Zacks Bull and Bear of the Day Highlights: Applied Materials, Genworth Financial, Apple, Verizon and AT&T

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Jan 19, 2011, 09:30 ET

CHICAGO, Jan. 19, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Applied Materials (Nasdaq: AMAT) as the Bull of the Day and Genworth Financial (NYSE: GNW) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple Inc. (Nasdaq: AAPL), Verizon (NYSE: VZ) and AT&T (NYSE: T).

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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:

Bull of the Day:

Applied Materials (Nasdaq: AMAT) is one of the world's largest suppliers of fabrication equipment to semiconductor, LCD and solar PV cell manufacturers. Applied's product breadth, strong position in China, improving trends across served markets, new design wins, market share gains, management execution and solid financials are the reasons for our positive opinion on the shares.

Management's decision to discontinue the thin film business also makes sense, in our opinion. Although it is apparent that the equipment cycle has peaked, we expect the company to outperform its peers this year.

We are, therefore, upgrading AMAT shares to Outperform. Our target price of $18 (14.4x P/E) supports this view.

Bear of the Day:

We are downgrading Genworth Financial (NYSE: GNW) to Underperform due to higher year-over-year losses at the U.S. Mortgage Insurance segment as well as weak results at Retirement and Protection and at International. Genworth's third-quarter results also fell short of the Zacks Consensus Estimate.

We expect the elevated unemployment rate will continue pressuring its mortgage insurance business. Though the business is showing signs of improvement, the line is still experiencing losses.

Additionally, improvements in its other business lines are expected to be slow, given the economy's sluggish recovery. Our six-month target price of $13.00 equates to 18.8x our earnings estimate for 2010 -- still a premium to the industry average of 12.1x.

Latest Posts on the Zacks Analyst Blog:

Apple Stomps Estimates Again

Apple Inc. (Nasdaq: AAPL) has done it again -- posted highly impressive earnings results that left the Zacks Consensus Estimates in the dust and its own guidance purely laughable. Apple Inc. generated $6.43 per share in its fiscal 1st quarter 2011 on revenues of $26.7 billion. The Zacks Consensus Estimates had been $5.38 per share and $24.3 billion in revenues. Apple's own forecast had been $4.80 and $23 billion, respectively.

This will salve a lot of investors feeling the burn of an initial $20 drop in AAPL's share price following CEO Steve Jobs' announcement that he will be once again taking medical leave from the company he founded and later resurrected. While not managing the day-to-day activities at Apple Inc., Jobs is still expected to be included in major strategic decisions for the company.

As it is turning out, well over half of the 2.25% share price loss in Tuesday trading before the bell has been made up in the after-market, following AAPL's stellar results.

Analyst estimate revisions broke through in a big way to the upside a week ago when Apple and Verizon announced that iPhones would be available to Verizon (NYSE: VZ) subscribers as of February 10th. This solidified what had long been expected regarding iPhone branching out from its exclusive deal with AT&T (NYSE: T). Verizon, the nation's leading wireless carrier, offers tremendous new exposure for the iPhone starting February 3rd, when customers will be able to pre-order their new iPhones.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

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Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

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