For Immediate Release
Chicago, IL – January 8, 2010 – Zacks Equity Research highlights Best Buy (BBY) as the Bull of the Day and Regency Centers (REG) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Costco Wholesale Corporation (COST), BJ’s Wholesale Club Inc. (BJ) and Wal-Mart Stores Inc. (WMT).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
The dominant position in the consumer electronic business enables Best Buy (BBY) to sustain growth in its topline, expand its store base and boost its market share through acquisitions.
The stores tailor their store merchandising, staffing, marketing and presentation to meet the distinct needs of targeted customers. The company’s wide array of assortments, store formats and brand marketing strategies provides an edge over competitors.
These helped Best Buy to post better-than-expected third-quarter 2010 results. The quarterly earnings of $0.53 per share surpassed the Zacks Consensus Estimate of $0.43 and surged 51.4% year-over-year. We recommend BBY shares as Outperform with a 6-month target price of $45.00 per share.
We are changing our long-term recommendation for Regency Centers (REG) to Underperform as we anticipate it to perform well below the broader market. The prolonged recession has led to increased tenant bankruptcies, which in turn have led to a decline in occupancy and an increase in vacancy rates.
In addition, consumer discretionary spending continues to be under severe stress with a reduction in disposable income. However, Regency is one of the largest retail-strip format REITs in the U.S. with properties in high income, high-barrier markets that are tenanted by leading national and regional retailers.
If the company can tide over the storm, it can expect a reversal of fortunes in the future. For now, we have a 6-month target price of $30.00 per share.
Latest Posts on the Zacks Analyst Blog:
Costco Comp Store Sales Up 9%
Costco Wholesale Corporation (COST), one of the leading U.S. warehouse club operators, reported December sales of $8.26 billion, up 11% from $7.41 billion in the year-ago period.
Total comparable store sales for the 5-week period ended January 3 were up 9%. Costco posted a 5% comparable store growth in the U.S. and 25% in the International markets. This included a positive impact of rising gasoline prices and a weaker U.S. dollar.
Excluding the above effects, Costco’s comparable store sales in the reported period were up 4%, with 2% growth in the U.S. and 10% growth in the International markets.
For the 18-week period ended January 3, Costco reported net sales of $26.83 billion, reflecting a year-over-year growth of 8%. Comparable store sales were up 5%, with the company posting 2% growth in the U.S. and 17% growth in its international operations.
Excluding the impact of foreign currency translation and gasoline prices, the 18-week period comparable store sales were up 3%. U.S. markets saw growth of 2%, while international market growth was 8%.
Costco currently operates 566 warehouses, including 413 in the United States and Puerto Rico, 77 in Canada, 32 in Mexico, 21 in the United Kingdom, 9 in Japan, 7 in Korea, 6 in Taiwan and 1 in Australia. Over the past few years, the company has been focusing on increasing its presence in the existing markets through continuous investments in new club openings.
Costco faces stiff competition from BJ’s Wholesale Club Inc. (BJ) and Sam’s Club, a division of Wal-Mart Stores Inc. (WMT).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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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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