For Immediate Release
Chicago, IL – February 19, 2010 – Zacks Equity Research highlights Chipotle Mexican Grill (CMG) as the Bull of the Day and Nucor Corporation (NUE) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Hewlett-Packard (HPQ), Wal-Mart Stores Inc. (WMT) and Chesapeake Energy Corporation (CHK).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Chipotle Mexican Grill (CMG) has remained largely unruffled by the recent economic slowdown. The company is well-positioned to expand rapidly while generating improved earnings, margins and returns on invested capital.
With a strong balance sheet, consistent earnings and healthy cash flow, we think the stock provides relative safety and consistent growth. The company’s results have been stable relative to many of its peers, with same-store sales that appear to have held up over time.
Moreover, the company’s Food With Integrity program provides a significant competitive advantage in the fast-casual segment. As such, we have an Outperform recommendation on the stock.
Nucor Corporation (NUE), the nation’s largest recycler of steel scrap, is suffering from continued low operating rates and high-cost pig iron inventories. Moreover, a slowdown in demand from the automobile sector and increased production in China are matters of concern.
Long-term contracts, cost reduction efforts and a dominant acquisition strategy could be positives in the company’s performance in the coming quarters. Nucor’s strong balance sheet positions the company well for the long term, but the near-term headwinds in the end-markets are likely to make it difficult for the stock to outperform.
As such, we downgrade Nucor to Underperform from our previous Neutral recommendation.
Latest Posts on the Zacks Analyst Blog:
Hewlett-Packard Delivers
Hewlett-Packard (HPQ) reported first quarter EPS of $1.10, exceeding the Zacks Consensus estimate by 4 cents.
Revenue for the quarter came in at $31.2 billion, an increase of 8.0% from the $28.8 billion reported in the year-ago period and up 5.0% on a currency adjusted basis. Revenue increased across all businesses excluding services, which declined 1.0% on a year-over-year basis.
The Americas reported a 9.0% increase in revenue to $13.6 billion. Revenue increased 1.0% in Europe, the Middle East and Africa (EMEA) to $12.1 billion and 26.0% in Asia-Pacific to $5.4 billion. International markets accounted for 65% of total revenue in the first quarter, with revenue in the BRIC countries (Brazil, Russia, India and China) increasing 41.0% on a year-over-year basis and accounting for 10.0% of total H-P revenue.
WMT: Strong Earnings, Weak Outlook
Wal-Mart Stores Inc. (WMT) reported better-than-expected fourth-quarter 2010 results, but provided a tepid outlook for the coming quarter. The retailing giant reported adjusted quarterly earnings of $1.17 per share, beating the Zacks Consensus estimate of $1.12 per share.
Management had guided towards an EPS range of $1.08 to $1.12 per share in November last year. The company had earned $1.03 per share in the year-ago period. The guided range for the first quarter 2010 earnings is towards the lower end of current expectations.
Wal-Mart’s net sales recorded growth of 4.6% to $112.8 billion from $107.9 billion in the year-ago quarter. The expansion was primarily driven by a robust 19.5% expansion in the International segment, which was benefited by favorable currency translations, coupled with a 3.8% growth in the Sam’s Club segment. However, overall top-line growth was partially offset by 0.5% decline in Wal-Mart’s U.S. segment.
Chesapeake Beats on Volumes
Chesapeake Energy Corporation (CHK) reported better-than-expected fourth quarter results driven by strong production volumes and reduced costs. Quarterly earnings were 77 cents per share, compared to the Zacks Consensus Estimate of 69 cents and year-earlier quarter earnings of 75 cents. Before adjusting for one-time items, its loss per share was 84 cents.
With improving production numbers, we see a positive trend in estimate revisions. For the last 30 days, 9 of the 29 analysts covering the stock raised estimates for fiscal 2010 while 3 analysts moved in the opposite direction. No up or downside movements occurred in the last 7 days.
Currently, the Zacks Consensus Estimate for fiscal 2010 earnings is $2.56 per share, which is a penny above fiscal 2009 earnings.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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