For Immediate Release
Chicago, IL – February 9, 2010 – Zacks Equity Research highlights OPNET Technologies (OPNT) as the Bull of the Day and Vulcan Materials (VMC) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Toyota Motor (TM), Xerox Corporation (XRX) and Urban Outfitters Inc.(URBN).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
We are extending our estimates through 2012 fiscal year for Buy-rated OPNET Technologies (OPNT). OPNET reported very good third quarter results due to strong new software license revenue.
Gross profit margins were well above expectations. We expect gains in market share to continue. Continued cost controls and the booking of deferred revenue should improve earnings.
Software license growth should have a positive impact on near-term revenue. We maintain our Outperform rating and increased our target price to $14.50.
Despite being the largest producer of construction aggregates and a leading producer of other construction materials, Vulcan Materials (VMC) faces a challenging environment in the construction industry.
The economic crisis, leading to a significant reduction in new home construction, continues to impact its sales volume. Furthermore, the company’s operations are highly susceptible to inclement weather and volatility in energy costs. Its cash position has also deteriorated.
These have led us to recommend shares of the company as Underperform. We set a target price of $40.
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Toyota Prius Faces Recall
Toyota Motor’s (TM) popular 2010 Prius hybrid automobile faces a recall, adding to the series of the automaker’s recalls in the past few months. Toyota will decide upon the magnitude of the recall this week.
In September last year, Toyota recalled the largest-ever U.S. batch of 3.8 million vehicles, triggered by a high-speed crash in August involving a 2009 Lexus ES350 that killed a California Highway Patrol officer and three members of his family near San Diego. Investigators with the National Highway Traffic Safety Administration have found out a rubber all-weather floor mat in the wreckage that was slightly longer than the mat and could have covered the accelerator pedal.
The September recall included the older version of Prius (2004-09) as well as the Toyota Camry (2007–10 model year), Toyota Avalon (2005–10), Toyota Tacoma (2005–10), Toyota Tundra (2007–10) and Lexus (2007–10 ES350 and 2006–10 IS250/350).
In January, Toyota decided to suspend sales of 8 models involved in another round of recalls of 2.3 million vehicles to correct sticking accelerator pedals on specific Toyota models that did not include the new 2010 Prius.
However, regulators in the U.S. started an investigation into the brakes of the 2010 Prius last week after drivers complained of being briefly unable to stop their cars on uneven surfaces. The Japanese government affirmed stating that it has received similar complaints about the braking system in Prius in Japan as well.
ACS, Xerox Merger Approved
Shareholders at ACS had approved its acquisition by Xerox Corporation (XRX). XRX shares are down slightly in trading Monday.
The transaction is expected to close soon and as a result, Standard & Poor’s announced changes to its index. S&P MidCap 400 constituent Urban Outfitters Inc.(URBN) will replace ACS in the S&P 500 index.
In September, Xerox agreed to acquire Affiliated in a cash and stock transaction valued at $6.4 billion ($63.11 per ACS share in cash and Xerox stock as of the closing price of Xerox on September 25). Affiliated shareholders would receive $18.60 per share in cash and 4.935 shares of Xerox.
Xerox would also assume $2 billion of ACS’s debt and would issue $300 million of convertible preferred stock to ACS’s shareholders. For this, Xerox issued about $2 billion in bonds last month, the net proceeds of which would support the ACS acquisition.
Xerox and ACS have already satisfied the Hart-Scott Rodino and Securities & Exchange Commission requirements for the merger. In addition, Xerox confirmed that pre-closing litigation-related issues have been resolved and that both parties intend to progress quickly to close the deal.
The company said that that the acquisition will enable Xerox to become the leading global enterprise for business process and document management and accelerate its growth in an expanding market. ACS will help Xerox expand its service offerings into payrolls, accounts payable, information technology outsourcing and other business and accounting functions.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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