Zacks Bull and Bear of the Day Highlights: Harley-Davidson, Guess, Research In Motion, Apple and Google
CHICAGO, May 30, 2012 /PRNewswire/ -- Zacks Equity Research highlights Harley-Davidson, Inc. (NYSE:HOG) as the Bull of the Day and Guess Inc. (NYSE:GES) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Research In Motion Limited (Nasdaq:RIMM), Apple Inc (Nasdaq:AAPL) and Google Inc (Nasdaq:GOOG).
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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:
Harley-Davidson, Inc. (NYSE:HOG) commands a lion's share of the U.S. motorcycle market due to its extraordinary brand value. The company began its restructuring activities in 2009 to mitigate a weakened economy and succeeded in generating substantial savings.
In the first quarter of 2012, the company posted a 44% rise in profits and beat the Zacks Consensus Estimate by $0.03 per share. The company also upgraded its shipment guidance for the full year 2012 to 245,000 to 250,000 motorcycles from 240,000 to 245,000 motorcycles previously.
As such, we continue with our long-term recommendation of Outperform on its shares with a target price of $57.00. This target price represents 20.1X our 2012 EPS estimate.
Guess Inc.'s (NYSE:GES) first quarter of fiscal 2013 earnings of $0.30 per share surpassed Zacks Consensus Estimate. However, it fell significantly short of year-ago quarter earnings of $0.54.
Severe austerity measures taken by European governments to combat the debt crisis resulted in reduced spending of the consumers, which was offset by a slight improvement of sales in North American. Operating margin shrank owing to higher SG&A as well as promotional activities. Same store sales also declined in the quarter.
A weaker Euro and lower orders in the European region are expected to keep revenue at lower levels. Cotton cost and SG&A is also expected to remain at high levels in the coming quarter crippling margins of the company.
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RIMM Plans Another Restructuring
Struggling Canadian smartphone manufacturer Research In Motion Limited (Nasdaq:RIMM) is preparing for another round of restructuring, which could reduce its global workforce by 2,000. We believe that the poor performance of the company – facing market share declines due to stiff competition from Apple Inc's (Nasdaq:AAPL) iPhone and Google Inc's (Nasdaq:GOOG) android based smartphone – is the primary reason for the layoffs.
This is the second time in almost a year that the company is reducing its employee strength after it sacked some 2,000 employees in July 2011. The restructuring process, which is expected to come from the company's legal, marketing, sales, operational and human resource divisions, will slash its employee strength to 14,500.
The handset manufacturer, once a dominant player in the wireless e-mail sector, is currently facing significant market share loss to iPhone and android based smartphones. Research in Motion, which sells it smartphones under the Blackberry brand, has a secured and robust mailing system.
However, smartphones running on Apple's iOS and Google's Android platform supports thousands of application which has made them a preferred choice among customers. Recent report by IDC showed that among the 152.3 million smartphones that were shipped in the first three months of the year, the share of android based smartphones and iPhone is a staggering 125 million or 82.07%. RIMM continues to struggle as its market share has almost halved from its previous market share to 6.4%.
According to Research In Motion, the restructuring is a part of the company's long term goal of creating value for itself by improving the effectiveness of its resources and enhancing its operational efficiency, thereby saving $1 billion by the end of 2013. We believe, in addition to that, the maker of BlackBerry also needs to improve on its smartphone strategy to cope with the fierce competition from other manufacturers.
Recommendation: We are maintaining our long-term Underperform recommendation on Research In Motion Limited. Currently Research in Motion Limited has a Zacks #5 Rank, implying a short-term Strong Sell rating on the stock.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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