For Immediate Release
Chicago, IL – December 7, 2011 – Zacks Equity Research highlights: Unisys Corp. ( (UIS - Analyst Report) as the Bull of the Day and Willis Group Holdings, Plc ( as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Toll Brothers ( (TOL - Analyst Report), Leap Wireless and Verizon Wireless ( (VZ - 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:
Over the last few years, Unisys Corp. ( (UIS - Analyst Report) has been restructuring its business to improve profitability. This restructuring strategy includes slashing jobs to reduce costs, selling non-core businesses and revamping its sales strategy, while also focusing investments on a few higher-growth areas such as outsourcing.
Unisys is currently concentrating on business opportunities in fewer, more profitable markets in the information technology (IT) marketplace. Recently, a few agencies upgraded their rating on Unisys in the wake of reduced debt as well as an improved operating performance. Estimates have also gone up significantly of late.
Consequently, we have upgraded our recommendation to Outperform from Underperform. Accordingly, we set a target price of $29.00, derived by applying a P/E multiple of roughly 12.3x our 2011 EPS estimate of $2.36.
Bear of the Day:
We are downgrading our recommendation on Willis Group Holdings, Plc ( to Underperform from Neutral due to the headwind from The Loan Protector business that is expected to weigh on North American results. The soft insurance market is likely to continue.
Additionally, the weakness in the US economy will remain a headwind and restrict any significant top-line growth in the company. Willis also expects to incur pre-tax charges of approximately $160 million in 2011, up from $130 million expected earlier.
Our six-month target price of $31.00 equates to about 11.2x our earnings estimate for 2011. This target price along with an annual dividend of $1.04 implies an expected negative return of about 8% over that period, which is consistent with our Underperform recommendation.
Latest Posts on the Zacks Analyst Blog:
Eurozone Credit Warnings
In putting the sovereign debt ratings of 15 Eurozone countries on negative watch yesterday, Standard & Poor’s Rating Services showed a particularly impressive sense of timing. The rating action punctured some of the enthusiasm building in the market for Friday's EU summit, where Germany and France are expected to spearhead a move towards greater fiscal integration in the union.
With nothing major on the U.S. economic calendar, there will likely be no distractions from developments in Europe today, with S&P’s rating action front and center in market action. On the positive side, the threat of en masse Eurozone rating downgrades has the potential to rally the countries around the Franco-German proposal in Friday’s summit meeting.
The bond markets had long suspected France of being at risk of losing its coveted triple-A. As such, the inclusion of France in the S&P’s list was not much of a surprise. But the inclusion of Germany on the list, an otherwise pristine credit, feeds investors’ anxieties that the unsettled crisis is seeping into the Eurozone core.
On a substantive level, the rating action threatens the credit profile of the European Financial Stability Facility (EFSF) rescue fund. Will the EFSF be able to sport a triple-A credit profile if its sponsors and guarantors have weaker ratings?
The rating action’s impact is more in terms of investor psychology than actual pricing action. After all, the S&P’s downgrade of the U.S. credit profile did little to dent the value of treasury instruments. Yields on the 10-year U.S. treasury bond has lately been in the 2% vicinity, down from the roughly 2.5% level before the S&P’s summer downgrade. On the positive side, the threat of en masse Eurozone rating downgrades has the potential to rally the countries around the Franco-German proposal in Friday’s summit meeting.
In corporate news, we have a solid earnings and revenue beat from Toll Brothers ( (TOL - Analyst Report), the luxury homebuilder. In wireless spectrum sale and purchase action, Leap Wireless purchased spectrum from Verizon Wireless ( (VZ - Analyst Report) around Chicago and sold the national carrier spectrum around other markets.
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=7158.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment
Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339