For Immediate Release
Chicago, IL – February 11, 2010 – Zacks Equity Research highlights Macy’s (M) as the Bull of the Day and QUALCOMM (QCOM) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Fannie Mae (FNM), Freddie Mac (FRE) and Bank of America (BAC).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Macy’s (M) is taking steps to increase sales, profitability and cash flow, which will put it on the growth trajectory once the economy rebounds. These include integration of operations, consolidation of divisions and customer-centric localization initiatives.
To help drive traffic, Macy’s continues to focus on price optimization, inventory management and merchandise planning. These helped the company post better-than-expected fourth-quarter sales performance with Macy’s improving its earnings guidance.
Although comparable-store sales remained under pressure, signs of improvement were apparent in the quarter. However, intense competition and higher debt-to-capitalization ratio remain concerns.
We reaffirm our Underperform recommendation for QUALCOMM (QCOM) following its first quarter of fiscal 2010 financial results. Although first quarter results broadly met the Zacks Consensus Estimates, the company reduced its previous guidance for full fiscal 2010.
Management cited increasing competition, slower recovery of high-end mobile phones in the developed markets, particularly in Europe and Japan; together with relative strength of the low-end mobile phones in the emerging markets are the primary reasons for this disappointing outlook.
Average revenue per MSM chipset declined as a result of lower ASP of 3G mobile phones. We expect this trend to continue in 2010 leaving little room for QUALCOMM’s top-line recovery.
Latest Posts on the Zacks Analyst Blog:
Bernanke on Exit Strategy
“All told, the Federal Reserve purchased $300 billion of Treasury securities and currently anticipates concluding purchases of $1.25 trillion of agency MBS and about $175 billion of agency debt securities at the end of March. The Federal Reserve’s purchases have had the effect of leaving the banking system in a highly liquid condition, with U.S. banks now holding more than $1.1 trillion of reserves with Federal Reserve Banks. A range of evidence suggests that these purchases and the associated creation of bank reserves have helped improve conditions in private credit markets and put downward pressure on longer-term private borrowing rates and spreads.”
The purchase of the Agency MBS has also been a huge prop to the housing market and the mortgage chain of companies, ranging from the agencies themselves — Fannie Mae (FNM) and Freddie Mac (FRE) — to the big originators and servicers of the residential mortgages like Bank of America (BAC).
“The FOMC anticipates that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. In due course, however, as the expansion matures the Federal Reserve will need to begin to tighten monetary conditions to prevent the development of inflationary pressures. The Federal Reserve has a number of tools that will enable it to firm the stance of policy at the appropriate time.”
See earlier comment about the capacity utilization levels and unemployment. Bernanke’s “in due course” does not give any real clue as to the timing of a monetary tightening. Eventually it has to happen, and the Fed Funds rate will not stay near zero forever, but forever is a long, long time.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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