CHICAGO, April 17, 2012 /PRNewswire/ -- Zacks Equity Research highlights: Hain Celestial Group (Nasdaq: HAIN) as the Bull of the Day and Citi Trends, Inc. (Nasdaq: CTRN) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Target Corporation (NYSE: TGT), Wal-Mart Stores Inc. (NYSE: WMT) and Costco Wholesale Corporation (Nasdaq: COST).
A leader in natural food and personal care products with an array of well-known brands, Hain Celestial Group (Nasdaq: HAIN) offers investors one of the strongest growth profiles in the industry. The company's strategic investments plus continued efforts to contain costs, increase productivity, and enhance cash flows and margins have enabled it to deliver healthy results.
This is quite evident from Hain's second-quarter 2012 results. The quarterly earnings of $0.52 per share beat the Zacks Consensus Estimate of $0.49, and rose 33.3% from the prior-year quarter. The company's top line also grew an impressive 32.1%.
The company continues to expect total revenue between $1,455 million and $1,480 million, and earnings in the range of $1.63 to $1.73 per share for fiscal 2012. Buoyed by better-than-expected results and an optimistic outlook, we maintain our Outperform recommendation on the stock.
Citi Trends, Inc.'s (Nasdaq: CTRN) falling comparable store sales, coupled with rising cost of goods sold and operating expenses, battered fourth-quarter 2011 results. The company incurred a quarterly loss of $0.18 per share, falling drastically from the year-ago quarter earnings of $0.64 per share. The results, however, bettered the Zacks Consensus Estimate of a loss of $0.20 per share.
Further, due to uncertainty hovering around sales, given the global economic unrest, the company decided not to provide any guidelines unless it finds any near-term catalysts to drive sales. Intense competition from other retailers, seasonal nature of business and risks associated with sourcing merchandise from developing countries may further undermine the company's future growth prospects.
Currently, we are maintaining a long-term Underperform recommendation on the stock. Our target price of $10.00 is based on P/CF (price-to-cash flow) multiple of 8.27x.
The Zacks Consensus Estimates for Target Corporation (NYSE: TGT) have been portraying an upward trend as the analysts covering the stock have become more constructive after the company posted better-than-expected March sales results and raised its first-quarter 2012 earnings projection.
March Sales in Brief
The Easter holiday and a favorable weather aided Target to post strong sales results for the five-week period ended March 31, 2012. The company registered an increase of 7.3% in comparable-store sales for March 2012, contrary to a 5.5% decline in the prior-year period. Net retail sales rose 7.9% to $6,427 million from $5,955 million reported in the prior-year period.
Management noted that the company's March sales surpassed its expected growth range, reflecting an increase in average transaction size coupled with a rise in comparable store transactions.
What the Company Guided
Buoyed by the better-than-expected results, Target raised its first-quarter 2012 bottom-line forecast. The company now expects first quarter earnings between of $1.04 and $1.10 per share versus its earlier guidance range of 97 cents to $1.07. Going forward, Target expects comparable-store sales to increase in low to mid-single-digit range for April 2012.
Magnitude of Estimate Revisions
Clearly, a positive sentiment is palpable among most of the analysts, who remain optimistic on Target's performance. The Zacks Consensus Estimate has risen with the majority of analysts remaining bullish on the stock. The magnitude of estimate revisions by the analysts is clearly reflected through changes in the Zacks Consensus Estimates.
The Zacks Consensus Estimate for the first quarter of 2012 jumped 4 cents to $1.00 in the last 30 days. The Zacks Consensus Estimate for the second quarter remained constant at 98 cents in the last 30 days, as the revisions made by the analysts had a neutral impact on it.
For fiscal 2012, the Zacks Consensus Estimate rose 4 cents to $4.25 in the last 30 days. For fiscal 2013, the Consensus Estimate increased by a couple of cents to $4.82.
Target is consistently trying every means to keep afloat in this sluggish economic environment. The company's P-fresh remodel program, 5% REDcard Rewards program, City Target stores, The Shops at Target initiatives and its foray into the foreign market are its arsenal to safeguard against any unprecedented event.
However, the greater concentration of Target's revenue generating capability in a few regions of the United States, poses a competitive threat, compared to Wal-Mart Stores Inc. (NYSE: WMT) and Costco Wholesale Corporation (Nasdaq: COST), which are geographically more diversified and more resourceful.
Consequently, we have a long-term 'Neutral' recommendation on the stock. Moreover, Target holds a Zacks #3 Rank that translates into a short-term 'Hold' rating.
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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