYSE: RT), Sandy Beall, announced his intention to bow out from management and the Board.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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