For Immediate Release
Chicago, IL – May 13, 2010 – Zacks Equity Research highlights Dillard’s (DDS) as the Bull of the Day and Genzyme (GENZ) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Goldman Sachs Group Inc.(GS), Credit Suisse Group (CS) and Morgan Stanley (MS).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Dillard’s (DDS) is large departmental store chain, featuring fashion apparel and home furnishings. Management is undertaking restructuring initiatives and inventory reduction efforts to save costs and boost profitability, which augur well for future operating performance.
Moreover, the company has a strong balance sheet. And for the fourth quarter of 2009, the company reported strong results with earnings of $1.03 which outpaced the Zacks Consensus of $0.50.
Our long-term recommendation on Dillard’s is Outperform as we anticipate it to perform well above the broader market. However, intense competition from other established players and factors such as consumer preferences and spending patterns undermines the company’s future growth prospects and profitability.
Genzyme (GENZ) has been under a lot of pressure over the past few quarters following the temporary shutdown of its Allston manufacturing facility due to contamination problems.
While we are pleased to see that Genzyme is taking steps to emerge from the impact of the temporary shutdown of the Allston plant, we believe that the company may face additional challenges before it is able to go back to a normal production and supply schedule. Moreover, the FDA is looking to enforce a consent decree on the company which would result in Genzyme incurring additional costs.
With the company yet to emerge fully from its manufacturing issues, we are downgrading the stock to Underperform. Although Genzyme could receive some positive news in the form of FDA approval of Lumizyme, we expect investor focus to remain on the emerging pipeline, updates regarding the supply schedule of Cerezyme and Fabrazyme, the FDA’s enforcement action and updated guidance.
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Goldman Sachs: Earnings Scorecard
Goldman Sachs Group Inc.(GS) reported first quarter earnings of 2010 on Apr 20th that were significantly ahead of the Zacks Consensus Estimate, led by strong top-line growth though partially offset by higher-than-expected operating expenses. However, investors’ reactions on the better-than-expected results were quite tepid on the Wall Street due to the ongoing litigation issues that drained out the excitement.
Consequently, the stock has continued to fall since its earnings release. Below we will cover the results of the recent earnings announcement, subsequent analyst estimate revisions and Zacks ratings for the short term and long term outlook for the stock.
Earnings Report Review
It’s always encouraging to outperform estimates, particularly when the difference is substantial enough to gain optimism for a promising future. A quick look on the top-line reveals that while trading operations remained persistently strong, investment banking operations improved year-over-year. However, asset management services remained weak on the backdrop of a sluggish macro economic environment that resulted in significant money market outflows.
Goldman tops the industry by acquiring the leading position in the world-wide announced and completed M&A and public common stock offering year-to-date, putting behind it top rivals such as Credit Suisse Group (CS) (#2) and Morgan Stanley (MS) (#3). The company advised on a number of sizeable transactions during the first quarter of 2010.
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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