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Zacks Bull and Bear of the Day Highlights: Weyerhaeuser, NYSE Euronext, Brinker International, Darden Restaurants and Ruby Tuesday

WY EAT DRI RT

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For Immediate Release

Chicago, IL – November 21, 2012 – Zacks Equity Research highlights Weyerhaeuser Co. (WY - Analyst Report) as the Bull of the Day and NYSE Euronext, Inc.'s as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Brinker International, Inc. (EAT - Analyst Report)), Darden Restaurants Inc. (DRI - Analyst Report)) and Ruby Tuesday Inc. (RT - Snapshot 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 Weyerhaeuser Co. (WY - Analyst Report) from Neutral to Outperform based on the high growth the company has achieved, reducing total costs and increasing prices. Also, the company is making an earnest effort to reduce its debt and maintain a healthy debt to equity ratio.

The company's earnings increased a whopping 83% year over year in the third quarter to $0.22 per share. The sales also soared 12.9% year over year to $1,772 million. Operating profits escalated 102% and long-term debt decreased 7.9% year over year. Backlog for Real Estate remains solid.

Our long-term Outperform recommendation on the stock indicates that it will beat the broader U.S. market over the next six to twelve months. Our target price is $32.00 based on 2012 P/E of 68.1x.

 

Bear of the Day:

 

NYSE Euronext, Inc.'s third quarter earnings breezed past the Zacks Consensus Estimate but plunged year over year based on weak volumes and pricing across trading venues, which led to a reduced top line and lower operating margin. A low cash position and high debt raised the concerns of rating agencies.

NYSE has a bigger debt burden compared to its prime peers, which poses a competitive threat to the fundamental growth of the company. Higher debt and lower working capital in the first half of 2012 also impelled ratings agency S&P to downgrade its outlook to negative from stable, in August 2012.

Our six-month target price of $22.00 equates to about 11.7x our earnings estimate for 2012. With an annual dividend of $1.20, this price target implies a negative total return of 6.9% over that period. This is consistent with our long-term Underperform recommendation on the shares.  

 

Latest Posts on the Zacks Analyst Blog:

 

CEO Transition for Brinker

 

Doug Brooks, the Chief Executive Officer (CEO) and President of Brinker International, Inc. (EAT - Analyst Report) recently announced his intention to step down from the post effective December 31, 2012. Concurrently, the company also announced Wyman Roberts as his successor, who will take over the reins effectively from January 1, 2013.

Doug Brooks joined Brinker 35 years ago as a manager. His tenure oversaw the increase from a modest three restaurants in one state to 1,585 restaurants globally, generating around $2.8 billion of revenue annually. To ensure a successful transition of leadership to Roberts, Brooks will continue to serve as chairman of the board of the company through December 2013.

Wyman Roberts has been associated with Brinker since August 2005. Currently, he is the President of Brinker’s brand Chili's Grill & Bar. However, he will retain this position along with the new responsibilities. He has previously served Brinker as Chief Marketing Officer and President of Maggiano's Little Italy brand.

Prior to joining Brinker, Roberts served NBC’s Universal Parks & Resorts as Executive VP and CMO and contributed to growth of the company’s market share and revenues. Apart from this, he has held several senior level positions over 17 years at Brinker’s peer company – Darden Restaurants Inc. (DRI - Analyst Report).

With his vast know-how and expertise over 20 years in the restaurant industry, Roberts can easily be tagged as a veteran in this sector. With  proven strategy development, operation, finance and brand building background, we expect him to provide meaningful support to Brinker. Roberts' contribution to growth of Chili's Grill & Bar has been noteworthy. Total sales at Chili's Grill & Bar restaurant surged 2.7% year over year in the most recent quarter and comparable restaurant sales at the brand climbed up 2.8% for the sixth consecutive quarter.

As a point of reference, several restaurant peers of Brinker have recently seen significant management changes. The founder and CEO of Ruby Tuesday Inc. (RT - Snapshot Report), Sandy Beall, announced his intention to bow out from management and the Board.

 

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.

 

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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.

 

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