For Immediate Release
Chicago, IL – November 19, 2012 – Zacks Equity Research highlights Valmont Industries, Inc. (VMI - Analyst Report) as the Bull of the Day and Johnson Controls Inc. (JCI - Analyst Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Rockwell Collins Inc. (COL - Analyst Report), The Boeing Company (BA - Analyst Report) and Honeywell International Inc. (HON - 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 are retaining our Outperform recommendation on Valmont Industries, Inc. (VMI - Analyst Report). Third quarter earnings topped the Zacks Consensus Estimate while sales missed. Profit jumped nearly 35% year over year, boosted by a solid performance in the company's Utility Support Structures division.
Moving ahead, the company expects healthy demand for irrigation equipment from farmers in the fourth quarter. Valmont is witnessing significant strength across the utility and irrigation markets.
The company expects to post double-digit earnings growth in 2012 despite the European slowdown. The outlook for irrigation equipment is strong while demand for Utility Support Structures is expected to rise. Healthy order activity and a growing backlog support expectations for a strong full-year 2012.
Bear of the Day:
Johnson Controls Inc. (JCI - Analyst Report) is a leading supplier of automotive interiors, batteries and other control equipment. Although the company posted a marginal 1.3% rise in earnings per share in its fiscal fourth quarter, it expects a year-over-year decline in earnings in the first half of fiscal 2013.
This expected decline is due to weak end-markets and adverse effects of foreign currency. We are also concerned about pricing pressure from OEMs and strong competition faced by the company. These factors have led us to maintain our Underperform recommendation on the stock with a target price of $23.00.
The current P/E, which is close to the lower-end of the historical range, is at a 15% discount to the peer group for 2013. Our $23.00 target price, 8.8X 2013 EPS, reflects our Underperform view.
Latest Posts on the Zacks Analyst Blog:
Collins Supplies Boeing’s 737 MAX
Rockwell Collins Inc. (COL - Analyst Report) received a contract from The Boeing Company (BA - Analyst Report) to supply large-format flight displays as standard equipment for Boeing 737 MAX flight deck.
Rockwell will provide four configurable 15.1-inch landscape LCD displays for the new jet's flight deck, which will enhance situational awareness and efficiency of the aircraft. Currently, Rockwell supplies these displays to Boeing for its 787 Dreamliner and KC-46 Tanker. Moreover, Boeing also intends to use these standard equipments for its existing 757 and 767 aircrafts.
Boeing has also chosen Honeywell International Inc. (HON - Analyst Report) for the supply of an electronic bleed air system that keeps in control the cabin pressure and helps in getting ice off the wings.
The company expects the first delivery of Boeing 737 MAX aircraft with Rockwell Collins’ flight displays in 2017. Boeing is currently producing 35 737 jets per month. The company plans to increase the production rate to 38 airplanes per month beginning in 2013 and 42 airplanes per month beginning in 2014. Currently, Boeing has more than 900 orders for the 737 MAX.
Based in Cedar Rapids, Iowa, Rockwell Collins designs, manufactures, and supports software and hardware solutions for aircraft communication, navigation, signals intelligence, and weapons systems as well as surveillance systems. Going forward, Rockwell will benefit with the increase in the number of orders for 737 MAX.
Recently in October, Rockwell Collins Inc. reported fourth quarter fiscal 2012 earnings results ending September 30, 2012. The company reported adjusted earnings per share of $1.32, beating the Zacks Consensus Estimate of $1.09 for the quarter. Earnings were up 17.0% year over year. During the quarter, sales related to aircraft original equipment manufacturers were up 15% year over year to $307 million driven by increased sales of Airbus and Boeing, resulting from higher production rates of the 787, 737 and A320 aircrafts.
Rockwell Collins is the foremost global supplier of communications and avionics equipment for both commercial and military customers. The company’s balanced exposure to both types of customers allows the company to use government funding to develop products for the dual-end market.
However, we expect growth of the business aviation market to be hampered by slower global economic recovery. The company presently retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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