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Zacks Bull and Bear of the Day Highlights: Navigant Consulting, Linear Technology, Toyota Motor, Honda Motor and Nissan Motor

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August 31, 2011 | Comment(s): 0
Recommended this article (6)
NCI | LLTC | TM | HMC | NSANY

For Immediate Release

Chicago, IL – August 31, 2011 – Zacks Equity Research highlights Navigant Consulting Inc. (NCI - Analyst Report) as the Bull of the Day and Linear Technology Corp. (LLTC - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Toyota Motor Corp. (TM - Analyst Report), Honda Motor Co. (HMC - Analyst Report) and Nissan Motor Co. (NSANY - Analyst Report).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.

Here is a synopsis of all five stocks:

Bull of the Day:

Navigant Consulting Inc. (NCI - Analyst Report) topped both earnings and revenues in its second-quarter 2011 results. Its utilization rate improved substantially. Navigant's restructuring activities, construction dispute practice and economics consulting services delivered well in the second quarter.

Moreover, the number of active engagements also remained steady. The integration of Ethos Partners in the Healthcare segment also augurs well for the company.

Although a huge debt obligation against limited cash flow increases liquidity risk, we believe that the company's inorganic expansion will facilitate its long-term growth. Hence, we upgrade the stock from Neutral to Outperform rating.

Bear of the Day:

Linear Technology Corp. (LLTC - Analyst Report) is a leading OEM of analog and mixed signal semiconductors. The Japan crisis, continued lack of consumer confidence and credit-related crisis in the Americas and Europe led to a disappointing guidance.

Therefore, we advise investors to avoid the shares, since we believe there is uncertainty in near-term demand. This, along with the company's debt burden, will continue to weigh on sentiments. We therefore reiterate our Underperform rating on LLTC shares.

The forward P/E of 13.2X based on our 2011 earnings estimate represents a 24.5% premium to the peer group, which opposes historical trends, indicating downside. The expected earnings growth rate of 9.0% is also significantly lower than the peer group growth rate of 14.3%.

Latest Posts on the Zacks Analyst Blog:

Japanese Automakers Still Fight Weak Production

Automakers in Japan saw weak production and sales in July on the back of strong yen, unstable global economy and parts-supply problem due to the earthquake and tsunami in Japan on March 11.

Global production at Toyota Motor Corp. (TM - Analyst Report) dipped 6.1% on a year-over-year basis to 594,614 vehicles during the month while its domestic sales of passenger cars, trucks and buses slashed 35% and exports slid 5% due to lower shipments to North America.

However, Toyota plans to ramp up production in the coming months to make up for the lost production due to the disaster. Consequently, the automaker plans to manufacture additional 350,000 vehicles between October and March 2012.

Honda Motor Co. (HMC - Analyst Report) saw the worst. Its global vehicle production plunged 34% to 206,727 units in July for the sixth straight month, while its domestic sales tumbled 31.5% and exports declined more than 19%.

Nissan Motor Co. (NSANY - Analyst Report) fared well compared to both the automakers. Its worldwide production appreciated 18% to 388,680 vehicles. Its production in the U.S. was boosted by strong demand for the Altima sedan. Despite a 17% fall in domestic sales, the company’s global sales improved 8% due to a 23% rise in exports during the month.

Meanwhile, global vehicle production at Suzuki Motor Corp. slipped 3.6% to 228,147 units, Mazda Motor Corp. declined 13% to 103,384 units, and at Mitsubishi Motors Corp., decreased 5% to 97,862 units.

Toyota revealed a profit of ¥1.16 billion ($14.21 million) or 37 yen cents per share for the first quarter of its fiscal year ended March 31, 2012, which plummeted from ¥190.47 billion ($2.33 billion) or ¥60.74 per share a year ago.

The sharp fall in profit was attributable to substantial decline in vehicle sales all over the world, especially North America and Europe due to disruptions in supply of parts caused by the twin disaster in Japan.

On the other hand, Honda posted a sharp 88.3% fall in profit to ¥31.8 billion ($394 million) or ¥17.64 per share (22 cents per share) in the first quarter of its fiscal year from ¥272.49 billion or ¥150.27 per share in the same quarter of prior fiscal. The decline in profit was attributable to adverse impact from the Japan disaster and unfavorable currency translation effects.

However, Nissan reported a 1.6% increase in revenues to ¥2.08 trillion ($25.48 billion), while its profit totaled ¥85 billion ($1.04 billion). Nissan sold 1056.000 units globally during the quarter, an increase of 10.6% from the same period last year.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About the Analyst Blog

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Read the full analyst report on NCI

Read the full analyst report on LLTC

Read the full analyst report on TM

Read the full analyst report on HMC

Read the full analyst report on NSANY

 

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