Zacks Bull and Bear of the Day Highlights: Altera, Sears Holdings, Research In Motion, Apple and Google
CHICAGO, June 17, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Altera Corp. (Nasdaq: ALTR) as the Bull of the Day and Sears Holdings Corp. (Nasdaq: SHLD), as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Research In Motion (Nasdaq: RIMM), Apple Inc. (Nasdaq: AAPL) and Google (Nasdaq: GOOG).
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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Altera Corp. (Nasdaq: ALTR) continues to post solid growth, and we believe this growth will be sustainable in the long run. As expected, Altera faced a minor inventory adjustment and a temporary slowdown in the wireless segment during the first quarter. However, results topped our expectations.
Earnings estimates for 2011 increased by $0.09 after the first quarter report. The industry-leading 40-nanometer product execution and the company's ongoing efforts to improve operating efficiency remain the keys to long-term revenue growth.
We believe the company gained market share in 2010 from rival Xilinx Corporation. We find the stock attractive at current levels and, therefore, upgrade our recommendation to Outperform from Neutral.
Sears Holdings Corp. (Nasdaq: SHLD) disappointed with its overall first-quarter 2011 results. The company posted a quarterly loss of $1.39 per share that plunged drastically from the prior-year quarter earnings of $0.16 primarily due to sluggish top-line performance. Management's cost cutting initiatives for enhancing profits were of no use.
Moreover, intense competition and exposure to adverse foreign currency translations may undermine the company's future operating performance. Furthermore, rising debt and declining cash and equivalents may adversely impact the company s future expansion and operational activities.
Currently, we are maintaining a long-term Underperform recommendation on the stock. Our target price of $62.00 is based on P/CF multiple of 6.3x.
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RIM Misses Revs, Guides Way Down
The continuing difficulties for Research In Motion (Nasdaq: RIMM) continued after the bell Thursday, when the BlackBerry smartphone maker reported earnings for its fiscal 1st quarter of 2012. While the company met the Zacks consensus EPS estimate of $1.32 per share, it missed revenue expectations of $5.4 billion by roughly half a billion dollars to $4.9 billion.
Far more damaging for RIM, however, is its drastically lowered earnings guidance from $7.50 per share to a range of $5.25-$6.00. The Zacks Consensus Estimate -- which had been falling considerably all quarter, including 14 lowered revisions in just the past 30 days -- had been $6.27 per share.
Research In Motion sold more Playbook tablets than expected, but was below the low range of its guidance on BlackBerry sales, selling 13.2 million handhelds in the quarter. Clearly, fears that Apple Inc.'s (Nasdaq: AAPL) iPhone and Google's (Nasdaq: GOOG) Android smartphones continue to take vast amounts of market share from BlackBerry are coming to pass.
Ahead of today's earnings report, analysts had been pessimistic about RIM's results. Five estimates had been revised downward and 13 revisions lowered for the full fiscal year have been made in the past month. Today's meet on the EPS side came after the Zacks Consensus Estimate had fallen 20% over the course of the entire fiscal Q1.
In addition, Research In Motion mentioned it would undertake job cuts in the current quarter (with benefits to accrue next quarter). The company was not specific about the number of jobs it intended to cut prior to the conference call.
The big question for investors of RIM is: Can the company overcome its product delays -- the touchscreen BlackBerry Bold, in particular -- in order to win back some of the vast market share it has lost to companies like Apple and Google. If it can, it will be a remarkable turnaround story.
But it does not seem as if investors are holding their breath. After trading in the after-market was suspended pending the releases of RIM's earnings numbers, the stock has shed over 14% in the wake of the disappointing numbers. The company is in the process of setting a new 52-week low.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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