Zacks Bull and Bear of the Day Highlights: Mitsubishi UFJ Financial, Kirkland's, Comcast, Adobe Systems and General Mills
CHICAGO, July 16, 2012 /PRNewswire/ -- Zacks Equity Research highlights Mitsubishi UFJ Financial - ADS (NYSE:MTU) as the Bull of the Day and Kirkland's, Inc. (Nasdaq:KIRK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onComcast Corporation (Nasdaq:CMCSA), Adobe Systems Inc. (Nasdaq:ADBE) and General Mills Inc (NYSE:GIS).
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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 Mitsubishi UFJ Financial - ADS (NYSE:MTU) to Outperform based on the company's impressive earnings results for the fiscal year ended March 31, 2012. The company's net income increased 68% year over year. The growth was primarily aided by lower G&A expenses and a significant decline in consolidated credit costs.
Improved loans and deposits were also among the positives (reduced gross profits and net interest income were the headwinds). The company's strong business model, diversified product mix and lower credit costs are expected to support its bottom line going forward.
Our six-month target price of $5.50 per ADS equates to about 9.3x the Zacks Consensus Estimate for fiscal year 2013. This target price implies an expected total return of 12% over that period. This is consistent with our long-term Outperform recommendation on the ADSs.
Kirkland's, Inc.'s (Nasdaq:KIRK) first-quarter 2012 earnings of $0.10 per share missed prior-year earnings by 33.3% due to low comparable store sales across all its stores. Sales also missed the Zacks Consensus Estimate due to poor results of decorative accessories, wall decor and lamps.
Margins were hampered due to a high rate of inflation and fuel cost. The company lowered its profit and sales guidance for fiscal 2012. It also expects same-store sales to remain flat or decline in the coming quarters.
Although the company has undertaken some reformative measures like new marketing strategies and technological enhancements, we are concerned by the company's lack of exposure outside U.S. We maintain an Underperform rating on the stock.
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Comcast Enhances Service Portfolio
NBC Universal, a subsidiary ofComcast Corporation (Nasdaq:CMCSA) – the largest cable multiple-system operator (MSO) in the U.S. – recently launched an application on iPad, iPhone and Android devices, which will allow all viewers to watch the 2012 Olympics on their smartphones and tablets.
The customers with MSBC and CNBC network subscription will be able to watch the major events of the London Olympic 2012 live on their mobile devices after downloading the NBC Olympics and NBC Olympics Live applications.
The new application, which is developed by Adobe Systems Inc. (Nasdaq:ADBE), is also capable of capturing user interaction with the content and ads on the applications. Moreover, users can also set reminders for their favorite events, record them and watch later, and change the viewing options while watching events.
Live streaming of sports was not possible earlier but a higher proliferation of smartphones and tablets have induced many pay-TV operators to offer such applications to their subscribers which can easily be downloaded on mobile devices and facilitate easy viewing of different sporting events.
Though the availability of such applications will boost online subscriber growth, it will also reduce pay-TV subscriber growth, as most cable and satellite customers will give up the TV services for Internet services. Moreover, many U.S. prepaid and post-paid telecom service providers are offering unlimited data plans at competitive rates, which will further accelerate online subscriber growth.
So the best option available to the cable TV operators is to increase the data plan rates and further diversify its service product portfolio with innovative service plans.
Currently, we are maintaining our long-term Neutral recommendation on Comcast. Comcast has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
General Mills' Growth Plans
General Mills Inc (NYSE:GIS) has discussed its plans and growth strategies for fiscal 2013 in a meeting with its investors. The company plans to take the following steps for growth in fiscal 2013.
Innovation EuropeThrough an innovative approach to new and established brands, the company wants to cater to the increasing global demand for packaged food. Some of these innovations add more nutritional value to the packaged food with more fruits, vegetables and fiber and less fat content. The idea is to appeal to the growing numbers of health conscious customers that prefer the convenience of packaged food in a healthier way.
Global Expansion in developed and emerging markets
The U.S. market is mostly saturated, and to counter this, the company intends to expand in the emerging markets of China, Brazil, India, and Russia. The company plans to focus on its Haagen-Dazs and Nature Valley business in Brazil.
The acquisition of Yoki Alimentos, one of the leading food companies in Latin America, is expected to generate significant sales growth in the region, while strengthening the company's position in Brazil.
The number of middle class consumers with positive consumer spending is growing in these emerging markets and a majority of them are shifting to urban living. As a result, the demand for convenient and branded packaged food is on the rise, presenting good growth opportunity for the company.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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