Zacks Bull and Bear of the Day Highlights: J.C. Penney, Gerdau S.A., ExxonMobil Corporation, Chevron and ConocoPhillips

Mar 11, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, March 11, 2011 /PRNewswire/ -- Zacks Equity Research highlights: J.C. Penney's (NYSE: JCP) as the Bull of the Day and Gerdau S.A. (NYSE: GGB) as the Bear of the Day. In addition, Zacks Equity Research provides analysis ExxonMobil Corporation (NYSE: XOM), Chevron Corp. (NYSE: CVX) and ConocoPhillips (NYSE: COP).


Full analysis of all these stocks is available at

Here is a synopsis of all five stocks:

Bull of the Day:

J.C. Penney's (NYSE: JCP) well diversified supplier base, compelling merchandise, marketing campaigns, technological initiatives as well as effective cost and inventory management should drive sales and improve margin trends over the long term.

The company delivered better-than-expected fourth-quarter 2010 results. J.C. Penney's fourth-quarter 2010 sales grew 2.8%, whereas comps rose 4.5%. The company remains on track to deliver comps growth and boost market share. Comparable-store sales are expected to grow between 3% and 5% for first-quarter 2011.

The Sephora concept also inspires confidence and is expected to be a significant revenue driver. Management guided total sales growth in the low-single digit range and earnings between $2.00 and $2.10 for fiscal 2010.

Bear of the Day:

Gerdau S.A. (NYSE: GGB) is one of the leading low-cost steel producing companies. Despite this, there were negative sentiments for Gerdau as the company posted weak fourth quarter results, having been hurt primarily by higher raw material costs.

Moreover, foreign currency fluctuation, cyclicality of the industry and stiff competition pose threats for the company. Anticipating a lack of positive catalysts in the quarters ahead, we downgrade Gerdau to an Underperform recommendation.

Our $12.00 target price is based on 9.2X 2011 earnings per ADR. The stocks also carries a Zacks #5 Rank (Strong Sell).

Latest Posts on the Zacks Analyst Blog:

Exxon to Spend, Produce More

Oil giant ExxonMobil Corporation (NYSE: XOM) set its capital budget for 2011 at $34 billion, which represents a 5.6% increase from the 2010 level. The company also intends to invest $33 billion to $37 billion annually through 2015, significantly higher than its previous target range of $25 billion to $30 billion a year through 2014.

Exxon's increased capex guidance is suggestive of its intent to expand production level through its major projects. These include the oilsands venture in Canada, natural-gas in the U.S. and the Middle East, as well as oil exploration overseas. Notably, the company said that 80% of its forthcoming production is expected to be crude oil over the next five years.

Importantly, Exxon's total output will likely grow 3% to 4% in 2011 and 4% to 5% per year on an average through 2014. The growth will be fueled by 11 major upstream projects, which are scheduled to come online through 2013.

This year, Exxon expects to produce net 120,000 barrels of oil equivalent per day (Boe/d) from the project that were initiated in 2010. By 2016, the company estimates output from these projects to reach 1.4 million Boe/d.

Political unrest in the Middle East and North Africa has prompted oil companies to remain optimistic on a solid rebound in prices. Oil is currently trading at above $100 per barrel.

Accordingly, oil majors are boosting their capital plans primarily for their upstream segments. Exxon also expects global energy demand to grow 35% by 2030 from the 2005 level.

Exxon's major rival, Chevron Corp. (NYSE: CVX) expects to spend $26 billion primarily on exploration and production this year. Recently, ConocoPhillips (NYSE: COP) also disclosed its 2011 capex program of $13.5 billion, allocating 90% to the upstream segment.

Get the full analysis of all these stocks by going to

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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Mark Vickery



SOURCE Zacks Investment Research, Inc.