Zacks Bull and Bear of the Day Highlights: First Solar, Wendy’s, Equity Residential, Mid-America Apartments and Apartment Investors
For Immediate Release
Chicago, IL – May 27, 2009 – Zacks Equity Research highlights First Solar Inc. (FSLR - Analyst Report) as the Bull of the Day and Wendy’s/Arby’s Group (WEN - Analyst Report) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Equity Residential (EQR - Analyst Report), Mid-America Apartments (MAA - Snapshot Report) and Apartment Investors (AIV - Snapshot Report).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all five stocks:
Bull of the Day:
First Solar’s (FSLR - Analyst Report) growth story will continue with its order backlog surpassing $6 billion, higher capacity online in the Malaysia and Ohio facilities, higher volumes in the German market, declining cost per watt, a recent all-stock acquisition of OptiSolar, and the new utility scale PV system deployments in the United States.
However, a weak Euro in light of its focus on Europe, declining governmental subsidies for solar initiatives, tight credit markets and the modules oversupply situation in the market may partially hamper growth.
Accordingly, we maintain our speculative BUY recommendation on FSLR with a six-month target price of $225. Price appreciation to our near-term valuation target represents 17.4% upside potential.
Bear of the Day:
Wendy’s (WEN - Analyst Report) new management team, led by Arby’s CEO, have outlined what we think is a viable, albeit multi-year turnaround plan that includes improving margins, reinvigorating the brand, revitalizing comps, and expanding internationally.
However, Wendy’s turnaround efforts come at a difficult time for the industry, which faces rising input costs and a deepening recession. Arby’s, which serves pricier food, is being particularly hard hit, with comps falling 8.7% in 1Q09.
While we think there is a lot of low-hanging fruit for initial margin improvement, management’s $100 million annual incremental store-level operating profit target will in our opinion take at least two years and necessitate executing on many levels.
Latest Posts on the Zacks Analyst Blog:
Housing Prices Still Falling
We are right in the middle of that "fair value" range at 1.1. However, rents have started to fall at the major Apartment REITS such as Equity Residential (EQR - Analyst Report), Mid-America Apartments (MAA - Snapshot Report) and Apartment Investors (AIV - Snapshot Report) and that usually presages declines in the rent component of the Consumer Price index (one more reason to be more worried right now about deflation than inflation, but longer-term inflation will be the bigger threat).
This also suggests that there are still more price declines to come, but that the worst of it is now behind us. While much depends on what city you are in, housing prices are now reasonable, but not exactly cheap. We will probably undershoot "fair value," so if you can hold off buying a new house for a few more months, your patience is likely to be rewarded. On the other hand, if you are planning on staying in the house for the next 20 years, it will not make that much difference at this point (unlike the past few years).
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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.
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