CHICAGO, Jan. 9, 2013 /PRNewswire/ -- Zacks Equity Research highlights Edison International (NYSE: EIX) as the Bull of the Day and Statoil ASA (NYSE: STO) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on ConAgra Foods, Inc. (NYSE: CAG), Ralcorp Holdings Inc. (NYSE: RAH) and Bank of America Corp. (NYSE: BAC).
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 third quarter earnings miss, we attribute it to a delay in the 2012 General Rate Case (GRC) rate case decision and continuing losses at the Midwest Generation unit.
Owing to California's supportive regulatory environment, our bullishness on the company remains unfazed. Going forward, our bullish outlook for the company is supported by consistent performance throughout its solid base of stable regulated utility operations, a steady growth in its rate base and ongoing alternative energy projects in-line with the renewable energy mandate.
Also, the steadily rising dividend of Edison International adds extra shine to the stock. Thus we upgrade our rating on the stock from Neutral to Outperform with a price target of $56.00 based on a P/E of 17.4x our fiscal 2013 EPS estimate.
We are downgrading our recommendation on Statoil ASA (NYSE: STO) ADRs to Underperform from Neutral. The company reported lower-than-expected earnings in the third quarter, mainly due to high exploration costs and low liquids production with steep operating costs in Norway.
While reiterating its 2012 guidance, management now expects 2013 production to decline sequentially versus the previous flat forecast. While Statoil is fairly active in its development operations, we remain apprehensive as hiccups remain in the company's production growth for the time being.
Considering the aforementioned reasons, we are downgrading our long-term recommendation. Our $23 price objective, based on the 2013 P/E multiple of 8.0x, supports this view.
Latest Posts on the Zacks Analyst Blog:
ConAgra to Offer Up Shares
ConAgra Foods, Inc. (NYSE: CAG) announced offering sale of its shares worth $240.0 million through an underwritten public offering.
The total offer consists of approximately 8.1 million shares to be issued at a price of $29.50 (the closing price on December 31, 2012). In addition, the company has also offered the underwriter a 30-day option to purchase shares worth $35.0 million.
The proceeds from the issue will be utilized to fund ConAgra's pending acquisition ofRalcorp Holdings Inc. (NYSE: RAH) at a price of $90.0 per share. The acquisition was announced in late November last year. In case the acquisition does not get through, the proceeds will be utilized for general corporate purposes.
The acquisition, valued at $6.8 billion, is expected to be complete by March 2013, subject to regulatory approvals. Subsequent to the acquisition of Ralcorp, ConAgra will emerge as the largest private label packaged food company in North America. Management expects the combined entity to garner sales of over $18 billion in the future. Starting from the fourth year, ConAgra is expected to derive cost synergies of about $225 million per year from the acquisition.
BofA Merrill Lynch, a wing of Bank of America Corp. (NYSE: BAC), is the sole book running manager for the offering of common stock.
The company had a total of 405.8 million shares and a market capital of $12.18 billion at the close of trading on January 3, 2013.
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.
About the Analyst Blog
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.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment
Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339
SOURCE Zacks Investment Research, Inc.