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Zacks Bull and Bear of the Day Highlights: Enterprise Products Partners, Hospira, Hain Celestial Group, General Mills and Kraft Foods

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November 10, 2011 | Comment(s): 0
Recommended this article (6)
EPD | HSP | HAIN | GIS | KFT

For Immediate Release

Chicago, IL – November 10, 2011 – Zacks Equity Research highlights Enterprise Products Partners (EPD - Analyst Report) as the Bull of the Day and Hospira Inc. (HSP - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Hain Celestial Group Inc. (HAIN - Analyst Report), General Mills Inc. (GIS - Analyst Report) and Kraft Foods Inc. (KFT - 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:

We are upgrading our recommendation on Enterprise Products Partners (EPD - Analyst Report) to Outperform from Neutral. The partnership, which remains a core holding in a MLP portfolio, focuses on projects that generate stable cash flow and contribute to its integrated value chain.

We believe the Haynesville Acadian Expansion and Eagle Ford projects will allow Enterprise to take a lead role in the development of natural gas liquids and natural gas infrastructure. While Enterprise increased its cash flow distribution by 5.2% in the third quarter, it also deployed cash in various fee-based development projects that will likely generate operating cash flow to support its future distribution growth.

As such, we rate Enterprise Products Partners units as an attractive investment and upgrade it to Outperform. Our $54 target price, 26.0x 2011 earnings per unit, corroborates this view.

Bear of the Day:

Hospira Inc.'s (HSP - Analyst Report) third quarter preliminary results were below expectations due to continued manufacturing problems at the company's Rocky Mountain facility. The facility is expected to continue functioning below full capacity through the remainder of 2011. The additional costs for manufacturing remediation resulted in lost sales, inventory loss and lower service levels.

In addition, management cut its 2011 adjusted earnings guidance to $2.95-$3.05 from $3.90-$4.00. We have slashed our 2011 earnings estimate from $3.93 to $3.01 and our 2012 estimates from $4.47 to $2.85, in line with management's action.

Moreover, the Symbiq and Plum pump issues remain matters of concern. We have, therefore, downgraded our rating on Hospira from Neutral to Underperform.

Latest Posts on the Zacks Analyst Blog:

Bullish on Hain Celestial

We recently upgraded our recommendation on The Hain Celestial Group Inc. (HAIN - Analyst Report) – which distributes, markets, and sells various natural and organic foods as well as personal care products – to Outperform with a price target of $37.00. Earlier, we had a Neutral view.

What Triggers the Move?

Hain Celestial’s better-than-expected first-quarter 2012 results and an improved outlook compelled us to revisit our recommendation. The quarterly earnings of 29 cents a share beat the Zacks Consensus Estimate by a penny, and climbed 16% from 25 cents delivered in the prior-year quarter.

The company’s strategic investments, and sustained efforts to contain costs, increase productivity and enhance cash flows and margins, have enabled it to deliver healthy results.

Total revenue in the quarter rose 13.3% to $292.4 million from the prior-year quarter, and was also ahead of the Zacks Consensus Estimate of $288 million. The improvement in the top line was aided by healthy performances across United States, Canadian and European operations as well as its recent acquisitions.

The company registered robust contribution from Grocery, Natural, Celestial Seasonings, Club, mass and dot-com channels.  Hain Celestial also experienced solid sales across recently acquired brands, Sensible Portions snacks and The Greek Gods yogurt.

Hain Celestial, which competes with General Mills Inc. (GIS - Analyst Report) and Kraft Foods Inc. (KFT - Analyst Report), now projects revenue between $1,455 million and $1,480 million and earnings in the range of $1.63 to $1.73 per share for fiscal 2012. Earlier, management had forecast revenue in the range of $1,230 million to $1,260 million, and earnings between $1.50 and $1.60 per share.

Hain Celestial has undertaken a number of initiatives to improve performance and to put itself on the growth trajectory. The company’s Stock Keeping Unit (SKU) rationalization program has helped eliminate SKUs based on lower sales volume or weak margins. Management focuses on improving profitability through new product introductions and cutting costs.

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 EPD

Read the full analyst report on HSP

Read the full analyst report on HAIN

Read the full analyst report on GIS

Read the full analyst report on KFT

 

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