CHICAGO, Oct. 3, 2011 /PRNewswire/ -- Zacks Equity Research highlights Athenahealth, Inc. (Nasdaq: ATHN) 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 General Motors Co. (NYSE: GM), Ford Motor Co. (NYSE: F) and Fiat SpA (OTC: FIATY).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We initiate our coverage on Athenahealth, Inc. (Nasdaq: ATHN) with an Outperform rating. Second-quarter fiscal 2011 earnings per share of $0.14 beat the Zacks Consensus Estimate of $0.11. Athenahealth's web-based deployment provides a low-cost, scalable service while its flexible rules engine leads to higher efficiency in claims settlements.
The company has made rapid strides in capturing the EHR business of physician practices. However, this segment is shrinking as hospitals increasingly absorb independent practices. Athenahealth has geared itself for the enterprise segment through its strategic alliance with Microsoft and acquisition of Proxsys, both this year. Expansion of operating margin, a rising proportion of recurring revenues and better-than-expected quarterly results are pillars of strength.
It is noteworthy that the company has traditionally maintained high client satisfaction rates, which is important in an industry where referrals are an important source of business. Based on the company's stellar performance in the past and its potential for forecast-beating results in the future, we initiate a price target of $76 per share.
Sears Holdings Corp. (Nasdaq: SHLD) disappoints with its overall second-quarter 2011 results. The company's adjusted loss of $1.13 per share was well above the Zacks Consensus Estimated loss of $0.64 per share, while widening drastically from the prior-year quarter loss of $0.19 per share, primarily due to a sluggish top-line performance.
Management's cost-cutting initiatives for boosting profits did not help; improvement in merchandise mix and customer services would have been a better option. 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.
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S&P Raises GM's Ratings
Ratings agency Standard & Poor's (S&P) raised its corporate credit rating on General Motors Co. (NYSE: GM) by two notches to BB+ from BB- as its workers recently ratified a 4-year contract with the United Auto Workers (UAW). The agency also lifted its rating outlook on the company to "Stable" from "Positive". It believes the contract will help GM maintain profitability and continue generating cash in North America.
A couple of days back, workers at GM ratified the UAW deal as a majority of the workers voted for the same. Among the 48,500 workers, 65% of production workers, and 63% of skilled-trade workers voted for the deal.
Most of the workers, except at the entry-level, would not get annual pay raises, but signing bonuses totaling $5,000, profit-sharing checks and other payments amounting to at least $11,500 during the tenure of the deal.
Wages of entry-level workers would be increased 22% from the current $15.78 per hour. GM currently employs about 1,900 entry-level workers.
The deal would also save more than 6,000 U.S. jobs and create another 5,100 jobs at GM plants. The UAW estimated the deal would also add another 57,600 jobs at suppliers and other auto-related businesses.
It will save $50 million this year and $145 million in future years for GM as it would no longer need to pay for factory workers' legal services. As a result, factory worker costs would be reduced to $5 billion per year from $16 billion in 2005 and $11 billion in 2007.
S&P expects to raise Ford's corporate credit rating as well once the labor negotiations are over and a new and competitive contract is reached. Currently, Ford has a BB- credit rating from S&P with positive implications. The agency may lift it to BB+, which is a notch below investment grade, and assign a "Stable" outlook.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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