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For Immediate Release
Chicago, IL – February 1, 2012 – Zacks Equity Research highlights Caterpillar, Inc. (CAT - Analyst Report) as the Bull of the Day and Bank of America Corp.'s (BAC - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Cosi Inc. , Panera Bread Co. (PNRA - Analyst Report) and Starbucks Corp. (SBUX - 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:
Caterpillar Inc.'s (CAT - Analyst Report) fourth quarter EPS increased 53% to $2.25 and revenues surged 35% to a record $17.2 billion, driven by increased machine demand. Results were way ahead of Zacks Consensus Estimates.
With the Bucyrus acquisition, the company is positioned to be the #1 mining equipment manufacturer in the U.S. with a strong footing in the major mining markets of China and India. Caterpillar's strong brand name, pricing power and global dealer network put it in a position to capitalize on the growing need for infrastructure development worldwide.
We maintain our Outperform recommendation, which indicates that it will perform better than the market. Our $134.00 target price, 14.5x our 2012 EPS estimate, reflects this view.
Bear of the Day:
Bank of America Corp.'s (BAC - Analyst Report) fourth-quarter earnings came in substantially lower than the Zacks Consensus Estimate. The sale of non-core assets and accounting gains made it possible for the company to remain profitable during the quarter. However, excluding nonrecurring items, the company would have incurred a loss.
Higher non-interest expense was the primary headwind in the quarterly numbers. Also, capital and liquidity remained weak. For the full year 2011, the company reported earnings of $0.01 per share, a nickel lower than the Zacks Consensus Estimate.
Our six-month target price of $6.50 per share equates to about 7.0x our earnings estimate for 2012. This price target implies an expected negative total return of 8.1% over that period, which is consistent with our long-term Underperform recommendation on the shares.
Latest Posts on the Zacks Analyst Blog:
Cosi Comps Turn Around in 4Q
Cosi Inc. recently reported a 2.6% rise in its system-wide comparable restaurant sales for the fourth quarter of 2011, after witnessing declining comps for two consecutive quarters.
The upside in comps was driven by new initiatives and seasonally mild weather conditions. In the month of December, which is the holiday period, comps crept up 8.2%. Comparable restaurant sales represent a key figure, which measures growth at restaurants in operation for more than 15 months.
Company-owned comparable restaurant sales inched up 0.9%, due to higher customer visitation. Moreover, same-store sales at franchise operated restaurants climbed 5.3%. The premium casual dining restaurant chain operator is expecting the same trend to continue for the first quarter of 2012.
Sales for the fourth quarter 2011 also rose on the back of one extra week of operation compared with the year-ago quarter, same-store sales growth and higher company-owned restaurant sales.
Total revenue, which comprises company-operated restaurant sales and franchise fees and royalties, jumped 3.3% year over year to $26.2 million. Sales also surpassed the Zacks Consensus Estimate of $24.0 million.
A traffic growth of 0.6% and an increase of 0.3% in average check resulted in a 2.8% upside in company-operated restaurant sales to $25.3 million. Franchise fees and royalty revenues increased 18.8% to $0.9 million.
We expect estimates to go up in the coming days based on encouraging fourth quarter sales results coupled with positive outlook for the next quarter. The Zacks Consensus Estimate for 2011 and 2012 are pegged at a loss of 12 cents and earnings of 2 cents, respectively.
During the third quarter of 2011, Cosi posted a 6.6% year-over-year decline in total revenue, as company-owned restaurant sales tumbled 6.8%. However, franchise fees and royalty revenues expanded 11.0% year over year. In the reported quarter, system-wide comparable sales slid 3.0% from the year-ago quarter due to sluggish consumer spending. Comps at both company-owned restaurants and franchised restaurants were down 3.0% year over year.
The company is slated to release its fourth quarter 2011 results on March 29, 2012. Its prime competitors include Panera Bread Co. (PNRA - Analyst Report) and Starbucks Corp. (SBUX - Analyst Report). Cosi currently retains a Zacks #3 Rank (short-term Hold rating). We are also maintaining our long-term Underperform recommendation on the stock.
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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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.
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