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For Immediate Release
Chicago, IL – November 21, 2011 – Zacks Equity Research highlights ZOLL Medical Corp. as the Bull of the Day and DeVry Inc.'s (DV - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Union Pacific Corp. (UNP - Analyst Report), CSX Corp. (CSX - Analyst Report) and Norfolk Southern Corp. (NSC - 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 upgrade our recommendation on ZOLL Medical Corp. to Outperform following its forecast-topping fourth quarter results. Revenues and earnings for the quarter outperformed the Zacks Consensus Estimates, driven by strong contributions from the company's LifeVest and temperature management franchises, backed by higher sales in the North American hospital market.
We are pleased with ZOLL's solid fundamentals and its broad product range. Moreover, its significant international presence should also drive growth. The company has completed multiple acquisitions and is seeking more such lucrative transactions to aid growth.
Management's outlook for fiscal 2012 appears encouraging with sales are expected to grow at a healthy double-digit clip on the strength of the company's core defibrillator business. Our price target of $53 is based on 27.3x our fiscal 2012 EPS estimate.
Bear of the Day:
We are downgrading DeVry Inc.'s (DV - Analyst Report) stock from Neutral to Underperform on the back of sluggish first quarter 2012 earnings of $0.83, which missed the year-ago level as well as Zacks Consensus Estimate by 19.4% and 13.5% respectively. Deteriorating economic conditions and rising unemployment acted as catalysts for the slowdown of the company's growth.
In addition, about 123,000 students got enrolled across all the DeVry institutions which were marginally lower than the previous year. Lower enrollment in the fourth quarter 2011 in DeVry University, particularly in Carrington, lowered margins which compelled the company to tighten cost-control measures.
Management lowered its guidance for the fiscal year as it does not expect earnings to grow significantly in the near future. Moreover, compulsion of the company to comply with the strict regulations poses a threat to DeVry's operations.
Latest Posts on the Zacks Analyst Blog:
Union Pacific Raises Dividend
Union Pacific Corp. (UNP - Analyst Report), the largest class 1 freight railroad operator in the U.S., has decided to increase its shareholders’ wealth. Yesterday, the Board of Directors of Union Pacific have authorized to raise its quarterly dividend rate by over 26% to 60 cents per share from the existing level of 47.5 cents per share. The increased dividend will be paid on January 2, 2012 to stockholders of record as of November 30, 2011.
As per management, huge free cash flow along with fairly bright future business opportunity are the primary reasons for the dividend hike. Union pacific reported record-breaking financial results in the previous quarter. Third-quarter 2011 net income was a historic-high $904 million.
Quarterly Freight revenue of all the six business groups increased in the last quarter. Four out of six business groups of Union Pacific posted business volume growth in the previous quarter.
The U.S. railroads are gaining momentum over the trucking industry due to the significant rise in fuel costs of truckers. The railroads are at present carrying more cargos, which is helping them to prosper even under a challenging economic scenario. Union Pacific is a major beneficiary for this favorable industry trend.
This is the second time in 2011 that management has raised its dividend rate. In 2011, dividend per share increased by an enormous 58% year over year.
Freight rail is a “derived demand” industry. Moreover, rail services are included in the demand for the products that railroads haul. Rail traffic, therefore, acts as a solid barometer for the overall health of the economy. Several railroad operators, such as Union Pacific, CSX Corp. (CSX - Analyst Report), and Norfolk Southern Corp. (NSC - Analyst Report) have expressed their confidence that growth rate of business volume in 2011 will exceed the U.S. GDP and industrial production growth rate. Similarly, core pricing gain in 2011 will also exceed inflation.
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.
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