For Immediate Release
Chicago, IL – August 21, 2009 – Zacks Equity Research highlights Expedia Inc. (EXPE) as the Bull of the Day and KeyCorp. (KEY) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Bank of America (BAC), Wells Fargo (WFC) and PNC Financial (PNC).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2676
Here is a synopsis of all five stocks:
Expedia Inc. (EXPE) is one of the leading online travel companies in the world. The company reported strong results in the last quarter, beating the consensus estimate. Although bookings continue to be impacted by the recession, management has taken promotional measures to improve the conversion rate.
We are also positive about international initiatives, which we think will be the key to future growth. Cost management, a favorable online advertising environment and solid financials are other encouraging factors. In comparison, the possibility of increased occupancy taxes and low growth in Egencia (the smallest segment) seem less significant.
However, the declining average daily rates could be something to watch. We are initiating coverage of EXPE shares with an OUTPERFORM rating.
KeyCorp.’s (KEY) second-quarter net loss came in at 69 cents per share, substantially worse than the Zacks Consensus Estimate. The downside primarily resulted from preferred dividend payment and a significant increase in the provision for loan losses.
Credit quality worsened significantly during the quarter. However, we are impressed by the company’s steps to reduce its exposure to the commercial real estate (CRE) home builders business.
Though the company will benefit by exiting its risky and unprofitable businesses, we expect elevated provision requirements and a weak net interest to put significant pressure on its profitability. As such, the shares carry and Underperform recommendation from us.
Latest Posts on the Zacks Analyst Blog:
Prime Loans Going Sour
The percentage of prime loans in foreclosure jumped to 3.00% at the end of the second quarter vs. 2.49% at the end of March. The percentage delinquent rose to 6.41% from 6.06% at the end of March.
On a percentage basis, subprime loans continue to be an absolute horror show. At the end of the quarter more than one in four (25.35%) subprime loans were delinquent (up from 24.95% at the end of the first quarter) and 15.05% were somewhere in the foreclosure process, up from 14.34% the quarter before.
Thus, the combined troubled mortgage rate is now over 40% on subprime loans. This is of course bad news for the banks with big mortgage operations like Bank of America (BAC), Wells Fargo (WFC) and PNC Financial (PNC).
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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