Zacks Bull and Bear of the Day Highlights: Hibbett Sporting Goods, HSBC Holdings plc, Dollar General, SAP and SuccessFactors

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Dec 06, 2011, 09:30 ET

CHICAGO, Dec. 6, 2011 /PRNewswire/ -- Zacks Equity Research highlights Hibbett Sporting Goods (Nasdaq: HIBB) as the Bull of the Day and HSBC Holdings plc (NYSE: HBC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Dollar General (NYSE: DG),SAP (NYSE: SAP) and SuccessFactors (NYSE: SFSF).

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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:

Bull of the Day:

Hibbett Sporting Goods' (Nasdaq: HIBB) earnings of $0.59 per share for the third quarter ended October 2011 beat the Zacks Consensus Estimate of $0.51 and surged 34% from the prior-year quarter on the heels of robust performance of footwear and apparel sales along with operational efficiencies. Management has raised its earnings guidance for the current fiscal year to a range of $2.05 to $2.11 a share.

Management also remains committed to expanding the store network. Moreover, Hibbett's sharp focus on mid-sized and smaller markets and strategic mix of branded as well as localized merchandise provide an edge over its rivals. Also, the company has a healthy balance sheet with no bank debt.

Our long-term Outperform recommendation on the stock indicates that it would perform well above the market. Our target price of $47.00, 22.2x 2011 EPS, reflects this view.

Bear of the Day:

We are initiating our coverage on HSBC Holdings plc (NYSE: HBC) with an Underperform recommendation. Our primary concern is the harsh impact from the deepening Eurozone crisis. Moreover, the company is suffering from weak revenue growth in its mature markets due to the ongoing low interest rates and regulatory restrictions.

The company's cost containment measures will help it deal with economic pressures to a great extent. But we expect high inflation in some key Asian markets, slothful loan growth, insufficient core operating performance and high wage inflation to restrict the company's growth, at least in the near term.

Our six-month target price of $36.00 per ADS equates to about 8.5x our earnings estimate for fiscal 2011. This target price implies an expected negative total return of 9.0% over that period. This is consistent with our long-term Underperform recommendation on the ADSs.

Latest Posts on the Zacks Analyst Blog:

Growing Optimism in the Eurozone

Growing hopes of positive momentum on the Euro-zone front will likely help stocks build on last week's strong gains as European leaders meet on Friday for a decisive summit meeting. The expectation is that this week's summit meeting will help provide the framework for greater fiscal integration in the union, which will pave the way for the European Central Bank (ECB) to play a decisive role in propping up individual member country bonds.

Notwithstanding the paucity of U.S. economic data this week, the domestic outlook appears to be in very good shape. The holiday shopping season has gotten off to a solid start, the labor market is steadily improving, and the manufacturing sector appears to have rebounded nicely from the summer slump. All high-frequency indicators are pointing towards fourth-quarter GDP growth in the 2.5% to 3% range.

Europe Europe

We will see if those lofty expectations come to fruition. But in the run up to the Friday summit, the technocratic government of Italian prime minster Mario Monti unveiled today austerity measures aimed at bringing down the country's budget deficit. These spending cuts and other pension changes, which are equivalent to roughly 1.9% of Italy's GDP, will be presented to the Italian parliament for approval late today. The bond market appears to be giving these measures a vote of confidence as evident from the drop in Italian government bond yields today. We will have to wait and see if this trend can be sustained in the coming days.

Dollar General DG SAP SAP SuccessFactors SFSF $3.4 billion

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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Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

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