For Immediate Release
Chicago, IL – November 3, 2009 – Zacks Equity Research highlights Apple, Inc.(AAPL) as the Bull of the Day and Sohu.com (SOHU) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Loews Corporation (L), CNA Financial Corporation (CNA) and Diamond Offshore Drilling Inc. (DO).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Apple, Inc.(AAPL) has experienced tremendous growth, driven by the success of its iPhone and increased Mac shipments. The company reported strong fiscal 2009 results with higher revenue (12.5% year over year) and earnings (17.4% year over year) growth despite the recession. The results beat the Zacks Consensus Estimate and the company’s own guidance.
The company is currently benefiting from a positive mix shift to the higher-margin iPhone/iPod business from its traditional MP3 players. The Macintosh product continues to gain market share, with significant gains in portables, music players and smart phones.
Year-to-date, Apple share prices have more than doubled. Apple’s valuation premium is justified, given the company’s positive attributes and leaves room for further upside from the current levels. We have increased estimates for full-year 2010 and upgrade the stock to Outperform. We set a six-month price target of $225.
While Sohu.com’s (SOHU) third-quarter earnings beat the Zacks Consensus Estimate and were in line with the company’s own guidance, the outlook for the fourth quarter was far below expectations. The company’s operating expenses have been steadily going up, which we fear could limit the growth in earnings.
Moreover, recent delays in game launches, weak ad spending — which is hurting the brand advertising revenue — and intense competition pose a threat. However, strength in its online games and portal business are expected to be the strongest drivers for growth beyond 2010.
Currently, we see limited upside for Sohu’s revenue and earnings growth in the near term. We downgrade the stock to Underperform from our previous Neutral rating and set a six-month price target of $45.00.
Latest Posts on the Zacks Analyst Blog:
Loews Corp. Records Profit
Loews Corporation’s (L) third quarter income from continuing operations came in at $1.08 per share compared to a loss of 33 cents in the year-ago quarter. Results primarily reflected a 26% year-over-year increase in revenues.
The improved results were driven by increased investment income and a considerable reduction in investment losses at CNA Financial Corporation (CNA) and strong results at Diamond Offshore Drilling Inc. (DO). Also, the results reflect a strong rebound in investment income, primarily from improved limited partnership results.
CNA Financial Corporation’s operating income increased to $304 million from $76 million in the prior-year period. Diamond Offshore experienced a strong quarter with $170 million of earnings, up 17% year-over-year.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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