The Zacks Analyst Blog Highlights: Gap, American Eagle Outfitters, Nokia, Canon and Apple

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Mar 02, 2012, 09:30 ET

CHICAGO, March 2, 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 Gap Inc. (NYSE: GPS), American Eagle Outfitters Inc. (NYSE: AEO), Nokia (NYSE: NOK), Canon, Inc. (NYSE: CAJ) and Apple Inc (Nasdaq: AAPL).

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Here are highlights from Thursday's Analyst Blog:

Gap Expands in Latin America

Encouraged by the response of its first Latin American store and in tune with its strategy of expanding international footprint, Gap Inc. (NYSE: GPS) stepped into Panama by opening two stores -- one Gap and one Banana Republic. The stores have been launched under the franchisee model in agreement with Superior Retail Inc.

Located in the Albrook Mall in Panama City, the stores will offer the U.S collection of Gap, GapKids and babyGap and Banana Republic's affordable luxury attire and accessories for both the genders. As per management, the stores will have product assortments customized in accordance with the taste of Panama customers and the regions climate.

Gap had launched its first Latin American store in Chile, South America last year. The opening of the new stores in Panama marks the beginning of numerous stores that the company plans to open in Latin America over the next two years.

Apart from Chile and Panama, the company plans to extend the boundaries of its brands to three new Latin American countries, namely Colombia, Uruguay, and Peru. Backed by its success in Chile, the company remains confident of achieving a positive response in the newly planned locations as well as other counties in the region.

Gap presently has agreements in place with Superior Retail Inc. to open three more franchisee stores -- two Gap and one Banana Republic, in Panama through 2012. In 2012, the company is also lined to open two additional Gap stores and its first Banana Republic store in Chile, extending its existing agreement with Komax.

Later in 2012, the company has plans to inaugurate its first stores in Colombia in Bogota and Medellin, again under the supervision of Superior. The company also has plans to set foot in Uruguay in 2012, opening a new Gap store in agreement with a subsidiary of Neutral.

Additionally, Gap announced plans to enter Peru in 2013 with a Gap store to be launched in agreement with a subsidiary of Komax.

Gap is one of the leading players in the highly fragmented specialty retail sector offering a diverse range of clothing, accessories and personal care products for men, women, children and babies. Its flagship brands include Gap, Banana Republic, Old Navy, Piperlime and Athleta. The company's globally recognized brands complement one another, enabling it to leverage its position in the sector.

The primary competitors of the company include American Eagle Outfitters Inc. (NYSE: AEO).

Currently, Gap's shares maintain a Zacks #3 Rank, which translates into a short-term Hold rating. Our long-term recommendation on the stock remains Neutral.

Nokia Set to Launch Cheaper Lumia

Nokia (NYSE: NOK) recently launched their fourth Lumia series of handsets called Lumia 610 affordably priced at $254. The new series of handsets is mainly targeted toward the youth of the society. The new phone is expected to hit the stores in the second quarter of fiscal 2012.

The new low-priced Nokia Lumia 610 provides easy access to popular Xbox Live games, supports Nokia Maps, Nokia Drive, Nokia Transport and Nokia Music. One can also gain access to more than 55,000 applications available in the Nokia OVI store through the new device.

Moreover, the new Lumia handsets will benefit the young population not only to access different social network sites but also to maintain a single address book rather than maintaining different contact information in email, Facebook, Twitter and other social network sites.

Earlier, in November last year, Nokia launched their first Windows-based smartphones called Nokia Lumia 800 and Nokia Lumia 710. At the end of fiscal 2011, the company sold more than 1 million handsets. Moreover, the company plans to ship the latest Lumia phones in the lucrative markets of China and Latin America from the second quarter of fiscal 2012.

Nokia plans to launch a huge array of products in the end of second quarter of 2012. During that period, the company is planning to ship their firstLTE-based Window smartphone called Nokia Lumia 900. The company also plans to launch their next-generation tablets based on upcoming Windows 8 operating system. Such devices coupled with other product launches will certainly help the company to gain market traction going forward.

Recently, the company also launched HD camera centric smartphone called Nokia 808 PureView that features 41 megapixel camera. Such innovative product launch will give stiiff competition to camera manufacturers like Canon, Inc. (NYSE: CAJ) and Nikon Corp.

We believe that continuous loss of market share coupled with stiff competition from Android-based smartphones and Apple Inc's (Nasdaq: AAPL) iPhones are headwinds for the company going forward.

However, increased shipments of Nokia's dual-sim handsets in the emerging nations coupled with aggressive cost reduction initiatives implemented by the company will act as growth catalysts in the forthcoming quarters. We, thus, maintain our long-term Neutral recommendation for Nokia.

Currently, Nokia has a Zacks #3 Rank, implying a short-term Hold rating on the stock.

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