For Immediate Release
Chicago, IL –August 13, 2010 – Zacks Equity Research highlights: Wyndham (WYN) as the Bull of the Day and Pulte Group (PHM) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tata Motors Ltd. (TTM), Ford Motor Co. (F) and Aegon NV (AEG).
Here is a synopsis of all five stocks:
Wyndham’s (WYN) second quarter 2010 earnings were ahead of the Zacks Consensus Estimate, primarily due to betterthan- expected business in Vacation Exchange and Rentals, along with a lower effective tax rate and favorable impact of foreign currency translation.The company has also raised its fiscal year 2010 outlook.
The company provides various hospitality products and services to individual consumers and businesses. Going forward, we expect Wyndham to benefit from its repositioning to a more fee-for-service based business and strategic focus on Vacation Exchange and Rental business. Moreover, with lower cash taxes, we expect the company to generate strong free cash flow and return the capital to shareholders.
Additionally, considering the reviving lodging industry and increasing occupancy rate, we expect the top-line improvement to gain momentum, going forward. Hence, we are upgrading the stock from Neutral to Outperform.
Despite being the largest homebuilder in the U.S. with operations in more than 50 markets, Pulte Group (PHM) suffers from high cyclicality in the industry.
The company also faces intense competition from the resale of existing or foreclosed homes, as well as available rental housing.
Furthermore, the sub-prime mortgage crisis continues to adversely affect its sales and pricing in the homebuilding business. Therefore, we continue to recommend shares of the company as Underperform and set a target price of $7.75.
Latest Posts on the Zacks Analyst Blog:
Tata Motors Earns $432 Million
Macy’s Inc. (M) has posted second-quarter 2010 results that topped Zacks’ expectations. The quarterly earnings of 35 cents a share outperformed the Zacks Consensus Estimate of 28 cents, and rose 75% from 20 cents delivered in the prior-year quarter.
The company has been taking prudent steps to increase sales, profitability and cash flows, which include integration of operations, consolidation of divisions and customer-centric localization initiatives. To help drive traffic, Macy’s continues to focus on price optimization, inventory management and merchandise planning.
The Cincinnati, Ohio-based Macy’s said that total sales grew 7.2% to $5,537 million from $5,164 million in the prior-year quarter. Total revenue also comfortably surpassed the Zacks Consensus Revenue Estimate of $5,481 million. Comparable-store sales for the quarter jumped 4.9%.
Online sales, which include macys.com and bloomingdales.com, sustained their growth momentum and were up 28.1% in the quarter, favorably impacting comparable-store sales by 0.5%.
Deleveraging and Deficits
Tata Motors Ltd. (TTM) posted a profit of Rs.19.9 billion ($432 million) during the first quarter of its fiscal year, ended June 30, 2010. That was in sharp contrast to a loss of Rs.3.3 billion ($71 million) in the prior-year quarter. This is equivalent to earnings per share of Rs.34.80 (76 cents) during the quarter against a loss of Rs.6.40 (14 cents) a year ago. Sales volume for the quarter surged 49% to 190,304 vehicles globally. Consequently, revenues soared 64% to Rs.270.6 billion ($5.9 billion).
Jaguar and Land Rover (JLR) – acquired by Tata from Ford Motor Co. (F) in 2008 – showed a profit before tax of Rs.15.9 billion ($345 million). This was due to an increase in sales volumes, massive restructuring programs after its acquisition and favorable currency translation effects.
Aegon Swings to Profit
Dutch insurer Aegon NV (AEG) reported second quarter net income of €413 million (US$538 million), which came in substantially ahead of the net loss of €161 million (US$210 million) in the year-ago quarter. The momentous swing was primarily due to improved earnings, realized gains on investments, increased deposits and lower impairments.
Aegon’s underlying earnings before tax amounted to €522 million, compared with €415 in the year-ago quarter. This was primarily driven by improved financial markets and strengthening of the U.S. dollar. Earnings increased year over year with growth witnessed across the U.S. and U.K., partially offset by a decline in The Netherlands and new markets. On a constant currency basis, operating expenses decreased by 2% year over year to €830 million as a result of significant cost savings due to the Aegon’s cost-cutting initiatives taken up in 2009.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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AEGON N V (AEG): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
PULTE GROUP ONC (PHM): Free Stock Analysis Report
TATA MOTORS-ADR (TTM): Free Stock Analysis Report
WYNDHAM WORLDWD (WYN): Free Stock Analysis Report
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