Zacks Bull and Bear of the Day Highlights: ManpowerGroup, CSN, Sears Holdings, Wal-Mart Stores and Target
CHICAGO, April 26, 2012 /PRNewswire/ -- Zacks Equity Research highlights ManpowerGroup (NYSE: MAN) as the Bull of the Day and CSN (NYSE: SID) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sears Holdings Corporation (Nasdaq: SHLD),Wal-Mart Stores Inc. (NYSE: WMT) and Target Corporation (NYSE: TGT).
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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:
ManpowerGroup's (NYSE: MAN) first-quarter 2012 earnings of $0.50 per share beat the Zacks Consensus Estimate of $0.35, and grew 16.3% from the year-ago quarter on the back of revenue growth with Asia-Pacific Middle East segment portraying robust performance. Better expense control also provided cushion to the bottom-line.
Manpower also witnessed a surge in permanent recruitment business, and its workforce solutions business sustained its growth momentum. The demand for the counter-cyclical outplacement services portrayed signs of steadiness.
We believe that Manpower's brand value, comprehensive range of services and a strong global network provide a competitive advantage and reinforce its dominant position in the market. Our target price of $48.00, 16.3X 2012 EPS, reflects our Outperform recommendation on the shares.
Brazilian steel company Companhia Siderurgica Nacional, or CSN (NYSE: SID) posted satisfactory fourth quarter results with EPADR of roughly 31 cents per share, much above the Zacks Consensus Estimate of 20 cents per share. Despite a few positives, there are a few irrefutable downsides pertaining to the stock of the company at present.
These downsides include rising costs of goods sold, presence of serious competition and foreign market fluctuations, which are adversely affecting sales of the company in the clouded fiscal scenario. Earnings estimates for 2012 have decreased on a year over year basis.
Thus, we are downgrading shares to an Underperform recommendation from a previous sideline view on the stock at present. Our target price on the stock is $8.50, based on a 2012 P/E multiple of 8.6x.
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Sears Sells Off More Pieces
Sears Canada Inc., a unit of Sears Holdings Corporation (Nasdaq: SHLD), continues to liquidate its assets in line with its strategy of divesting assets to boost its cash and overall financial position. Sears Canada announced that it has entered into a deal with Nationwide Marketing Group LLC to sell its interest in Cantrex Group operations.
Cantrex facilitates Sears to develop its merchandising, buying and logistics services in the furniture and appliance sectors. The company expects to complete the deal by the end of April.
However, Sears Canada indicated that it will retain its ownership interest in Corbeil Electrique Inc., which was acquired as a part of the Cantrex acquisition in 2005. Corbeil is a well known brand in the appliance retail market. Looking into 2012, Sears Canada has plans in place to spread its Corbeil brand to the Greater Toronto area.
As per Sears, Cantrex will continue to carry out its administrative operations in the Sears Canada's logistics center located in Montreal (QC). Moreover, Sears Canada and Cantrex will jointly share the facilities at Vaughan (ON) and Vancouver (BC).
Earlier this week, Sears Canada had closed a deal to return its three stores in Canada to the real estate developer and landlord, The Cadillac Fairview Corporation Limited, for a pretax gain of $170 million. The three Sears stores are located at the Rideau Centre in Ottawa, Chinook Centre in suburban Calgary and the Pacific Centre in downtown Vancouver. These are all owned and managed by Cadillac Fairview. As per the deal, Sears will vacate these places by October 31, 2012.
Prior to this, on April 17, 2012, Sears Holdings closed the sale of its 11 full line stores to General Growth Properties for a sum of $270 million. The 11 Sears stores located in Florida, Hawaii, Illinois, Iowa, Minnesota, Oklahoma, Texas, Utah and Washington were sold as part of the company's announcement in December 2011.
Grappling with weak top- and bottom-line performance, Sears Holdings had announced shuttering of 100 to 120 Kmart and Sears full-line stores in December 2011 to trim down costs and produce cash. Further, the company expects to produce $140 to $170 million of cash from store closures through inventory clearance.
The crux of the matter is Sears is trying hard to optimize its financial performance through a string of measures for enhancing its growth prospects. The company's focus is now on improving its structure by dipping investment in sections of the company that no longer contributes significantly to its growth.
Apart from this, the company will focus on cost containment, inventory management, and merchandise initiatives to improve margins through leverage on buying and occupancy expenses.
Sears Holdings, which competes with Wal-Mart Stores Inc. (NYSE: WMT) and Target Corporation (NYSE: TGT), currently retains a long-term Underperform recommendation. The company has a Zacks #3 Rank, implying a short-term Hold rating.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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