CHICAGO, March 21, 2012 /PRNewswire/ -- Zacks.com 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 Eni SpA (NYSE: E), Statoil ASA (NYSE: STO), Hewlett-Packard Company (NYSE: HPQ), EMC Corp. (NYSE: EMC) and Amazon.com Inc. (Nasdaq: AMZN).
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Here are highlights from Tuesday's Analyst Blog:
Eni SpA to Sell Assets, Boost Output
Eni SpA (NYSE: E) remains busy in its asset divestiture program, mainly to support its upstream development activities. The company, in its 2012–2015 Strategic Plan, revealed that it aims to deliver production growth of more than 3% annually over the next four years through the asset sale program.
The divestiture program includes sale of its stakes in Portugal's Galp Energia and Italian gas transport group Snam. Galp Energia has a market value of €10.6 billion and Eni owns 33.34% in Galp, worth around €3.5 billion. The company expects to complete the deals before 2014 and strengthen its balance sheet in order to concentrate on big potential projects. The group also plans to offload other non-core assets including those in the North Sea.
We believe that Eni's outlook for the upcoming period is favorable given its 2012–2015 strategic plans to enhance production and implement steps to control costs and recover profitability. Eni has also boosted its long-term outlook plan to 3% per annum from the previous 2% until 2021 and plans to add 700,000 barrels a day from the new project start-ups within the plan period.
Eni expects its production over the plan period to be aided by significant organic contributions from regions like Russia (Yamal), the Barents Sea, Kazakhstan, Venezuela and the sub-Saharan region. It intends to spend a sum total of €59.6 billion (US$78 billion) until 2015, which is 12% higher than the previous plan. Of the total budget, more than 75% is apportioned for upstream activities.
As for the company's production, total liquids and gas output for the fourth quarter of 2011 dropped more than 14% year over year. The downside was mainly due to the interruption of operations at several Libyan fields and the termination of the GreenStream pipeline activity because of political turmoil.
With the expected strengthening of the global economic scenario along with production ramp-up in its existing fields, we believe that Eni offers ample long-term visibility into profitability over the coming quarters. Notably, new field start-ups at certain large projects are also expected to have a positive impact.
However, we are concerned about Eni's refining business as its underlying fundamentals are still weak following the political disturbances in the Middle East that could suppress production. The company aims to enhance the flexibility of its plants, along with optimization of the production cycles, while reducing costs and utilizing its proprietary technology.
Immense competition from peers such as Statoil ASA (NYSE: STO) is also a threat to the company. Hence, we maintain our long-term neutral recommendation on Eni.
H-P, CenterBeam Cut Deal
Hewlett-Packard Company (NYSE: HPQ) recently announced that cloud services provider CenterBeam has deployed its Converged Infrastructure suite, replacing the exiting storage systems provided by EMC Corp. (NYSE: EMC). Financial terms of the deal were not disclosed.
California-based CenterBeam hosts various cloud solution such as customer relationship management and collaboration, and delivers virtual data center services and data storage management services mostly to the mid-sized firms. CenterBeam selected H-P to set up a high performance cloud infrastructure along its IT eco system, with the aim of ensuring storage throughput while enabling storage of infrequently used data in its data centre.
HP's Converged Infrastructure solutions bring together servers, storage and networking products to manage data centers from a common platform. The Converged platform has been designed to make data center handling simpler, more flexible, efficient and cost effective. The highly-virtualized storage solutions of 3PAR (acquired in August 2010) with advanced data management features (dynamic tiering, thin provisioning, etc.) for cloud-computing environments have further strengthened HP's Converged portfolio.
Per the contract terms, H-P offered its ProLiant BL460c G7 server blades, and 3Par storage solutions. Reportedly, 3Par storage solutions have helped CenterBeam to reduce costs by 50.0%, while lowering supervision time by around 60.0%. Overall, H-P's Converged Infrastructure suite has supported CenterBeam in its data centre optimization through the deployment of a cost effective, fast and secure data management process.
In today's technology-driven world, the enterprise storage space is one of the most enviable growth areas and we believe that H-P is doing very well in this category. H-P is also keen on making its cloud computing services public within two months. H-P's cloud services will be somewhat similar to the cloud platform offered by renowned online retailer Amazon.com Inc.'s (Nasdaq: AMZN) Web Services.
H-P's cloud infrastructure is popular among its customers. But its software- as-a-service offering may take some time to ramp, as it will be first used by the existing customers.
H-P's venture is encouraging but it will take some time to take off. This apart, lackluster PC demand and Meg Whitman's yet-to-be proven strategies keep us on the sidelines.
Currently, H-P has a Zacks #3, implying a short-term Hold recommendation.
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