For Immediate Release
Chicago, IL – March 23, 2012 – Zacks Equity Research highlights Discover Financial Services (DFS - Analyst Report) as the Bull of the Day and Excel Maritime Carriers as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Wal-Mart Stores, Inc. (WMT - Analyst Report), Barnes & Noble Inc. and Target Corp. (TGT - 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:
Discover Financial Services' (DFS - Analyst Report) first quarter earnings was substantially ahead of the Zacks Consensus Estimate on higher transaction and credit card sales volumes and lower loan loss provisions, along with record-low delinquency and charge-off rates. Higher consumer spending and merchant acceptance contributed to the substantial expansion of income across segments.
Additionally, a dividend increase and share buyback have also injected optimism. The company has a strong inorganic growth policy, which apart from boosting earnings also fosters portfolio diversification.
The company's extensive network, sound capital position, rapidly expanding acceptances and cost containment initiatives will help accentuate growth over the long term. Our six-month target price of $38.00 equates to 10.6x our earnings estimate for 2012. Given the annual cash dividend of $0.40, this price target implies an expected total return of 20.7% over that period.
Bear of the Day:
We downgrade our recommendation on Excel Maritime Carriers to Underperform ahead of its fourth quarter of 2011 financial results. We believe the drybulk shipping industry has a gloomy outlook, facing serious challenges since spot vessel rates collapsed significantly.
The sole reason for this dismal condition is the sheer increase of newbuild ships under operation, which resulted in intense price competition. The spot rates of drybulk vessels have fallen to such low levels that even surging commodity prices in the Asian markets have failed to offset the loss of the vessel owners. We believe continuation of this pricing trend will certainly jeopardize the company's future financials.
In the last couple of quarters, Excel Maritime took a severe hit on its time charter equivalent rate. Additionally, its balance sheet is highly leveraged. We do not find any near-term catalyst.
Latest Posts on the Zacks Analyst Blog:
Wal-Mart to Lure Angry Birds Fans
Finland based Rovio Entertainment Ltd., the maker of Angry Birds mobile game has joined hands with retail giant Wal-Mart Stores, Inc. (WMT - Analyst Report) to bring the popular game to its stores and on its facebook site.
Cashing in on the popularity of the mobile game, Wal-Mart will provide its customers access of the four special clues to clear the bonus levels of the latest version of the game - Angry Birds Space.
Wal-Mart has started offering the first of the four ‘Golden Eggsteroid’ clues to its Facebook fans on its company’s site. The remaining three clues will be embedded in Wal-Mart’s Angry Birds merchandise, which will be available in Wal-Mart stores from March 25. Wal-Mart stores will exclusively sell these limited-edition T-shirts, toys, mobile phones, snacks and other apparels from where the users can get their hidden clues to unlock the bonus levels of Angry Birds Space.
Wal-Mart’s agreement with Rovio has given the latter a push into the wide US markets with Wal-Mart’s more than 3,000 stores. This has also given opportunity to Wal-Mart to attract Angry Birds fans and provide its customers with both online and in-store gaming experience.
According to Reuters, Rovio has also partnered with bookseller Barnes & Noble Inc. whereby the 691 Barnes & Noble bookstores across US will sell Angry Birds merchandises. The customers can purchase these products and earn game credits. .
In mid-March, Wal-Mart has teamed up with movie studios and unveiled an in-store service to allow consumers to convert their DVDs and Blu-ray discs into digital movies in order to boost up the value of movie ownership for its customers. The service will start from April 16, and Wal-Mart will offer this service at 3,500 of its stores at only $2 for the conversion of standard DVDs and Blu-ray discs and $5 for any up gradation of standard DVDs to High-Definition.
Wal-Mart, which competes with Target Corp. (TGT - Analyst Report), currently holds a Zacks #3 Rank (short-term Hold rating). Over the long-term, we provide a Neutral 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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