CHICAGO, Feb. 15, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Estee Lauder Companies (NYSE: EL) as the Bull of the Day and Thoratec Corp. (Nasdaq: THOR) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Wells Fargo & Company (NYSE: WFC), U.S. Bancorp (NYSE: USB) and JPMorgan Chase & Company (NYSE: JPM).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Estee Lauder Companies (NYSE: EL) is one of the leading players in the global cosmetics space and commands a strong portfolio of well-established brands. The company is currently undertaking initiatives to reduce overheads and optimize inventory levels, which augur well for future operating performance.
Furthermore, Estee Lauder has a consistent track record of returning cash to shareholders in the form regular dividend payments. Additionally, the company reported a robust second quarter 2011, with earnings up 38% year-over-year.
Quarterly earnings also outpaced the Zacks Consensus Estimate by 23%. We are currently upgrading our recommendation on Estee Lauder from Neutral to Outperform. The shares have a Zacks #1 Rank (Strong Buy).
We downgrade our rating for Thoratec Corp. (Nasdaq: THOR) to Underperform. Fourth-quarter fiscal 2010 revenues and earnings both missed the Zacks Consensus Estimates.
Although Thoratec is still a growing company, its single product line and small size make it a riskier proposition. HeartWare has filed a PMA for a similar device, which will end Thoratec's dominance for the BTT indication in late 2011 or early 2012, leaving it more dependent on the DT indication. However, growth estimates for the DT segment tend to vary.
A lack of clear visibility into the pipeline of next-generation VADs, and absence of defined milestones, further clouds the outlook. It appears that the early hyper-growth phase enjoyed by the company is now leading to more normalized growth.
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Wells Fargo Kept at Neutral
We are reiterating our Neutral recommendation on Wells Fargo & Company (NYSE: WFC) following the company's fourth quarter and full-year earnings release. The reaffirmation follows our analysis of the company's fundamentals, strategic acquisition, threats and opportunities.
Fourth Quarter and Full-Year 2010 Results
Wells Fargo's fourth quarter 2010 operating earnings came in at 61 cents per share, a penny short of the Zacks Consensus Estimate and a penny above the prior quarter. However, the results fared much better than 8 cents earned per share in the year-ago quarter.
Quarterly results at Wells Fargo reflected a better-than-expected increase in revenues. The company also experienced a decent reserve release of $850 million as a result of improved portfolio performance. Yet, an increase in expenses was the downside.
For full-year 2010, the company earned $2.21 per share, missing the Zacks Consensus Estimate of $2.24 but substantially above the prior year's earnings of $1.75.
U.S. Bancorp (NYSE: USB), one of Wells Fargo's peer group companies, reported fourth quarter 2010 earnings of 49 cents per share. However, excluding significant items, earnings came in at 46 cents per share, in line with the Zacks Consensus Estimate.
Quarterly results of U.S. Bancorp reflected growth in revenues, as a result of the business growth initiatives taken by the company, including acquisitions. Credit metrics also showed an improvement. However, the positives were offset by an increase in expenses.
However, Wells Fargo's close competitor, JPMorgan Chase & Company (NYSE: JPM) held the banking banner high with impressive results. The company reported fourth quarter earnings of $1.12 per share, handily beating the Zacks Consensus Estimate of $1.00. The better-than-expected fourth quarter earnings resulted from higher non-interest revenue and a slowdown in provision for credit losses.
We believe that with its diverse geographic and business mix, Wells Fargo is well positioned compared with its peers. The Wachovia acquisition and the demise of some smaller players helped it garner a larger share in the mortgage markets.
Yet the recent financial regulations are expected to have a negative impact on both top and bottom-line results of the company. Besides, costs associated with loan resolutions and loss mitigations are also expected to remain near-term dampeners.
Wells Fargo currently retains its 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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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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