For Immediate Release
Chicago, IL – August 20, 2010 – Zacks.com Analyst Blog features: Walgreen (WAG), CVS Caremark (CVS), Tata Motors Ltd. (TTM), Ford Motor Co. (F) and GameStop Corporation (GME ).
Here are highlights from Thursday’s Analyst Blog:
Walgreen Downgraded
We have downgraded Walgreen (WAG) to Underperform with a target price of $26.00.
Walgreen had reported an EPS of $0.47 during the third quarter of fiscal 2010, way below the Zacks Consensus Estimate of $0.57 and the year-ago quarter’s $0.53. Net sales increased 6.1% year over year to $17.2 billion, with same-store sales (those open for more than a year) increasing 0.7%. Front-end same-store sales increased 0.1% and were affected by a weak demand for discretionary goods and lower-than-anticipated sales of flu-related products.
After experiencing robust same-store sales growth rates of 7.7% and 8.1% in fiscal 2006 and 2007, respectively, total sales in same stores increased only 0.7% during the third quarter of fiscal 2010. However, we note that the situation at its primary competitor, CVS Caremark (CVS) is better. During the latest reported quarter, same-store sales increased 2.2% at CVS.
Tata Motors to Raise $700M
News has leaked that Indian auto giant, Tata Motors Ltd. (TTM), will raise $700 million by selling shares with differential voting rights. The automaker intends to utilize the funds to repay debt and expand its operations.
In June, the company’s board sought shareholders’ approval to raise funds equivalent to Rs.47 billion ($1 billion) through ordinary shares, ‘A’ ordinary shares, convertible bonds, debentures, warrants and other equity-linked instruments in either the domestic or the overseas markets. In a filing to exchanges at the beginning of this month, the company has revealed that it received the approval of shareholders to raise additional long-term resources.
Raising funds by issuing shares has become frequent with the company. In October last year, the company raised $750 million by selling global depositary shares and convertible notes in order to repay debt for acquiring Jaguar and Land Rover from Ford Motor Co. (F). It paid $2.3 billion to acquire the brands in March 2008. As of Jun 30, 2010, the company had a consolidated debt of Rs.199.8 billion ($4.3 billion).
GameStop Earnings Up but Misses
GameStop Corporation (GME ), the video game and entertainment software retailer, recently posted second-quarter 2010 results. The quarterly earnings of 26 cents a share missed the Zacks Consensus Estimate by a penny but rose 13% from 23 cents earned in the prior-year quarter.
The bottom-line growth was primarily driven by higher top-line and a decline in interest expenses (down 11%).
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CVS CAREMARK CP (CVS): Free Stock Analysis Report
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WALGREEN CO (WAG): Free Stock Analysis Report
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