CHICAGO, July 12, 2012 /PRNewswire/ -- Zacks Equity Research highlights Edison International (NYSE: EIX) as the Bull of the Day and Procter & Gamble (NYSE: PG) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onComcast Corporation (Nasdaq: CMCSA), Walt Disney Co. (NYSE: DIS) and General Electric Co. (NYSE: GE).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We upgrade our long-term recommendation on Edison International (NYSE: EIX) from Neutral to Outperform owing to the inherent business strength of its regulated utility Southern California Edison. Although the company reported a first quarter earnings miss, California's supportive regulatory environment makes our bullishness on the company unfazed.
Going forward, our bullish outlook for the company is supported by consistent performance throughout its solid base of stable regulated utility operations, favorable resolution of the pending GRC & the cost of capital proceeding, incremental dividend, steady growth in rate base and ongoing alternative energy projects in-line with the renewable energy mandate.
Also, in light of the weak macro trend, the steadily rising dividend of Edison International adds extra shine to the stock. Thus we upgrade our rating on the stock with a price target of $55.00, based on a P/E of 22.9x our fiscal 2012 EPS estimate.
Procter & Gamble (NYSE: PG) recently lowered its sales and earnings outlook for the final quarter of fiscal 2012, marking the second successive cut in the company's guidance in the last two months.
Management blamed the latest guidance cut on lower-than-expected top-line growth due to a slowing global economy, sluggish market share growth in the developed countries and China, and foreign exchange headwinds. P&G is witnessing sluggish growth principally in North America and Western Europe, due to weak economic conditions and market share declines.
Moreover, rising commodity costs are hurting the company's margins. Other short-term headwinds include business disruptions in Venezuela, import restrictions in Argentina and negative impact of foreign exchange. We have thus downgraded our rating on P&G from Neutral to Underperform as most of these issues are expected to persist and pressure earnings in the near term.
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Comcast Sells Stake in A&E
NBC Universal, a subsidiary of Comcast Corporation (Nasdaq: CMCSA) – the largest cable MSO in the U.S. – recently announced plans to sell its 15.8% stake in A&E Television Networks for $3.03 billion.
A&E Television Networks is known for its biographies and documentary shows including popular stations like The History Channel and The Biography Channel.
A&E Television Networks was primarily by a three-way partnership involving Walt Disney Co. (NYSE: DIS), NBC Universal and Hearst Corp. With NBC Universal selling its stake, the other two co-owners will each get a 50% share of A&E Network.
Most industry analysts believe that the cash received from the sale of A&E stake will be used by Comcast to purchase the remaining 49% stake of NBC Universal from General Electric Co. (NYSE: GE).
In January 2011, Comcast bought a 51% stake in NBC Universal from General Electric for a total consideration of $13.75 billion (inclusive of cash and cable business contributed by Comcast). It was then decided that General Electric will sell the remaining 41% stake in NBC over the next seven years.
The total assets of NBC Universal were valued at nearly $30 billion in December 2009, when Comcast struck a deal with the company. Considering the steep valuation, Comcast requires huge cash to complete the transaction going forward. With just over $2 billion in cash currently on its books, divesting the A&E stake will significantly improve Comcast's cash position, thereby helping the company to meet its required target.
Currently, we are maintaining our long-term Neutral recommendation on Comcast. Comcast has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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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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