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For Immediate Release
Chicago, IL – January 18, 2012 – Zacks Equity Research highlights: Celgene Corp.( ( CELG - Analyst Report ) as the Bull of the Day and Darden Restaurants, Inc.( ( DRI - Analyst Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Starwood Hotels & Resorts Worldwide Inc.( ( HOT - Analyst Report ) , Marriot International Inc.( ( MAR - Analyst Report ) and Wyndham Worldwide Corp.( ( WYN - 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:
We are maintaining our Outperform recommendation onCelgene Corp.( ( CELG - Analyst Report ) following impressive preliminary results disclosed for the fourth quarter (adjusted EPS up 46%) and full year 2011 (adjusted EPS up 36%). Preliminary adjusted revenues in the final quarter of 2011 came in at $1.28 billion, 22% above the year-ago figure. For 2011, sales came in at $4.8 billion, up 34%.
The company also gave a bright outlook for 2012 with adjusted earnings expected to improve by 25%. We believe that Celgene, driven by its oncology portfolio and robust pipeline, should easily achieve the 2012 guidance. We believe that the current price represents an attractive entry point for long-term investors.
Based on 2012 P/E estimates, the stock is trading at 17.4x earnings, compared to the industry average of 28.1. Our target price of $87.00 per share is based on 20.8x our 2012 EPS estimate of $4.18.
AlthoughDarden Restaurants, Inc.( ( DRI - Analyst Report ) registered improving blended comparable restaurant sales for the last few quarters, recent woes at Olive Garden continue to nag the company. Stiff competition resulting in higher discounting rates and promotional offers, increasing food costs for the upcoming quarter and cautious consumer spending add to the worry.
Moreover, a recent cut in guidance compels us to downgrade the stock from a Neutral to Underperform recommendation. The company now expects earnings per share from continuing operations to grow 4 7% as against the lower end of 12-15% guided earlier.
Our six-month target price of $40.00 equates to about 11.2x our estimate for 2012. The target price implies an expected total negative return of 9.5% over that period. We recommend an Underperform rating on the shares.
Latest Posts on the Zacks Analyst Blog:
Starwood to Outperform Ahead
We have an Outperform recommendation onStarwood Hotels & Resorts Worldwide Inc.( ( HOT - Analyst Report ) based on its strong expansion plan, significant international exposure, portfolio restructuring, earnings power as well as returns to shareholders.
Based in White Plains, New York, Starwood has embarked on an expansion plan, which is faster than many of its peers. Also, the solid brand recognition of the company allows it to charge a premium for its hotel rooms. With the average daily rate picking up and strong rebound in group business, the company expects room rate to drive 50% or more RevPAR growth in fiscal 2011.
Geographically, the business is sound in each segment. Although the austerity measures and fragile economic conditions affected demand in Europe, Starwood managed to register a 7% RevPar growth in Europe in the third quarter of 2011. The company further expects RevPar growth of 3% to 4% in Europe for the fourth quarter, the prevailing economic turmoil notwithstanding.
Starwood remains keen on portfolio restructuring both in terms of asset disposition as well as revamping its existing assets. While due to sluggish acquisition environment Starwood has no property to offload in the near term, Starwood plans to deploy its capital to renovate its owned assets and prepare them as lucrative acquisition targets in a stable environment.
Starwood has increased its guidance for 2011 more than once, implying secured business fundamentals. Moreover, the recent dividend hike of 67% to 50 cents per share and reinstatement of a share repurchase program long after the third quarter of fiscal 2008 spread cheer among investors.
Agreement - Estimate Revisions
Over the last 7 days, one out of 19 analysts raised the earnings estimate for the fourth quarter as well as fiscal 2011.
The company’s competitors includeMarriot International Inc.( ( MAR - Analyst Report ) andWyndham Worldwide Corp.( ( WYN - Analyst Report ) . Starwood currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
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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