For Immediate Release
Chicago, IL – November 24, 2009 – Zacks Equity Research highlights Petrobras (PBR) as the Bull of the Day and St. Jude Medical (STJ) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Motorola Inc.(MOT), Sprint Nextel Corp.(S) and Alcatel-Lucent (ALU).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Petrobras (PBR), the largest integrated energy firm in Brazil, stands to benefit from its country’s economic growth and huge pre-salt oil reserves. The company recently reported a better-than-expected third-quarter, helped by strong downstream results that more than offset the sharp decline in commodity prices.
Near- to medium-term concerns include the uncertain commodity-price scenario, significant capital investment requirements, and Brazil’s proposed new oil and gas regulatory framework. However, given its strong pipeline of development projects and impressive recent exploration successes, the company’s long-term outlook looks compelling.
As such, we recommend an Outperform rating for Petrobras ADRs. Our six-month target price is $55 per share.
We look for global demographic trends — aging populations in developed nations and the rapid urbanization of developing countries — to fuel long-term growth of St. Jude Medical (STJ). These trends give rise to growing demand for cardiovascular health care.
However, recent weaknesses in the CRM segment, particularly in the U.S., are headwinds for St. Jude in the near-term. This might force the company to lose market share to its competitors.
Earnings per share in the third quarter reached $0.59, beating the Zacks Consensus Estimate by one cent. However, we have chosen to downgrade the stock to an Underperform with a target price of $31.
Latest Posts on the Zacks Analyst Blog:
Motorola Boosts iDEN Business
Motorola Inc.(MOT) has decided to purchase iDEN base station assets of the privately held RadioFrame Networks Inc. The iDEN (Integrated Digital Enhanced Network) technology allows cell phone calls to move on the same network as communication from two-way radios. In general, this technology resembles walkie-talkie features on cell phones. Financial terms of this deal have not been disclosed so far. Motorola itself is the pioneer of the iDEN technology that RadioFrame had licensed for its base station products.
The main reason for this acquisition is the superior iDEN-based base station products of RadioFrame that are lower cost and more power efficient. This proposed acquisition will enhance Motorola’s portfolio of multi-channel base stations products that are optimized to support non-contiguous spectrum allocations in the special mobile radio business. Motorola may use RadioFrame’s lower-cost iDEN architecture into entirely separated spectrum bands that are allocated to the wireless carriers in the international (outside the U.S.) markets. RadioFrame has a solid client base for its base station products, notable among them being Sprint Nextel Corp.(S).
RadioFrame’s base station products will be a part of Motorola’s Home and Network Mobility segment. This segment makes equipment for cable and wireless operators. Recently, industry rumors indicated that the company has decided to sell this segment for more than $4.5 billion. As of now, Home and Network Mobility is the largest segment of Motorola. In the third quarter of 2009, this segment generated more than $2 billion revenue and $199 million operating profit.
Earlier this month, Motorola’s Home and Network Mobility segment decided to purchase IPTV specialist BitBand and will do venture funding to the LTE chip making business of Sequans Communications together with Alcatel-Lucent (ALU). BitBand has more than 60 commercial IPTV deployments throughout the world and Paris based Sequans Communications has intended to demonstrate its first LTE chipset in early 2010. Whether Motorola sells its Home and Network Mobility segment or not, it seems that the company is increasingly focusing on optimizing the resources of its largest business segment.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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