For Immediate Release
Chicago, IL – October 18, 2010 – Zacks Equity Research highlights: CNOOC ADR (CEO) as the Bull of the Day and Companhia Paranaense de Energia, or COPEL (ELP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on General Electric Company (GE), Koninklijke Philips Electronics NV (PHG) and Siemens AG (SI).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506.
Here is a synopsis of all five stocks:
Our Outperform recommendation for CNOOC ADR (CEO) reflect the company’s solid balance sheet, premium assets portfolio, excellent execution strategy, unique position as a pure oil player and potential transactions in the merger and acquisition space.
While China is desperately searching for energy worldwide, CNOOC’s recent acquisition of Eagle Ford Shale acreages is appreciable. Though we believe that value for the transaction will not be reflected in the near term, long-term benefit is probable as the Eagle Ford region is liquid-rich and has potential exploration upside.
CNOOC has been active in balancing reserve and production growth. In addition, its strong cost-control measures will assist in maximizing shareholder value.
Based on higher productivity and lower cost of capital, ANEEL (Brazilian National Agency for Electric Utilities) proposed a tariff adjustment for Companhia Paranaense de Energia, or COPEL (ELP) of 9.74% on average, effective June 2010. This rule is essentially designed to regulate a monopolistic environment.
We are concerned about the political influence on COPEL’s affairs. The government of the State of Parana owns 58.6% of the company’s outstanding voting shares, which gives it the power to control the election of the majority of the company’s Board of Directors and appoint senior management.
Thus expecting any positive share driving catalysts, we downgrade our recommendation on the ADR to Underperform from Neutral. Our $22.00 target price is based on 11.1X 2010 earnings per ADR.
Latest Posts on the Zacks Analyst Blog:
GE Beats on Lower Revenue
General Electric Company (GE released its earnings results for third quarter of 2010 before the opening bell today, reporting earnings per share of 29 cents, beating the Zacks Consensus estimate of 27 cents. With a 32% year over year increase in its earnings, the company benefited from a continued improvement in its economic scenario.
Revenue
Though the company delivered a strong bottom-line result, the top-line figure declined by 5% to $35.9 billion, below Zacks Consensus estimate $37.7 billion. The company’s total revenue in the quarter continued to be negatively affected by weak equipment sales and reduction in GE Capital assets.
The quarter recorded growth in orders for equipments and also services, first time in eight quarters. Orders for equipments increased by 9%, including a 33% rise in Technology Infrastructure. The company received orders for 60 GE90 aircraft engines from Emirates, 142 Evolution Series locomotives for the North American market, and seven gas and two steam turbines for power supply from Saudi Electric Company.
In China and India, orders for Health Care products increased by 20%. Total Backlog of the company was flat at $172 million.
Outlook
The company expects its Industrial revenues in fourth quarter 2010 to expand sequentially and be flat in comparison with fourth quarter of 2009.
General Electric has one of the best infrastructure franchises worldwide with solid organic growth rates, exposure to favorable secular trends and a large installed base supporting a growing annuity-like service business.
Infrastructure businesses from GE provide products and services that help developing regions participate in the global economy while also helping developed regions upgrade with cleaner, more efficient and better infrastructure technologies. The financial business at GE offers an array of products and services aimed at enabling commercial businesses, consumers, and markets worldwide to build a stronger, financially secure future.
The company has adopted strategic imperatives to strengthen its portfolio by building strong growth platforms and generating cash from low-return businesses. Its focus remains on accelerating organic growth and achieving technical and service excellence, and building enduring customer relationships around the world.
However, the company faces significant headwinds, including reduced infrastructure spending globally, ongoing regulatory-driven challenges in the healthcare market, reduced advertising spending and increasing delinquencies and default rates in the financial businesses. Further, the company’s global growth is subject to economic and political risks pertaining to various operating geographies. Major competitors of General Electric are Koninklijke Philips Electronics NV (PHG) and Siemens AG (SI).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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CNOOC LTD ADR (CEO): Free Stock Analysis Report
COPEL-ADR PR B (ELP): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
KONINKLIJKE PHL (PHG): Free Stock Analysis Report
SIEMENS AG-ADR (SI): Free Stock Analysis Report
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