Zacks Bull and Bear of the Day Highlights: Rogers Communications, Superior Industries International, Dell, salesforce.com and Hewlett-Packard
CHICAGO, Oct. 5, 2012 /PRNewswire/ -- Zacks Equity Research highlights Rogers Communications, Inc. (NYSE:RCI) as the Bull of the Day and Superior Industries International (NYSE:SUP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Dell Inc. (Nasdaq:DELL), salesforce.com (NYSE:CRM) and Hewlett-Packard Company (NYSE:HPQ).
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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 Rogers Communications, Inc. (NYSE:RCI) to Outperform based on its current valuation, which is trading at significantly low multiples compared to the industry average and the S&P 500, with respect to several valuation metrics. We believe massive expansion of LTE networks and an attractive dividend yield will also boost the stock price in the near future.
As of now, Rogers expanded its super-fast LTE network to 60% of Canada. Management has aimed to achieve a 100% foothold in the country by the end of 2013. Deployment of LTE network has resulted in a 80% year-over-year increase of Internet usage by its subscribers.
Growing demand for mobile data and huge activation numbers of the latest smartphones will pave the way for Rogers' future growth. The strategic decision taken by management to diversify in the mobile banking segment will also open up an additional revenue stream for the company.
Superior Industries International (NYSE:SUP) faces significant customer concentration risks, as the Detroit Big Three represent about 75% of its sales. Further, unfavorable product mix and a weak Mexican peso continue to mar the company's results.
In the most recent quarter, the company has disappointed by posting a significant 56.5% fall in profits to $6.4 million and missed the Zacks Consensus Estimate by $0.06 per share. Further, its revenues of $215.1 million were also lower than the Zacks Consensus Estimate of $222.0 million.
As such, we have downgraded our recommendation on the company's shares from Outperform to Underperform and set a target price of $17.00. Our long-term recommendation on the stock indicates that it would perform below the overall market, and our target price -- 18.5x our 2012 EPS estimate -- reflects this view.
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Dell's Solution for Western Express
Dell Inc. (Nasdaq:DELL) has been selected by Western Express to provide a cloud-based CRM solution, collaborating applications of salesforce.com (NYSE:CRM) and Dell Boomi. The combined technology from Dell and Salesforce will improve the visibility into its customer needs and better align its sales and operations.
Western Express operates in a highly competitive business environment, so profitability is dependent on the efficient delivery of services to minimize costs without sacrificing the reliability of services. Companies also need to use customer information wisely, which is where the CRM solution from Salesforce and Dell is expected to come in handy.
The ongoing uncertainty in the PC market has led Hewlett-Packard Company (NYSE:HPQ) and Dell to shift their focus to the high-margin enterprise solutions and cloud computing markets.
According to industry experts, customers have withheld PC purchases ahead of the Win 8 launch and hence believe that new launches could charge up the gloomy PC market. However, it will be hard to predict any clear winner as all the key players appear to be playing their cards right.
All this notwithstanding, it is a fact that notebooks are being cannibalized by tablets and while Dell will soon be launching a few Ultrabooks, it does not have a tablet business to speak of. With consumers remaining cautious, sales are likely to remain below typical seasonal levels despite drivers like Win 8 and Ultrabooks.
We therefore have a Zacks #5 Rank on Dell shares, implying Strong Sell rating for the next 1-3 months.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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