Zacks Bull and Bear of the Day Highlights: Dillard's, NYSE Euronext, Amazon.com, Netflix and Apple
CHICAGO, Jan. 8, 2013 /PRNewswire/ -- Zacks Equity Research highlights Dillard's (NYSE:DDS) as the Bull of the Day and NYSE Euronext (NYSE:NYX) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Amazon.com Inc. (Nasdaq:AMZN), Netflix Inc. (Nasdaq:NFLX) and Apple Inc. (Nasdaq:AAPL).
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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:
Driven by strong same-store sales performance along with improved margins, Dillard's (NYSE:DDS) third-quarter 2012 earnings of $0.96 per share surged two-folds from the prior-year quarter, and outpaced the Zacks Consensus Estimate of $0.75. Moreover, total revenue grew 4.8% year over year to $1,450.0 million and beat the Zacks Consensus Estimate of 1,442.0 million.
Management is undertaking restructuring initiatives and inventory reduction efforts to reduce costs while boosting its profitability. We believe Dillard's healthy balance sheet and adequate cash flows allow it to make shareholder-friendly moves, such as acquisitions, dividends and share repurchases.
Moreover, we believe Dillard's wholly-owned Captive Insurance Company and REIT facilitate efficient risk management as well as boost its liquidity position. Currently, we maintain a long-term Outperform recommendation on the stock.
NYSE Euronext's (NYSE:NYX) third quarter earnings breezed past the Zacks Consensus Estimate but plunged year over year based on weak volumes and pricing across trading venues, which led to a reduced top line and lower operating margin. However, lower expenses partially offset the downsides, although capital deployment remained intact.
The proposed merger with ICE should eventlly boost efficiencies although higher debt raises the concerns of the rating agencies. NYSE aims to further augment the long-term growth strategies by developing a clearing house in Europe, enhancing technology and risk-management services and global expansion, among others. These initiatives carry an initial cost and regulation burden.
Our six-month target price of $29.00 equates to about 16.0x our earnings estimate for 2012. With an annual dividend of $1.20, this price target implies a negative total return of 8.2% over that period. This is consistent with our long-term Underperform recommendation on the shares.
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Amazon, A+E in Licensing Deal
Amazon.com Inc. (Nasdaq:AMZN) announced a content licensing agreement with A+E Networks, extending the archive of television shows and films currently available on its streaming video site, Amazon Prime Instant Video.
Amazon Instant Video is a digital video streaming and download service that lets users rent, buy or subscribe to a range of video content.
The deal with A+E Networks will expand Amazon's already-large selection of movies and television shows available to customers as part of their Prime membership. Amazon said that popular shows from A&E, bio, HISTORY and Lifetime channels will now be available on Prime.
The deal will add TV episodes from some of the highest rated television reality shows like Pawn Stars, Storage Wars and Dance Moms to Amazon's video streaming library, making it a significant force in the video streaming segment and increasing competition for Netflix Inc. (Nasdaq:NFLX) and Apple Inc. (Nasdaq:AAPL).
Last September, the online video rental company Netflix had lost the rights to many of these shows due to the expiration of its term,with only a few older Biography that remain available on Netflix. Though this deal is a big blow to Netflix, threatening its leadership in a growing market, its Internet video library is estimated to have more than 60,000 titles, still far more than Amazon's service.
The online retailer has been consistently upgrading and promoting movies and television shows on its streaming video service. Over the past 12 months, Amazon has entered into a number of deals with every major Hollywood studio, as well as some of the major cable networks. Prime Instant Video now features more than 33,000 movies and TV episodes for Amazon Prime members to stream on Kindle Fire HD, iPad, iPhone, iPod touch, Roku, Xbox 360, PlayStation 3 and Wii U.
We believe that one of the key strategies for Prime Instant Video remains the expansion of its video archive. Netflix has seen the benefits of such an expansion in recent times, in spite of it instituting rate increases.
Amazon is one of the leading players in an extremely fast-growing market. In the third quarter, Amazon's revenue of $13.81 billion was better than guidance and inline with consensus expectations. Management attributed the increase in revenue to the growing consumption of digital content across different categories owing to the advantageous value proposition Amazon was able to provide to its customers.
Currently Amazon retains a Zacks #3 Rank (Hold).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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