For Immediate Release
Chicago, IL – April 12, 2010 – Zacks Equity Research highlights Starwood Hotels (HOT) as the Bull of the Day and Synopsys (SNPS) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Costco Wholesale Corp. (COST), BJ’s Wholesale Club Inc. (BJ) and Wal-Mart Stores Inc. (WMT).
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 upgrading our recommendation on Starwood Hotels (HOT) to Outperform. The company’s fourth quarter operating earnings were well ahead of the Zacks Consensus Estimate, primarily driven by better-than-expected revenue.
Though the company continued to experience a decrease in revenue per available room (RevPAR), the rate of deterioration has moderated. In fact, in the recent months, the industry is showing signs of RevPAR improvement.
Going forward, the company’s strong pipeline, significant international exposure, solid balance sheet, shift to a fee-based business model and a less capital-intensive timeshare business augur well. However, considering the sluggish recovery of the economy and the slow booking pace, we expect the top-line improvement to be slow.
Synopsys (SNPS) delivered mediocre first quarter results, with below-par operating performance. The 2010 guidance does not reflect any substantial growth.
Although Synopsys is gaining traction from new products, acquisitions, and new EDA partnerships, we believe these will take time to produce results. We believe Synopsys’ time-based license model has good visibility and has a decent cash position. On the other hand, the semiconductor industry has yet to stabilize and generate demand.
Synopsys is facing customer concentration risk. The industry-wide weakness is impacting its core business. We therefore maintain our Underperform rating to the stock.
Latest Posts on the Zacks Analyst Blog:
Costco Sales Climb
Costco Wholesale Corp. (COST), one of the leading U.S. warehouse club operators, recently reported better-than-expected sales results for the five-week period ended Apr 4, 2010 driven by robust sales in international locations.
After portraying an increase of 9% in February 2010, Costco’s comparable-store sales for March rose 10%, reflecting a comparable sales growth of 5% at its U.S. locations and 28% at its international divisions. Year-to-date total comparable-store sales grew 7% with U.S. sales up 3% and international sales up 21%. The results were favorably impacted by rising gasoline prices and a weaker U.S. dollar.
Excluding the effects of gasoline prices and a softer dollar, Costco’s comparable-store sales for March climbed 3% with U.S. comparable sales up 2%, while international comparable sales up 7%. Year-to-date total comparable-store sales grew 3% with U.S. sales up 2% and international sales up 8%.
Total net sales for March surged 12% to $7.14 billion from $6.40 billion posted in the same month last year. Year-to-date sales increased 9% to $45.20 billion from $41.48 billion delivered in the same period last year.
The shift in the Easter holidays and 34 sales days for the five-week period for March, compared with 35 in the prior-year period hurt both total and comparable-store sales by 1% to 2%.
Costco, which faces stiff competition from BJ’s Wholesale Club Inc. (BJ) and Sam’s Club, a division of Wal-Mart Stores Inc. (WMT), currently operates 567 warehouses, including 414 in the U.S. and Puerto Rico, 77 in Canada, 32 in Mexico, 21 in the U.K., 9 in Japan, 7 in Korea, 6 in Taiwan and 1 in Australia.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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