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For Immediate Release
Chicago, IL – March 7, 2012 – Zacks Equity Research highlights: Apple, Inc.( ( AAPL - Analyst Report ) as the Bull of the Day and AGL Resources, Inc.( ( GAS - Analyst Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Skechers USA Inc( ( SKX - Analyst Report ) , Deckers Outdoor Corporation( ( DECK - Analyst Report ) and Nike Inc.( ( NKE - 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:
Apple, Inc.( ( AAPL - Analyst Report ) reported a stellar first quarter that was primarily driven by strong holiday season sales based on the ramp in demand for the new iPhone 4S. Robust sales in the iPad and Mac series also chipped in, registering a strong quarter for the company.
We believe Apple remains the biggest growth story in the technology sector primarily on account of its superior product pipeline, Apps, strong iCloud revenues, the upcoming iPad 3 update, loyal customer base and international expansion going forward. Despite the legal complexities and increasing competition in iPad and iPhone segments, we are optimistic about the company's growth prospects in the long term.
Moreover, we also expect Apple to succeed in developing markets due to the growing affluence of the middle class in key markets. Thus, we upgrade our rating from Neutral to Outperform with a target price of $654.00.
We are maintaining our Underperform recommendation onAGL Resources, Inc.( ( GAS - Analyst Report ) with a target price of $36. We expect shareholder sentiment towards the company to remain lukewarm, considering its investment in higher-risk unregulated operations, ongoing regulatory uncertainties and the challenging economic environment.
AGL's earnings are likely to suffer in 2012 due to a less-than-favorable outlook at its wholesale segment. Additionally, the inclusion of the shipping operations (post-Nicor acquisition) has left AGL with a weak business, thereby heightening its risk profile.
Considering these factors, we see little reason for investors to own the stock and therefore maintain our Underperform recommendation. Our $36 price objective reflects a 2012 P/E multiple of 12.5x.
Latest Posts on the Zacks Analyst Blog:
Skechers Transforms in Japan
Following its sluggish fourth-quarter 2011 results,Skechers USA Inc( ( SKX - Analyst Report ) is trying hard to reposition itself for 2012. Yesterday, the company announced its intention to double its business in Japan over the next three to five years by transitioning its business model from a third-party distributor to a wholly owned subsidiary.
Japan has been one of the company’s biggest distribution markets. Thus, the company plans to roll-out new Skechers retail stores across the country, including its collection of performance and lifestyle footwear for men, women and children for boosting revenues.
International business remains a significant growth driver for the company’s sales. International wholesale business’ revenue jumped 12% to $487.3 million during fiscal 2011 and International retail sales surged 22% during fiscal 2011.
Further, management remains committed to focus on new lines of products, including ‘Skechers GOrun,’ opening of additional Skechers stores and increasing distribution channels with the development of international distribution agreements to improve its sales and profitability.
Skechers reported a loss of 54 cents per share in the fourth quarter of 2011 compared with earnings of 7 cents in the prior-year period. On a reported basis, including one-time items, Skechers delivered a loss of $1.18. The Zacks Consensus Estimate stood at a loss of 23 cents for the quarter.
Moreover, Skechers, which competes withDeckers Outdoor Corporation( ( DECK - Analyst Report ) andNike Inc.( ( NKE - Analyst Report ) , stated that total net sales for the quarter dropped 37.7% to $283.2 million from the prior-year quarter, reflecting lower sales of high-priced toning shoes and sluggish performances across other footwear lines, principally in domestic wholesale business. The reported revenue was well short of the Zacks Consensus Estimate of $322 million.
The company appointed Hirokazu Iwasaki as the new representative director and country manager of Skechers Japan.
Currently, we maintain a long-term Neutral recommendation on the stock. However, Skechers retains a Zacks #5 Rank that translates into a short-term Strong Sell rating.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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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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