Zacks Bull and Bear of the Day Highlights: Superior Industries International, Tiffany, JPMorgan Chase, U.S.Bancorp and BB&T
CHICAGO, June 20, 2012 /PRNewswire/ -- Zacks Equity Research highlights Superior Industries International (NYSE:SUP) as the Bull of the Day and Tiffany & Company (NYSE:TIF) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onJPMorgan Chase & Co. (NYSE:JPM), U.S. Bancorp (NYSE:USB) and BB&T Corporation (NYSE:BBT).
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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:
Superior Industries International (NYSE:SUP) has a wide customer base. Its long-term business agreements with clients have helped maintain financial stability. The company is well positioned to take full advantage of the globally expanding automotive industry, given its competent management, strategic acquisitions, divestments and production efficiencies.
The company's EPS surpassed the Zacks Consensus Estimate by $0.06 per share in the first quarter of 2012. Therefore, considering all these factors, we continue with our Outperform recommendation on the shares of Superior Industries and set a target price of $20.00.
The current P/E, which is in the lowest quartile of the company's historical range, is at a 21% premium to the peer group for 2012. Our $20.00 target price, 18.2x our 2012 EPS estimate, reflects our Outperform recommendation.
We recently downgraded our recommendation on Tiffany & Company (NYSE:TIF) to Underperform following its first-quarter 2012 results. The quarterly earnings of $0.64 per share missed the Zacks Consensus Estimate of $0.69, and fell from $0.67 earned in the prior-year quarter, in spite of posting 8% growth in the top-line.
The disappointing bottom-line result was a reflection of murky performance in the Americas region due to soft demand for jewelry. Given the lower-than-expected results and sluggish economic recovery, management trimmed its fiscal 2012 sales and earnings outlook. Tiffany now anticipates 7% to 8% growth in total net sales, down from 10% predicted previously. Management now projects earnings in the range of $3.70 to $3.80 per share, down from $3.95 to $4.05 forecasted earlier.
The stock is also trading at a discount to the peer group, based on forward earnings estimates. Our target price of $48.00, 12.9X 2012 EPS, reflects our Underperform view.
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Bank Failures: 31 So Far in 2012
Bank failures continue unabated as the U.S. regulators closed down three more banks -- one each in Florida, Georgia and Tennessee. These closures have pushed the total number of bank failures to 31 so far in 2012, following 92 in 2011, 157 in 2010, 140 in 2009 and 25 in 2008.
While the financials of a few large banks continue to stabilize on the back of an economic recovery and increasing dependence on noninterest revenue sources, the industry is still on shaky ground. The sector presents a picture similar to that of 2011, with nagging issues like depressed home prices along with still-high loan defaults and unemployment levels troubling such institutions.
The lingering economic uncertainty and its effects also weigh on many banks. The need to absorb bad loans offered during the credit explosion has made these banks susceptible to severe problems.
The Failed Banks
- Palatka, Florida-based Putnam State Bank, with total assets of about $169.5 million and total deposits of $160.0 million as of March 31, 2012.
- Marietta, Georgia-based Security Exchange Bank, with about $151.0 million in total assets and $147.9 million in total deposits as of March 31, 2012.
- Lynchburg, Tennessee-based The Farmers Bank of Lynchburg, with about $163.9 million in total assets and $156.4 million in total deposits as of March 31, 2012.
The Acquirers
Indiantown, Florida-based Harbor Community Bank has agreed to assume all the deposits and assets of Putnam State Bank. The FDIC and the acquirer agreed to share losses on $112.3 million of Putnam State Bank's assets.
Atlanta, Georgia-based Fidelity Bank has agreed to assume all the deposits and assets of Security Exchange Bank. The FDIC and the acquirer agreed to share losses on $102.8 million of Security Exchange Bank's assets.
Knoxville, Tennessee-based Clayton Bank and Trust has agreed to assume all the deposits and assets of The Farmers Bank of Lynchburg. Clayton Bank and Trust will pay a 0.10% premium to assume all the deposits.
Consolidation to Continue
With so many bank failures, consolidation has become the industry trend. For most of the failed banks, the FDIC enters into a purchase agreement with healthy institutions.
When Washington Mutual collapsed in 2008 (the largest bank failure in the U.S. history), it was acquired by JPMorgan Chase & Co. (NYSE:JPM). Other major acquirers of failed institutions since 2008 include U.S. Bancorp (NYSE:USB) and BB&T Corporation (NYSE:BBT).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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