For Immediate Release
Chicago, IL – March 2, 2010 – Zacks Equity Research highlights BHP Billiton Limited (BHP) as the Bull of the Day and Ryder System, Inc. (R) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Macy’s (M), Darden Restaurants (DRI) and DISH Network Corp. (DISH).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
In response to global economic conditions, BHP Billiton Limited (BHP) has undertaken various actions, such as withdrawing from its pursuit of Rio Tinto, adjusting production levels in line with the demand and suspending cash negative operations.
BHP continues with its long-term strategy of investing in value-added projects. During fiscal year 2009, the company sanctioned four growth projects with a capital investment of $5.9 billion.
With its diversified portfolio of low cost and high quality assets and a strong balance sheet, BHP Billiton is well positioned to benefit from a market recovery. Thus, we upgrade the recommendation on the stock from Neutral to Outperform.
We are initiating coverage on Ryder System, Inc. (R) with an Underperform recommendation. The company’s fourth quarter earnings were a nickel short of the Zacks Consensus Estimate.
The decline was driven by decreased global results in full service lease, higher pension expense, reduced commercial rental performance and lower results from used vehicle sales. The company is planning for a better relative freight pricing market and more freight opportunities in 2010. Ryder also continues to actively evaluate its pipeline of acquisition candidates and consider share repurchase opportunities.
However, the company faces a prolonged freight recession on its lease business, which will compress earnings in the near future. Our target price is $32 per share.
Latest Posts on the Zacks Analyst Blog:
Savings Rate Falls as PCE Jumps
The decline in disposable personal income did not affect spending in January, though, as PCE accelerated to a 0.5% pace from 0.3%. Put in dollar (rather than percentage) terms, that is an increase of $52.4 billion, or almost twice the $26.4 billion increase in December.
It is good for the economy in general, and for retailers in particular, for spending to increase — at least in the short term. More spending means more shoppers at Macy’s (M) and more people eating at the Olive Garden, which is part of Darden Restaurants (DRI). However, if increases in spending are not matched with increases in income, it means that the savings rate has to fall.
The savings rate in the country is already FAR too low to be sustainable over the long term. As a result, we do not generate enough investment capital domestically, and we have to import it. This importation of capital is the flip side of the trade deficit — quite literally — since as a matter of accounting identity, the trade deficit has to be matched with a capital surplus.
This creates a major dilemma. A falling savings rate is good for the economy, but over time, a low savings rate is very bad for the country. Conversely, a rising savings rate slows the economy and a high savings rate is good for the economy. We have a very low savings rate (although somewhat better than it used to be)
DISH Network Delivers
DISH Network Corp. (DISH) declared fourth quarter 2009 financial results. Although the company’s fourth quarter earnings slipped 18% year-over-year on higher subscriber-related costs, they topped the Zacks Consensus Estimate.
The company reported earnings of $179 million or 40 cents per share, compared to $217 million or 48 cents in the year-ago quarter. Quarterly EPS of 40 cents was significantly above the Zacks Consensus Estimate of 33 cents.
Quarterly total revenue increased 1.4% to $2.96 billion, from $2.92 billion in the year-ago period. This was mainly due to an increase in subscriber related revenue. Quarterly total revenue was mostly in line with the Zacks Consensus Estimate.
DISH added 249,000 new subscribers during the quarter, which raised its total subscriber base to 14.1 million at the end of 2009. The growth in subscribers was driven by sales and marketing promotions as well as improved churn. The company’s churn rate reduced due to the recent completion of the security access device replacement program and an increased new subscriber commitment period.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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