For Immediate Release
Chicago, IL – April 9, 2010 – Zacks Equity Research highlights Del Monte (DLM) as the Bull of the Day and CenturyTel (CTL) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Nordstrom (JWN), TJX Companies (TJX) and Kroger (KR).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Del Monte’s (DLM) long-term objectives are to achieve earnings growth in the range of 7% to 9% and topline growth in the range of 3% to 5%. However, the guidance for both earnings and revenues growth for fiscal 2010 exceed the long-term range, and are now expected to increase by approximately 15% and 4% to 6%, respectively.
Price increases implemented across the product portfolio helped Del Monte post strong profits during the third quarter of fiscal 2010. Del Monte has been able to boost sales through continued emphasis on product and packaging innovation.
We maintain our Outperform rating on the shares of Del Monte. Our target price is $17.00 or 13.9X 2010 EPS estimates, and shares of DLM currently have a Zacks #1 Rank.
We downgrade our recommendation for CenturyTel (CTL), a leading rural telecom carrier, to Underperform based on management’s tepid outlook. Earnings for the last quarter beat the Zacks Consensus Estimate driven by the contributions from the Embarq Corp acquired in July 2009.
Although CenturyTel continues to grow its broadband customer base and associated revenue, the company remains significantly challenged by the declines across voice and network access operations. Moreover, the carrier has provided a pessimistic outlook for 2010.
Operating results are expected to be restricted by sustained erosion in access lines coupled with lower access revenue. We also remain concerned about the integrated company’s high debt level.
Latest Posts on the Zacks Analyst Blog:
Initial Jobless Claims Bounce Higher
It looks like we might be starting to follow the pattern of the previous two recoveries, where after an sharp initial decline, the level of initial jobless claims was stuck on a high plateau that lasted well over a year. That would be very bad news, as it would signal a long period of a “jobless recovery.”
While retail sales have picked up recently, as shown by the much-better-than-expected numbers coming out of almost all of the major chain stores today, ranging from high-end retailers like Nordstrom (JWN) to discounters like TJX Companies (TJX). However, without jobs and growing incomes, it will be very hard to sustain that momentum.
If people have no income at all, then the only way they can survive is to draw down savings or run up their credit cards. Most people who have been laid off were living paycheck to paycheck…while they still had paychecks. High-school drop outs, or even people with only a high school diploma generally don’t earn enough to put a lot aside for a rainy day. In May, the unemployment rate for dropouts was 14.5%, and for high school grads who never went to college it was 10.8%.
Most of the meager savings done in this country is done by those with college educations, and their unemployment rate was only 4.9%. After rising sharply in later 2008 and early 2009, the overall savings rate has fallen sharply. That has helped to jump-start the economy, but is very bad long term.
With no income, savings depleted and credit cards maxed out, these people would not be able to pay their electric bills, their mortgage or rent. They would not be able to go to Kroger’s (KR) to buy food, and would have to rely on the already very over-stretched food banks. They would be homeless, and there would be more empty homes and apartments, putting further downward pressure on rents and housing prices.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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