For Immediate Release
Chicago, IL – August 24, 2009 – Zacks Equity Research highlights Yum! Brands (YUM) as the Bull of the Day and Sunoco (SUN) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Sherwin Williams (SHW), La-Z-Boy (LZB) and Mohawk (MHK).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2676
Here is a synopsis of all five stocks:
The operator of Taco Bell, Pizza Hut, and KFC fast food chains, Yum! Brands (YUM), reported second quarter results, with double-digit growth in the bottom-line. Earnings per share grew 11% to 50 cents, surpassing the Zacks Consensus Estimate of 43 cents
Driving growth is the company’s overseas divisions (China and Yum Restaurants International), which constitute the only stable segment of the entire restaurant industry. Both the divisions are on track to grow operating earnings by an average CAGR of 20% and 10%, respectively
The U.S. operations are also showing signs of revival with an expected operating earnings growth of 5%. We think the stock provides relative safety and moderate growth in a turbulent environment and exposure to faster-growing international markets
As a result, the company remains confident of its business model and its ability to deliver at least 10% EPS growth in 2009 and beyond consistently. As such, we maintain an Outperform recommendation on the stock.
Our Underperform recommendation on Sunoco (SUN) shares takes into account the bearish refining margin outlook. A growing supply overhang in the face of a recession-induced fall in global oil product demand has led to a squeeze in refiners profits.
Sunoco’s lack of geographic diversification and refining flexibility has also become a major liability, in our view. Weighed down by these factors, the company posted a second-quarter 2009 loss.
Overall, we see a fairly unfavorable macro backdrop for independent refiners like Sunoco. We believe this will cause Sunoco shares to underperform relative to the market as well as the sector in the coming quarters.
Latest Posts on the Zacks Analyst Blog:
Used Home Sales Jump
While some uptick in inventories is normal, this month was much more than normal. The overhang of inventories means that prices will still be under pressure for awhile. Still, this was the biggest monthly gain in new home sales since 1999.
While existing home sales do not have that much direct influence on the economy, it is a good sign.
It is certainly welcome news for firms like Sherwin Williams (SHW) since when people move into a new (for them) house, they tend to do things like paint and redecorate. Furniture companies like La-Z-Boy (LZB) and carpet companies like Mohawk (MHK) should also benefit.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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