Zacks Bull and Bear of the Day Highlights: Interactive Brokers Group, Big 5 Sporting Goods, Agrium, CF Industries Holdings and Potash Corp. of Saskatchewan
CHICAGO, May 6, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Interactive Brokers Group (Nasdaq: IBKR) as the Bull of the Day and Big 5 Sporting Goods (Nasdaq: BGFV), as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Agrium Inc. (NYSE: AGU), CF Industries Holdings Inc. (NYSE: CF) and Potash Corp. of Saskatchewan Inc. (NYSE: POT).
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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:
We are upgrading our recommendation on Interactive Brokers Group (Nasdaq: IBKR) to Outperform based on substantially better-than-expected first quarter results with the rebound of Market Making and continuous growth in Electronic Brokerage. The initiation of a quarterly dividend was also an impressive move.
Results benefited mainly from improved top line, which was partially offset by higher-than-expected interest and non-interest expenses. Interactive Brokers' fundamentals remain strong with a liquid balance sheet, sturdy capital base and high barriers to entry.
Our six-month target price of $20.00 per share equates to about 17.5x our earnings estimate for 2011. Combined with a quarterly dividend of $0.10 per share, this target price implies an expected total return of 17.0% over that period. This is consistent with our Outperform recommendation.
Big 5 Sporting Goods (Nasdaq: BGFV) earnings of $0.13 per share for the first quarter 2011 missed the Zacks Consensus Estimate of $0.19, and also fell short of its own guidance range of $0.15 to $0.22 per share. The company posted a 43.5% decline in the earnings due to lower same-store sales and higher operating expenses.
Consequently, the company now expects second-quarter 2011 earnings between $0.06 and $0.14 per share. Big 5 Sporting also encounter intense competition from national chains, mass merchandisers and regional stores, which may also dent its profitability.
Moreover, seasonal nature of business and risks associated with sourcing from foreign countries also undermine the company's future operating performance. Currently, we maintain long-term Underperform recommendation on the stock.
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Agrium Posts Record 1Q
Agrium Inc. (NYSE: AGU) reported record net earnings of $160 million or $1.02 per share in the first quarter of 2011, surpassing the Zacks Consensus Estimates of 90 cents per share. It also exceeded the prior-year loss of $1.0 million or 1 cent per share. Including one-time charges, Agrium recorded net earnings of $171 million or $1.09 per share in the first quarter of 2011.
The first-quarter results include a pre-tax share-based payment expense of $12 million or 5 cents diluted earnings per share and pre-tax gains of $9 million or 4 cents diluted earnings per share on natural gas and other commodity hedges.
Results benefited from record high crop prices and overall strong fundamentals for agriculture and the crop input market. Crop nutrient demand was strong in North America and globally, providing underlying support to crop nutrient prices.
Revenues in the quarter rose 59.8% year over year to $3.0 billion, which was above the Zacks Consensus Estimates of $2.1 billion. The company's gross profit increased by $363 million to $725 million, primarily due to higher gross profit across all major products.
Outlook
With the strength in markets across most products and services, Agrium expects a great second quarter and believes industry fundamentals will remain strong in 2011.
For the first half of 2011, Agrium expects EPS to be in the range of $4.40 to $4.90.
Agrium faces stiff competition from CF Industries Holdings Inc. (NYSE: CF) and Potash Corp. of Saskatchewan Inc. (NYSE: POT).
Currently, Agrium maintains a Zacks #3 Rank (short-term Hold recommendation) over the next one-to-three months.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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