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For Immediate Release
Chicago, IL – June 28, 2012 – Zacks Equity Research highlights Hain Celestial Group (HAIN - Analyst Report) as the Bull of the Day and Liberty Global, Inc. (LBTYA - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Apple Inc. (AAPL - Analyst Report), Google Inc. (GOOG - Analyst Report) and Amazon.com Inc. (AMZN - 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:
A leader in natural food and personal care products with an array of well-known brands, Hain Celestial Group (HAIN - Analyst Report) offers investors one of the strongest growth profiles in the industry. The company's strategic investments plus continued efforts to contain costs, increase productivity and enhance cash flows and margins, have enabled it to deliver healthy results. This is evident from Hain's third-quarter 2012.
Quarterly earnings of $0.54 per share beat the Zacks Consensus Estimate of $0.50, and rose 50% from the prior-year quarter. The company's top line also grew an impressive 31.5%. The better-than-expected result prompted management to raise fiscal 2012 earnings guidance to a range of $1.76 to $1.80 per share. Total sales are now projected between $1.40 billion and $1.41 billion for the year.
Acquisitions have been also a key part of the company's strategy to build market share. Buoyed by better-than-expected results and an optimistic outlook, we upgrade our recommendation on the stock to Outperform.
We had downgraded our recommendation on Liberty Global, Inc. (LBTYA - Analyst Report) to Underperform based on two factors (1) an extremely high-level of current valuation of the company, and (2) precipitous macro-economic fluctuations in the European region, which is the core business area of the company.
Liberty Global reported mixed financial results for the first quarter of 2012. Though revenue beats the Zacks Consensus Estimate, net income fell below it. Moreover, business integration risks persist as Liberty Global has recently acquired several related businesses.
With respect to our fiscal 2013 earnings estimate, the stock is trading at 22.4x, a huge premium to both the S&P 500 average and the industry average. We believe the stock is currently overpriced and thus downgrade our rating to Underperform with a target price of $42, based on 35.6x our fiscal 2012 earnings estimate.
Latest Posts on the Zacks Analyst Blog:
California Judge Sides with Apple
U.S. District Judge Lucy Koh in San Jose, California sided with Apple Inc. (AAPL - Analyst Report), imposing a ban on Samsung’s Galaxy Tab 10.1 range of tablets in the country, reported Bloomberg. An earlier ruling in May by the U.S. Court of Appeals for the Federal Circuit favoring the iPad maker related to patent infringements paved the way for the recent ban.
Ruling in favor of Apple, Judge Lucy Koh stated that the Cupertino-based company had a strong case against Samsung in the design-related patent case. The judge also noted that Apple would be "irreparably harmed" if the ban against Galaxy 10.1 tablets was not imposed as the design of iPad and Galaxy 10.1 tabs are indistinguishable.
However, the judge also said that Samsung can contest the aforesaid ban. Apple was ordered to post a $2.6 million bond as damage payment to Samsung if the former loses the case. The trial starts on July 30.
In December last year, Apple had appealed to the District Court in San Jose to ban Samsung’s Galaxy Tab in the U.S. However, the plea was rejected at the time, with the court allowing Samsung to sell its products in the country until the case went to trial.
By banning Samsung tablets in different countries, Apple’s main objective is to stall the growth of Google Inc.’s (GOOG - Analyst Report) Android OS. Samsung is leveraging on Android to emerge as one of Apple’s most significant competitors and the company is already the largest vendor of Android-based products. The fact that Android is expected to continue its strong growth all over the world is a major headache for Apple. Adding to the competition, Google has plans to unveil its first tablet at its Google I/O conference, according to Bloomberg.
Despite the threat from Android and lower-than-expected sales in the tablet market, Apple has maintained its leading position in this arena with 68% market share in the first quarter of 2012, which rose significantly from 55% in the fourth quarter of 2011, according to IDC. Samsung came in second while Amazon.com Inc. (AMZN - Analyst Report) was third.
Over the last couple of years, Apple has been highly vocal about saving its intellectual property from misuse and violations. The company has been aggressive in filing lawsuits against other handset makers such as Samsung and HTC, in order to protect its patents where Apple has accused these manufacturers of blatantly copying its iPhone and iPad designs.
So far, these lawsuits have yielded mixed results for Apple. Although it won some cases against Samsung, Apple has lost a couple against Motorola recently.
We believe that Apple remains the biggest growth story based on its product pipeline, popular apps, iCloud, iPhone 4S, the new iPad, Apple TV, and loyal customer base. With a solid balance sheet and robust revenues, we expect Apple to outperform its peers in the long run.
We maintain our Outperform recommendation over the long term (6-12 months). Currently, Apple has a Zacks #3 Rank, which implies a Hold rating in the near term.
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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