Back to top

Press Releases

For Immediate Release

Chicago, IL – May 15, 2012 – Zacks Equity Research highlights AGCO Corporation ((AGCO - Analyst Report)) as the Bull of the Day and AAR Corporation ((AIR - Analyst Report)) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Viacom (VIAB - Analyst Report), News Corp. (NWSA - Analyst Report) and Time Warner ((TWX - 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:

We reiterate our Outperform recommendation on AGCO Corporation ((AGCO - Analyst Report)) with a target price of $52. The company reported first quarter 2012 earnings of $1.21 per share, exceeding the Zacks Consensus Estimate of $0.86. Total revenues increased 26.5% to $2.27 billion, beating the Zacks Consensus Estimate of $2.08 billion.

The acquisition of GSI will help to place the company in a new market sector and extend its achievement in the agricultural industry. Moreover, it plans to invest in new products to expand its product line. In addition, its strategy of entering the emerging markets of Russia, CIS, China and Africa is slated to achieve significant growth.

Further, the demand for AGCO's products may increase as the U.S. Department of Agriculture expects worldwide corn production to rise 10% to 946 million tons in 2012. We set a 6-month target price of $52 per share, based on a P/E of 9.4x and our fiscal 2012 earnings estimate.

Bear of the Day:

 

We had downgraded our recommendation on AAR Corporation ((AIR - Analyst Report)) from Neutral to Underperform. We have been witnessing an overcapacity in the aerospace market, aggravated by intense competition from the big and small industry players.

Risk of lower military operations, delayed aircraft delivery and unscheduled maintenance inspections raise costs. In addition, inadequate debt financing, unfavorable aircraft lease agreement and currency fluctuations constrain profitability considerably.

The company reported net income per diluted share of $0.50, beating the Zacks Consensus Estimate by a penny. However, our $15.00 target price, 8.2x 2012 EPS, reflects our downgrade in recommendation.

Latest Posts on the Zacks Analyst Blog:

 

Earnings Scorecard: Viacom

 

Following the second quarter earnings announcement on May 3, most of the analysts covering Viacom Inc. (VIAB - Analyst Report) have raised their estimates mainly based on the huge number of movies slated to release in 2012 coupled with improved advertising spending in the U.S. due to the upcoming presidential election to be held in 2012.

Second Quarter Highlights

Net income from continuing operations in the quarter was $588 million or $1.08 per share compared with $376 million or 63 cents per share in the comparable prior-year quarter. Adjusted EPS of 98 cents was also above the Zacks Consensus Estimate of 90 cents.

Total revenue in the reported quarter was $3,331 million, up 2% year over year and also beat the Zacks Consensus Estimate of $3,317 million. The year-over-year upside in revenue was mainly attributable to the strong performance of the Media Networks affiliated revenue segments. Quarterly operating income was $932 million, up 22.6% year over year.

Agreements of Analysts

Although most analysts are positive for 2012, out of the 24 analysts covering the stock in the last 7 days, none raised estimates for the third quarter of 2012 but eight analysts reduced the same. For the fourth quarter of 2012, seven analysts have raised the EPS estimate but only one analyst slashed the estimate over the last 7 days.

For fiscal 2012, out of the 28 analysts, eight analysts increased the estimates while none reduced the same. However, for 2013, out of the 27 analysts, four analysts revised the estimate upward while two moved in the opposite direction.

Currently, the Zacks Consensus EPS Estimate for the second quarter of 2012 is pegged at $1.03. The projected annual growth rate is 4.08%. Similarly, for the third quarter, the current Zacks Consensus EPS Estimate of $1.24 reflects a year-over-year gain of 16.86%.

Magnitude of Estimate Revisions

Over the last 7 days, the Zacks Consensus Estimate for the third quarter of 2012 dropped 4 cents from the earlier estimate of $1.07. However, for the fourth quarter of fiscal 2012, the Zacks Consensus Estimate was 2 cents above the earlier estimate of $1.22.

For fiscal 2012, the estimate went 2 cents above the previous estimate of $4.27 in the last 7 days, while in fiscal 2013, it was in line with the prior estimate of $4.99.

Earnings Surprises

Over the last four quarters, Viacom has outdone the Zacks Consensus Estimate by an average of 7.22%. In the last quarter, the company produced an earnings surprise of 8 cents or 8.89%.

The current Zacks Consensus Estimate for the third and fourth quarters of 2012 reflect 0.00% earning surprise (indicating that the company should report in line with estimates in both quarters).

Fiscal 2012 should also show an earnings surprise of 0.00% but fiscal 2013 has a downside risk of 0.60%.

Our Recommendation

We believe that Viacom is well positioned for long-term growth as it continues to benefit from its predominately cable networks-based business model, strong affiliate fee revenue growth, global brands, strong share repurchase plan, multi-platform content and the fact that it is a player in one of the fastest-growing markets (traditional ad media).

However, stiff competition from other media companies like News Corp. (NWSA - Analyst Report) and Time Warner Inc. ((TWX - Analyst Report)) along with slow economic recovery may act as headwinds for the stock going forward. We, therefore, maintain our long-term Neutral recommendation on Viacom.

 

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.

 

About the Analyst Blog

 

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.

 

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

 

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=7158.

 

About Zacks

 

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment

Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.

 

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

 

Follow us on Twitter:  http://twitter.com/zacksresearch

 

Join us on Facebook:  http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

 

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

 

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%