For Immediate Release
Chicago, IL – March 17, 2010 – Zacks Equity Research highlights VeriFone (PAY) as the Bull of the Day and Suncor Energy (SU) the Bear of the Day. In addition, Zacks Equity Research provides analysis on D.R. Horton (DHI), Masco (MAS) and Fortune Brands (FO).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Over the past few quarters, VeriFone (PAY) experienced lower-than-expected revenue levels and a softer demand globally due to weak markets and adverse economic conditions. However, results for the fiscal first quarter were ahead of expectations. EPS came in at $0.26, easily beating the Zacks Consensus Estimate of $0.18.
Management stated that business has begun to recover in both domestic and international markets, and revised its guidance for 2010. VeriFone now sees revenues reaching $925-$940 million in 2010, up from the previous estimate $900-$945 million. EPS is forecasted to be between $1.00 and $1.10, up from the previous estimate of between 97 cents and $1.07.
Based on a brighter outlook for 2010, we upgrade our recommendation on VeriFone to Outperform from Neutral.
We are downgrading Suncor Energy (SU) shares to Underperform from Neutral, reflecting its weak near- to medium-term production outlook and the Petro-Canada acquisition-related risks. Recently, the company cut its 2010 targeted oil sands output following an upgrader fire in February.
After the Petro-Canada acquisition, we also remain worried about Suncor’s high debt level and significant anticipated capital expenditure requirements. Further, there are operational and execution risks associated with the integration of Petro-Canada’s predominately conventional assets, of a type and in geographies where Suncor lacks experience.
These factors, coupled with the current uncertainty in commodity prices, make Suncor a bearish case. This is reflected in our downgrade of the company’s shares. Our $29 price objective reflects a 2010 P/E multiple of 15.2x.
Latest Posts on the Zacks Analyst Blog:
Housing Starts Slow
Building a house can employ a lot of people. After the 2001 recession, job creation really did not get underway until August 2003, and the bulk of job creation in that expansion happened over the next three years. By August of 2006, the economy had added 6.430 million jobs, of which 965,000 — or 15.0% — were in Construction.
At the start of the period, construction jobs were just 5.2% of all jobs in the country, and by August 2007, they had climbed to 5.7%. While the overall economy continued to gain jobs until November 2007, August 2006 was the peak for construction jobs. Since then, the construction industry has lost 2.170 million jobs, while the economy as a whole as 6.826 million fewer jobs than in August of 2006.
In other words, construction alone is responsible for 31.8% of all jobs lost since that time. In the process, Construction has fallen back to being just 4.3% of all jobs in the country. Those numbers do not count the auxiliary jobs that are created by housing construction. The carpenter working for D.R. Horton (DHI) is counted, but not the guy in the factory making faucets at Masco (MAS) or the gal making kitchen cabinets at Fortune Brands (FO).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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