CHICAGO, Oct. 14, 2011 /PRNewswire/ -- Zacks Equity Research highlights Interactive Brokers Group (Nasdaq: IBKR) as the Bull of the Day and Teradyne, Inc. (NYSE: TER) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Google Inc. (Nasdaq: GOOG), Apple, Inc. (Nasdaq: AAPL) and Motorola Mobility (NYSE: MMI).
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 as its brokerage business continued to perform well and the company reinstated its quarterly dividend. Despite declining market volumes, Interactive Brokers' Market Making segment is positioned to improve on better revenue capture.
We expect the company's strategy with respect to structural changes in the business to bode well. Also, larger average trade sizes continue to improve its Electronic Brokerage segment results.
Our six-month target price of $17.00 per share equates to about 13.5x our earnings estimate for 2011. Combined with a quarterly dividend of $0.10 per share, this target price implies an expected total return of 23.1% over that period. This is consistent with our Outperform recommendation.
Teradyne, Inc. (NYSE: TER) is a leading provider of automated test equipment. The company's second quarter earnings beat the Zacks Consensus, although revenue growth was sluggish. Forward guidance indicates slack demand, particularly for back-end testing equipment.
While there could be pockets of strength, we think that the negative mix of business, relatively lower exposure to the memory segment and the uncertainty at semiconductor manufacturers will impact results in the next few quarters. As a result, we think that investors are likely to discount the product lineup, leaner cost structure and strong balance sheet.
The company is expected to return earnings growth of 11.9% compared to the peer group average of 12.6%. We believe there is further downside to the shares and we are therefore downgrading the shares to Sell. Our price target also moves from $17 to $12 (10.3X P/E).
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Google Hits Another Homer in Q3
Even though analysts seemed a tad wary of Google Inc. (Nasdaq: GOOG) 3rd quarter 2011 earnings numbers after the closing bell today, the search engine king stepped up to the plate and took one long. Revenues of $9.72 billion were up 33% year over year and 8% sequentially. Diluted EPS (how Zacks reports Google's earnings) reached $8.33, easily topping the $7.59 Zacks Consensus Estimate.
The 10% positive earnings surprise bested the average positive surprise over the last 4 quarters of 8.5%, and after-market traders duly took notice. Up 1.91% in regular Thursday trading, GOOG shares have shot up 5.2% in the after-market, which is tempered a bit from the initial reaction to the earnings report.
Kicking off Google's press release this afternoon was a proud notice that Google+, GOOG's new social network, has already surpassed 40 million users. Much the way Google has the pluck to have attempted to rival Apple, Inc.'s (Nasdaq: AAPL) iPhone with its Android operating system for smartphones, so does Google+ appear to be going after market share from soon-to-go-public Facebook, Inc.
This all said, Google does have its work cut out for it. Aside from buying Motorola Mobility (NYSE: MMI) for $12.5 billion earlier in the 3rd quarter, Google has also increased its workforce by 10% over the past three months. Add some anti-trust hearings with the Federal Trade Commission and some concerns over Android patent wars, and it may be understandable why 4 analysts have actually downwardly revised estimates over the past month for Q4 and the full fiscal year.
Then again, with Google's growing reputation of continuing to beat market expectations soundly (nearly always -- GOOG did post a 1.4% miss in Q1 2011), we'll see if some of the 21 current earnings estimates on the company are revised upward in the coming days.
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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