Zacks Bull and Bear of the Day Highlights: Gap, Expeditors International, QCR Holdings, Republic First Bancorp and Pacific Continental
CHICAGO, Sept. 25, 2012 /PRNewswire/ -- Zacks Equity Research highlights Gap, Inc. (NYSE:GPS) as the Bull of the Day and Expeditors International (Nasdaq:EXPD) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on QCR Holdings Inc. (Nasdaq:QCRH), Republic First Bancorp Inc. (Nasdaq:FRBK) and Pacific Continental Corp. (Nasdaq:PCBK).
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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:
Based on strong second-quarter 2012 results, we have upgraded our long-term recommendation on Gap, Inc. (NYSE:GPS) to Outperform. Driven by increased sales, improved margins and lower share counts, Gap's earnings of $0.49 per share for the quarter surged 40% from the prior-year period and came ahead of the Zacks Consensus Estimate of $0.48.
Moreover, net sales increased 5.6% to $3,575 million during the quarter, primarily driven by a 4% increase in comparable store sales. Further, solid quarterly performance prompted management to raise its fiscal 2012 earnings guidance range to $1.95-$2.00 per share from $1.78-$1.83 forecasted earlier.
The company is in the midst of its international expansion strategy. Further, to counter the domestic market saturation, Gap is aiming total sales of approximately 30% from its overseas operations and online business by 2013.
We maintain our Underperform recommendation on Expeditors International (Nasdaq:EXPD). The company's second quarter earnings missed the Zacks Consensus Estimate as well as the year-ago earnings, given low revenue yield in the air and ocean freight segments. Total revenue was also lower than expected given an unfavorable demand trend.
We remain concerned over the macroeconomic environment that continues to affect the global demand trend, thereby hurting Expeditors' performance. Further, a hike in freight rates by ocean liners is also expected to pose a headwind to the company.
Competitive threats as well as dependence on asset-based transportation providers contribute to our negative stance on the company. Hence, we have an Underperform rating with the price target of $35, based on 21.5x our earnings estimate for 2012.
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QCR Holdings: A Strong Buy
Rising earnings estimates on the back of decent second quarter results – including a 4.8% earnings surprise – helped QCR Holdings Inc. (Nasdaq:QCRH) achieve a Zacks #1 Rank (Strong Buy) on September 22. Moreover, the bank has delivered two positive earnings surprises in the last four quarters with an average beat of 44.7%.
With a solid year-to-date return of 58.6%, this stock offers an attractive investment opportunity.
The Rank Driver
Better than expected second-quarter earnings along with improving credit quality and robust asset position were the primary rank drivers for this stock.
On July 23, QCR Holdings reported its second quarter earnings per share of 44 cents, beating the Zacks Consensus Estimate of 42 cents by 4.8%. Strong results for the quarter were primarily aided by higher net interest income partly offset by higher operating expenses.
Net Interest income came in at $14.5 million, up nearly 4.0% from the prior-year quarter. Net interest margin was 3.16% as against 3.21% in the year-ago period.
However, non-interest income decreased 2.5% year over year to $4.1 million. The fall was mainly driven by lower trust department fees and deposit service fees.
Operating expenses increased 4.4% from the prior-year quarter to $13.1 million. The hike was driven by higher salaries and benefits as well as other expenses.
Provisions for loan/lease losses totaled $1.0 million, down 37.3% from the prior-year quarter. Net charge offs fell 42.6% on a year-over year basis to $1.9 million.
Total Assets summed to $2.04 billion, rising 8.8% on a year-over-year basis. As of June 30, 2012, QCR Holdings Tier 1 risk-based capital ratio was 11.40% and total capital ratio was 13.00%. Tier 1 leverage capital ratio stood at 8.2%.
Earnings Estimate Revisions
The Zacks Consensus Estimate for 2012 increased 3.9% to $1.87 per share based on 1 out of 2 upward revisions over the last 30 days. The current estimate implies a year-over-year growth of 102.7%.
For 2013, the Zacks Consensus Estimate moved up by 2.5% to $2.03 per share over the last 60 days.
Valuation
QCR Holdings currently trades at a forward P/E of 7.7x, a 31.8% discount to the peer group average of 11.4x. On a price-to-book basis, the shares are trading at 0.50x, a 56.5% discount to the peer group average of 1.15x.
National Bank has a trailing 12-month return on equity (ROE) of 8.8% compared with the peer group average of 9.3%.
About the Company
QCR Holdings, Inc. is the bank holding company of Quad City Bank and Trust Company. The Bank provides full-service commercial and consumer banking, and trust and asset management services for the Quad Cities, Cedar Rapids, and Rockford communities. It is headquartered in Moline, Illinois. The company has a market capitalization of roughly $70.09 million.
Other Zacks #1 Rank Financial companies include Republic First Bancorp Inc. (Nasdaq:FRBK) and Pacific Continental Corp. (Nasdaq:PCBK).
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.
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