For Immediate Release
Chicago, IL –August 23, 2010 – Zacks Equity Research highlights: Energizer Holdings’ (ENR) as the Bull of the Day and CRA International (CRA) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Moody’s Corporation (MCO), Potash Corporation of Saskatchewan (POT) and BHP Billiton Limited (BHP).
Here is a synopsis of all five stocks:
Energizer Holdings’ (ENR) third quarter 2010 earnings beat the Zacks Consensus Estimate by $0.39 per share or 41%, riding on higher sales, launch of new Schick Hydro, meaningful cost-saving initiatives, favorable foreign currency impact, higher battery sales and lower-than-expected A&P spending.
We expect Energizer s top line to grow modestly (+4%) in the fourth quarter of 2010 along with an improved operating leverage and organic growth going forward. The new Schick Hydro brand, higher margins, share repurchases and improving condition in its battery business along with a huge third quarter upside in earnings have led us to raise our earnings per share estimates by 7.4% for fiscal 2011.
However, investors should note that intense competition, inventory destocking and weak consumer environment are potential negatives. We believe that ENR is set for a stronger growth in 2011. With cheap valuation, we upgrade the stock to Outperform and raise our price target to $77.00.
CRA International (CRA) second-quarter earnings were modestly ahead of the Zacks Consensus Estimate primarily owing to the uptick in utilization rate backed by successful restructuring actions.
Although litigation and management consulting related areas were reasonably active, clients cautious aggregate spending and a decline in organic revenue are expected to limit the company s growth. Overall, near-term visibility remains unclear, given the current volatile market trends.
Despite showing some improvement, litigation trend remains sluggish. Finally, despite the recent pick-up in activity, the Middle East business remains uncertain. Going forward, we remain skeptical about the sustainability of the growth momentum seen in the second quarter. Hence, we downgrade the stock from Neutral to Underperform.
Latest Posts on the Zacks Analyst Blog:
Moody’s React to Fertilizer Buzz
Ratings agency Moody’s Investors Service, an affiliate of Moody’s Corporation (MCO) has recently confirmed its ‘Baa1’ senior secured ratings on Potash Corporation of Saskatchewan (POT) and downgraded its outlook to “Developing” from “Stable”, stated Reuters. Moody’s ‘Baa’ rating is a medium grade rating that indicates moderate credit risk. The ratings change came in just after the fertilizer company rebuffed a hostile acquisition offer from Australian mining giant BHP Billiton Limited (BHP). We believe the rating agency’s major concern is the uncertain offer price.
On Aug 15, 2010, Potash Corp turned down BHP’s $38.6 billion (all in cash) offer citing that the offer grossly undervalues the company and its future growth prospects. Potash Corp. stated that at $130 per share, BHP Billiton’s acquisition proposal reflects a modest premium of 16% on the stock’s closing price of $112.15 as on August 16, 2010. Furthermore, the premium offered is inferior to the average control premiums offered globally and in Canada.
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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BHP BILLITN LTD (BHP): Free Stock Analysis Report
CELERA CORP (CRA): Free Stock Analysis Report
ENERGIZER HLDGS (ENR): Free Stock Analysis Report
MOODYS CORP (MCO): Free Stock Analysis Report
POTASH SASK (POT): Free Stock Analysis Report
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