Zacks Bull and Bear of the Day Highlights: EI DuPont de Nemours, Bank of America, ConocoPhillips, ExxonMobil and Chevron
Apr 28, 2011, 10:20 ET
CHICAGO, April 28, 2011 /PRNewswire/ -- Zacks Equity Research highlights: EI DuPont de Nemours & Co. (NYSE: DD) as the Bull of the Day and Bank of America (NYSE: BAC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on ConocoPhillips (NYSE: COP), ExxonMobil Corp. (XOM) and Chevron Corp. (CVX).
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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:
EI DuPont de Nemours & Co. (NYSE: DD) reported first quarter earnings of $1.52 per share, surpassing the Zacks Consensus Estimate by $0.15. Revenues reached $10.0 billion, compared to the Zacks Consensus Estimate of $9.3 billion. Earnings benefited from price increases that significantly outpaced higher raw materials and energy costs.
The company remains vigilant in its focus on productivity with respect to fixed costs, variable costs and working capital. DuPont increased its full-year earnings guidance to between $3.65 and $3.85 per share from a range of $3.45 to $3.75 due to stronger business results, especially in Safety & Protection and Performance Chemicals as well as in the developing markets.
We remain optimistic on the company and maintain our Outperform recommendation with a target price of $67.00. DuPont currently carries a Zacks #1 Rank (Strong Buy).
Bank of America's (NYSE: BAC) first-quarter 2011 earnings came in substantially lower than the Zacks Consensus Estimate. Lower top line and higher non-interest expense were primarily responsible for lower-than-expected results. Reduced mortgage banking income and higher litigation expenses were also among the negatives.
The Federal Reserve's objection to the company's proposed capital deployment in the second half of 2011 remains a major headwind at this point. After reviewing the results, we are maintaining our Underperform recommendation on the shares.
We are also concerned about Bank of America's elevated cost structure. Non-interest expense rose significantly during the last two quarters of 2010. As the company is in the process of addressing legacy issues and continues to invest in its franchise, expenses are expected to remain high through 2011.
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Conoco Misses, Output Falls
ConocoPhillips (NYSE: COP) reported first-quarter 2011 earnings of $1.82 per share (excluding non-recurring items), way below the Zacks Consensus Estimate of $1.97 due to lower production volumes, the absence of equity earnings from LUKOIL and higher taxes.
However, the quarter's earnings increased from $1.47 in the year-ago quarter. The improved performance primarily reflects a hike in commodity prices associated with better U.S. refining margins.
Revenues in the reported quarter jumped more than 27% year over year to $58.2 billion, comfortably beating the Zacks Consensus Estimate of $53.7 billion.
Outlook
We remain optimistic on ConocoPhillips' ability to generate free cash flow by unlocking capital tied up in non-core assets. The third-largest U.S. oil company by market value, ConocoPhillips, after ExxonMobil Corp. (XOM) and Chevron Corp. (CVX), said it expects its output to grow 2% to 3% a year on a long-term basis.
Although we are encouraged by the recent discoveries and the company's new exploration efforts, the transition into improvements in the reserves base, finding and development costs, the production growth remains a long-term story.
The divestment of certain non-strategic assets helps the company to apportion capital to higher margin projects such as Canadian oil sands, LNG and unconventional resource plays. Houston-based ConocoPhillips plans to sell an additional $5 billion to $10 billion worth of non-core resources by the end of 2012 as it looks for more oil and gas production and exploration by streamlining its business and improving shareholder returns. Notably, Conoco completed the sale of its OAO LUKOIL shares in the first quarter.
Again, ConocoPhillips' exploration initiatives toward liquids rich plays such as Eagle Ford, Bakken and North Barnett shale plays are gaining momentum.
We maintain our long-term Neutral recommendation on the stock. Conoco holds a Zacks #3 Rank, which translates to a short term 'Hold' rating.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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