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For Immediate Release
Chicago, IL – November 7, 2012 – Zacks Equity Research highlights Allstate Corp. (ALL - Analyst Report) as the Bull of the Day and E.I. DuPont de Nemours & Co. (DD - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Microsoft Corp. (MSFT - Analyst Report), Google and Apple (AAPL - 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 have upgraded our recommendation on Allstate Corp. (ALL - Analyst Report) to Outperform based on significant reduction in catastrophe losses, claims and operating expenses coupled with enhanced premiums that improved the combined ratio, ROE and book value per share so far in 2012. Also, these factors aided the company's second quarter earnings upbeat, substantially outpacing the Zacks Consensus Estimate.
An appreciated investment portfolio boosted the operating cash flow and liquidity. The agency expansions, ratings affirmation, dividend increment, product restructuring and acquisitions validate Allstate's long-term stability. However, initiatives to improve auto and homeowners margins are yet to show effective results, whereas interest volatility poses risks to Allstate Financial's margins.
Though the current volatile economy will continue to impact results, continued synergies are expected from Allstate's industry-leading position, diversification and pricing discipline. All these should augur growth once the markets regain momentum.
Bear of the Day:
We are downgrading our recommendation on E.I. DuPont de Nemours & Co. (DD - Analyst Report) to Underperform following its lackluster third quarter results. Both revenues and adjusted earnings missed the Zacks Consensus Estimate.
Profit tumbled year over year due to lower demand across titanium dioxide and photovoltaic markets. DuPont witnessed weakness across a number of end markets in the quarter. The company reduced its earnings forecast for 2012 and announced a restructuring plan that includes headcount reductions.
DuPont is exposed to raw material cost inflation and currency headwinds and is witnessing a decline in sales volumes across many segments. Moreover, sluggish economic conditions may continue to dent its results going forward.
Latest Posts on the Zacks Analyst Blog:
Microsoft Expands in China
Microsoft Corp. (MSFT - Analyst Report) recently announced the expansion of its data center and the Internet-based version of its Office software suite in China to meet the fast-growing demand for Internet usage and data storage capacity in the country.
In order to sell its services in China, Microsoft has signed a licensing agreement with Beijing-based 21Vianet Group Inc., which will operate the data centers and cloud services in the country.
By using Office 365, customers can gain online access to Microsoft’s word processing, spreadsheet and email programs. Windows Azure will enable users to customize online applications and store data on Microsoft’s remote computers.
A recent survey conducted by a data center dedicated website, datacenterdynamics.com, on 100,000 facilities shows that data center usage is expected to grow around 7% in 2012. Moreover, the website has also increased its investment projection for new data centers from about $30.0 billion in 2010-11 to $35.0 billion in 2011-2012.
In a bid to benefit from the growing Chinese market, Microsoft is increasing its investment in the country, expecting to sell more services to Chinese companies and government agencies.
Recently, Microsoft hired more than 1,000 employees in China across its research and development (R&D) and marketing segments. The company plans to boost its R&D spend by 15% annually. Microsoft is also building a large cloud computing center in Shanghai that will employ around 600 more employees.
Currently, Google’s mobile operating system, Android dominates the Chinese smartphone market, with Apple's (AAPL - Analyst Report) iPhone dominating the higher end of the market. Both the technology companies, Apple and Google have already launched new products in the Chinese market, increasing their market share. Microsoft’s position in the mobile segment remains weak, although Windows 8 could improve the situation. In the meantime, Microsoft continues to solidify its position in other segments, such as the cloud, where its offerings make it one of the most reliable suppliers.
We believe that Microsoft’s current investments are supported by its strong balance sheet and expect these to drive the next growth phase, improving prospects of market share gains.
Microsoft Corp. has a Zacks #3 Rank, which implies a Hold rating in the short term (1-3 months).
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.
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