Zacks Bull and Bear of the Day Highlights: Manulife Financial, China Petroleum & Chemical, Verizon Communications, Vodafone Group plc and AT&T
CHICAGO, May 8, 2012 /PRNewswire/ -- Zacks Equity Research highlights: Manulife Financial Corp. (NYSE: MFC) as the Bull of the Day and China Petroleum & Chemical (NYSE: SNP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Verizon Communications Inc. (NYSE: VZ), Vodafone Group plc. (Nasdaq: VOD) and AT&T Inc. (NYSE: T).
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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 the shares of Manulife Financial Corp. (NYSE: MFC) following strong first-quarter results. The company reported operating earnings of $1.13 billion, higher than $871 million in the prior-year quarter. Manulife has achieved a great deal in reducing potential equity markets and interest rates risk exposures, along with minimizing existing risks.
We also remain impressed with the company's significant progress made in diversifying its businesses, achieving growth in targeted areas and cultivating new revenue streams. Our six-month target price of $16.00 equates to about 50.0x our earnings estimate for 2012.
We view the $0.52 per common share annual dividend as secure, implying an expected total return of about 24% over the next six months. This is consistent with our Outperform recommendation on the shares.
We are maintaining our Underperform recommendation on Sinopec - ADS, aka China Petroleum & Chemical (NYSE: SNP) following its first quarter 2012 results. The company's quarterly profit registered a 35.2% decline, owing to slower domestic economic growth.
Moreover, increases in the price of international crude oil amidst government caps on fuel prices, prevented the company from fully passing on spiraling costs to consumers, thereby hurting refining margins.
The company's weak guidance for this year also leads us to recommend caution. We believe that Sinopec's matured domestic oil fields and associated rising costs will continue to be an overhang on its operations as natural declines become pricier to counterbalance. Other risk factors, such as technological failure and geo-political disturbance, also add to our negative sentiment.
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LTE Thriving in North America
The recent data on LTE subscriptions in the U.S. and Canada proves that with the increasing adaption of LTE 4G technologies, the mobile industry in North America is about to enter into a new era. The data as published by 4G Americas indicates that the U.S. and Canada has almost two-thirds of the world's LTE subscriptions.
As per the data provided by Informa Telecoms and Media, North America had 10.8 million LTE subscribers in the month of March. Among them, 10.5 million subscribers were from the U.S. and the remaining 300,000 were from Canada. There are eight carriers in the U.S and three in Canada that provide Commercial LTE services.
The increasing demand of LTE services is due to its advantages over other 4G technologies like WiMAX, Ultra mobile Broadband and Multi-input Multi-output (MIMO) wireless LAN. LTE offers advantages like spectral efficiencies, lower costs and superior integration ability with other open wireless standards.
LTE provides upload and download rates of 100Mbit/s and 50Mbit/s respectively with RAN (radio access network) round-trip times of less than 10ms. Ability to expand capacity and increase speed are the prime reasons for its wide acceptability within the wireless segment.
According to Juniper research, subscriber base could reach 428 million in the next five years due to rapid uptake of LTE mobile broadband technology. Initially they expect LTE adaptation to be dominated by enterprise subscribers but also believe that retail consumer will overtake them by 2015. We believe that LTE service will attract enterprise customers due to its improved data speeds and service guarantee offerings, and improve consumer demand with the emergence of LTE enabled devices.
To support the growing demand of LTE services, telecom carriers like Verizon Wireless, which is a joint venture between Verizon Communications Inc. (NYSE: VZ) and Vodafone Group plc. (Nasdaq: VOD), have expanded their reach across 230 markets in the U.S. and have vowed to expand their reach to 400 markets by the end of the year.
Verizon is ahead of its rival AT&T Inc. (NYSE: T), which has an LTE presence in 30 U.S. markets, but the latter has also started to ramp up its network coverage. This implies that going forward, LTE possesses the biggest opportunities for carriers.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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