Zacks Bull and Bear of the Day Highlights: St. Joe, Tiffany, Covidien, Conmed and Johnson & Johnson
CHICAGO, Dec. 6, 2012 /PRNewswire/ -- Zacks Equity Research highlights The St. Joe Company (NYSE:JOE) as the Bull of the Day and Tiffany & Co. (NYSE:TIF) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Covidien plc. (NYSE:COV), Conmed Corporation (Nasdaq:CNMD) and Johnson & Johnson's (NYSE:JNJ).
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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:
The St. Joe Company (NYSE:JOE) reported strong third quarter 2012 results with a healthy year-over-year increase in revenue and EPS, with the latter exceeding the Zacks Consensus Estimate by $0.18. St. Joe is one of the largest real estate developers in Florida.
The company is presently focusing on developing the adjacent area of the Panama-City Bay County Airport, which was opened in late 2010, to increase the future value of its holdings. However, St. Joe's business is primarily concentrated in Florida, which was one of the hardest hit states in the recession and had adversely affected its bottom line in the recent past, thereby undermining the future growth potential to some extent.
Our long-term Outperform recommendation on the stock indicates that it would perform well above the broader market. Our target price of $27.00, 158.8X 2012 EPS, factors in this view.
We recently downgraded our recommendation on Tiffany & Co. (NYSE:TIF) to Underperform following its lower-than-expected third-quarter 2012 results. The quarterly earnings of $0.49 per share missed the Zacks Consensus Estimate of $0.63, and dropped sharply from $0.70 earned in the prior-year quarter.
The disappointing result was due to shriveled gross margin and higher tax rate, apart from difficult year-over-year comparisons. Net sales of $852.7 million also fell short of the Zacks Consensus Estimate of $858 million. Given the weaker-than-expected results and sluggish economic recovery in most of the countries, management trimmed its fiscal 2012 outlook.
Tiffany expects total net sales growth of 5% to 6% for fiscal 2012, down from 6% to 7% predicted previously. Operating margin for the fiscal year is also expected to contract. Moreover, gross margin in the fourth quarter is expected to be lower than the prior-year quarter.
Latest Posts on the Zacks Analyst Blog:
Covidien Boosts Sports Surgery Line
Covidien plc. (NYSE:COV), a large-cap medical technology company, recently introduced the AS Meniscal Repair Device intended to repair torn meniscus in the knee. This latest offering from the company's sports surgery product line further expands its minimally invasive arthroscopic surgical offerings.
The device's uniqueness lies in the fact that it employs an "all-inside" technique along with the "all-suture" approach, which is considered to be the gold standard for meniscal repair. This reduces operating room time as well as enhances patient outcome.
Covidien's Bench-top tests further confirm that the AS Meniscal Repair Device delivers outstanding holding power in comparison with other leading competitive devices. Thus, the device helps achieve better clinical efficiency.
As per the Millennium Research Group survey more than 840,000 meniscus repair surgeries were performed in the U.S. alone. The research further predicted that fixation devices for such procedures are likely to grow at an 8% compound annual growth rate (CAGR) through 2015.
However, Covidien is likely to face competition from companies such as Conmed Corporation (Nasdaq:CNMD) and Johnson & Johnson's (NYSE:JNJ) Depuy, which sell similar products in the market.
Moreover, the company remains exposed to pricing as well as utilization headwinds. We remain concerned about the tepid U.S. health services industry and the soft European economy, which has led to fluctuating share prices.
Covidien is a leading developer, manufacturer and distributor of medical devices and services on a global scale, with a market capitalization of $27.25 billion. The company is adequately placed to achieve its long-term revenue and earnings growth targets based on its attractive fundamentals, strategic acquisitions, effective execution, new product cycle and expansion into emerging markets.
We currently have a 'Neutral' recommendation on Covidien, which carries a short-term Zacks #2 Rank (Buy rating).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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