The Zacks Analyst Blog Highlights: American International Group, Microsoft, Google, Apple and Infoblox

Oct 18, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Oct. 18, 2013 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the American International Group Inc. (NYSE: AIG-Free Report), Microsoft Corporation (Nasdaq: MSFT-Free Report), Google (Nasdaq: GOOG-Free Report), Apple (Nasdaq: AAPL-Free Report) and Infoblox Inc (NYSE: BLOX-Free Report).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday's Analyst Blog:

AIG Upped to Outperform

We have upgraded life and property insurer – American International Group Inc. (NYSE: AIG-Free Report) to Outperform based on its improving operating and financial leverage, gaining scope for long-term growth.

Why the Upgrade?

AIG has witnessed modest upsides in its earnings estimates following its second-quarter 2013 results released on Aug 1. Both earnings per share (EPS) and total revenues of $1.12 and $17.32 billion beat the Zacks Consensus Estimate by 31.8% and 38.4%, respectively. Moreover, both the top- and bottom line exceeded the year-ago results by 6.7% and 16.7%, respectively.

Improved operating earnings across both life and property-casualty segments were led by lower claims and expenses as well as higher assets under management (AUM). These factors also drove the book value per share, combined ratio, return on equity (ROE) and operating cash flow.

Following the release of the second-quarter results, the Zacks Consensus Estimate for 2013 rose 5.2% to $4.27 per share in the last 60 days. Moreover, the Most Accurate Estimate for AIG's 2013 earnings stands at $4.34 a share, resulting in a positive Earnings ESP of 1.6%.

Further, the earnings estimate for 2014 is pegged at $4.22 per share, up 1.4% for the similar period. With the Zacks Consensus Estimate for both 2013 and 2014 rising steadily, the company now has a Zacks Rank #2 (Buy).

We hold a strong positive bias on the company, with reasons that justify the bias. AIG has come a long way by fully repaying the government loan and streamlining its core insurance operations. The efforts are also visible in the improved financials in the past few quarters. Consistently improving operating leverage and debt reduction has also supported AIG to approve another share buyback program and initiate dividend payouts. These factors score well with the ratings agencies and investors as well.

Microsoft Unveils Windows 8.1

Microsoft Corporation (Nasdaq: MSFT-Free Report) recently unveiled an upgrade to its Windows operating system in the form of Windows 8.1. The new and improved version is believed to address all the complaints that users had with its earlier version, Windows 8, which aimed at bridging the gap between tablets and PCs.

This update will be available free of cost to all the current owners of Windows 8. The recent update incorporates some new finger- and gesture-friendly shortcuts for touch-based apps, while restoring some respect for the desktop mode that a billion PC users have become habituated to.

Windows 8.1 allows four apps to run simultaneously, a unique multi-tasking feature users have never been exposed to before. The new update will also enable better browsing as users can now open any number of tabs they want to. Users do need to login to take Skype calls or click photos given the lock screen access feature.

The update has been released at a time when there is a slump in the demand for traditional desktops and laptops owing to the increasing popularity of smartphones and tablets. Windows 8.1 now has a home screen that looks good in portrait mode on screens measuring 7 inches to 8 inches diagonally and hence is deemed to be apt for usage in tablets.

Microsoft has decided to retire Windows XP in 2014, a fact that sparked rumours that enterprises using XP would now shift to the newly-launched Windows 8.1. However, as per Gartner, enterprises have been showing a preference for Windows 7 rather than 8.1. This may be due to the fact that businesses normally transition to older operating systems rather than newly-launched ones which are yet to witness broad-based adoption.

As per reports of market research firm IDC, in the second-quarter of 2013, Google's (Nasdaq: GOOG-Free Report) Android OS was the leading smartphone operating system with a 79% share of the total market, followed by Apple's (Nasdaq: AAPL-Free Report) iOS with a 13% share and Windows well behind with 3.7%.

Microsoft Corporation develops, manufactures, licenses, sells and supports software products. The company operates in five segments: Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division.

Currently, Microsoft has a Zacks Rank #3 (Hold). However, Infoblox Inc (NYSE: BLOX-Free Report) with a Zacks Rank #1 (Strong Buy) is an attractive investment option this season.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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