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For Immediate Release
Chicago, IL – January 23, 2012 – Zacks Equity Research highlights UnitedHealth Group ( (UNH - Analyst Report) as the Bull of the Day and The Goldman Sachs Group ( (GS - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Tiffany & Company ( (TIF - Analyst Report), News Corporation ( (NWSA - Analyst Report) and School Specialty Inc. ( .
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:
UnitedHealth Group's ( (UNH - Analyst Report) fourth-quarter 2011 earnings came in substantially ahead of the Zacks Consensus Estimate, led by strong revenue growth from the UnitedHealthcare and Optum businesses, partially offset by higher medical costs. The company ended the year 2011 with better performances in virtually every meaningful metric: membership, revenues, MLR, operating margins and cash flow.
The company strengthened its key capabilities to respond to the emerging growth opportunities. These initiatives has been taken to expand its Medicaid and Medicare business and for growing the health service business.
Though certain headwinds such as high unemployment, growing medical cost, pressure from Health Care overhaul, etc. remains, we believe the company will beat the odds given its diversified business model with leading market share positions in the Commercial, Medicare and Medicaid markets. A solid balance sheet and a highly conservative investment portfolio will further help it to outperform its peers.
Bear of the Day:
We are downgrading our recommendation on The Goldman Sachs Group ( (GS - Analyst Report) to Underperform from Neutral based on expectation of continued lower top-line as in 2011, coupled with the fundamental pressure on the banking sector. Though the company reported profits, increased operating expenses and lower equity trading revenues remain matters of concern.
Though Goldman has a well-managed global franchise and strong capital base, regulatory issues, including lawsuits, are expected to dent the financials of the company in the upcoming quarters. During 2011, the company was sued by various firms for misrepresenting documents as an underwriter in the sale of mortgage-backed securities. Final judgment on these lawsuits has yet to be determined.
Our six-month price target of $98.00 equates to about 8.5x our earnings estimate for 2012. Combined with the $0.35 per share dividend, the price target implies an expected negative total return of 8.3% over that period, which is consistent with our Underperform recommendation.
Latest Posts on the Zacks Analyst Blog:
Tiffany Looks to UAE for Growth
Tiffany & Company ( (TIF - Analyst Report) entered into a strategic joint venture with a Dubai based company, Damas Jewellery, in a move to enhance the visibility of its brand in the United Arab Emirates. Both the companies agreed to infuse capital in the joint venture.
The company signed a memorandum of understanding (MoU) with Damas, which will facilitate Tiffany to integrate its five existing stores with its worldwide store network.
Of late, the emerging markets have been an important region for the retailers to enhance their profitability. The region not only provides an avenue to amplify sales but also brings in long-term opportunities for retailers to expand their margins as consumer spending in the region is one of the highest in the world.
According to the data released by the Department of Economic Development (DED), the consumer confidence index (CCI) of Dubai is rising. Overall CCI in Dubai marked an increase of 15 points to 125 in the last quarter of 2011 compared with the third quarter.
Perhaps retailers are not the only ones eyeing the region to generate profits. Recently, in a similar move, News Corporation ( (NWSA - Analyst Report) reached an accord with the MOBY Group to acquire a minority stake in the company in order to expand its footprint in the Middle East.
School Specialty Expands Tech Solutions
Recently, School Specialty Inc. ( , the leading provider of supplemental educational products for PreK–12 educators, has expanded its offering of classroom technology solutions. The company introduced a new range of technology to improve the output and efficiency of its clients. The new technology will have an array of features at different price levels and will include document cameras, short-throw digital projectors, interactive white boards, listening centers, student response systems, pads and slates.
Requirement of standardized instructional equipments and increasing classroom sizes are creating lot of new challenges for the educators. With a variety of approximately 75,000 items ranging from classroom supplies, furniture, playground equipment and supplemental curriculum solutions, School Specialty serves as a complete package for the educators’ total classroom solution.
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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