For Immediate Release
Chicago, IL – October 4, 2012 – Zacks Equity Research highlights Gap, Inc. (GPS - Analyst Report) as the Bull of the Day and J. C. Penney Company (JCP - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Abaxis, Inc. (ABAX - Analyst Report), MWI Veterinary Supply, Inc. and IDEXX Laboratories, Inc. (IDXX - 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:
Based on strong second-quarter 2012 results, we have upgraded our long-term recommendation on Gap, Inc. (GPS - Analyst Report) to Outperform. Driven by increased sales, improved margins and lower share counts, Gap's earnings of $0.49 per share for the quarter surged 40% from the prior-year period and came ahead of the Zacks Consensus Estimate of $0.48.
Moreover, net sales increased 5.6% to $3,575 million during the quarter, primarily driven by a 4% increase in comparable store sales. Further, solid quarterly performance prompted management to raise its fiscal 2012 earnings guidance range to $1.95-$2.00 per share from $1.78-$1.83 forecasted earlier.
The company is in the midst of its international expansion strategy. Further, to counter the domestic market saturation, Gap is aiming total sales of approximately 30% from its overseas operations and online business by 2013.
Bear of the Day:
J. C. Penney Company (JCP - Analyst Report) posted a second-quarter 2012 loss of $0.37 per share that fared worse than the earnings of $0.19 in the year-ago quarter and the Zacks Consensus Estimate of loss of $0.24. Following disappointing quarterly results, the company hinted that it will not achieve its earlier guidance of $2.16 per share for fiscal 2012. Total revenue also fell 22.6%, whereas comp sales slid 21.7%.
We observe that despite a well-diversified supplier base, the company has been struggling against other retail chains. In order to uplift itself and to become America's favorite store, J. C. Penney announced slew of measures, which include new pricing strategy, fresh logo, strategic merchandise initiatives, cost reduction and enhancement of customers shopping experience.
However, the dismal results dashed those hopes at least for the near term. Moreover, an erratic consumer behavior and a sluggish economic recovery still remain matters of concern. Consequently, we downgrade our recommendation on the stock to Underperform.
Latest Posts on the Zacks Analyst Blog:
Abaxis Inks Deal with MWI Vet
A definitive distribution relationship has been formed between Abaxis, Inc. (ABAX - Analyst Report) – a manufacturer of point-of-care blood analysis systems for medical and veterinary markets – and MWI Veterinary Supply, Inc. , a worldwide distributor of animal health products to veterinarians. Per the deal, effective January 2013, MWI Vet, as a business partner of Abaxis, will be able to store, market and promote the entire veterinary product line of Abaxis in the U.S.
We note that Abaxis’ veterinary instruments cater to a substantial part of the clinical diagnostic requirements of veterinarians and the research marketplace. As per recent data, one third of the North American veterinarians practice working with Abaxis instruments for routine wellness testing and annual check-ups.
We believe that this is a large market with a high potential for growth. An increase in the number of households with pets, enhanced human-animal bonding, aging pet population, more focus on animal health or preventive care, and advancements in pharmaceuticals and diagnostic testing drive increased spending, which in turn is favorable for the company.
Abaxis is performing well in its veterinary division with an expanded product line and a growing direct sales force. The company also intends to introduce more rapid assay of products, which would boost the veterinary revenue. In the previous month, the company launched its new Kidney Profile Plus panel for the treatment of critical and chronic renal diseases in animals, especially in canine, feline and equine species.
Alongside, Abaxis Veterinary Reference Laboratories’ (“AVRL”) performance in the third full quarter of operations complemented growth of the company’s veterinary segment. Abaxis is optimistic about its consistent performance in the veterinary market and expects to maintain this growth momentum in the upcoming quarters.
On the other hand, in a highly fragmented animal health products distribution market, MWI Vet is currently focused on preserving long-term customer relationships as well as building new ones. In August 2012, the company revised its distribution relationship with IDEXX Laboratories, Inc. (IDXX - Analyst Report), per which MWI Vet, as a business partner of IDEXX, will also be able to distribute other competitive diagnostic products.
Other than that, MWI Vet's long term distribution agreements include a 13-year contract with Banfield, the largest private veterinary practice in the U.S. The company also maintains a strong relationship with Feeders' Advantage, a buying group comprising several large cattle feeders in the U.S.
We believe that despite the veterinary market being highly competitive, strong bonding between vendors like Abaxis and distributors like MWI Vet will enable both the companies to achieve robust growth. The companies believe this new venture to significantly add synergies to their individual businesses.
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.
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.
Zacks Investment Research
800-767-3771 ext. 9339