Back to top

The Zacks Analyst Blog Highlights: ADP, Estee Lauder, AON, LinkedIn and Humana

Read MoreHide Full Article

For Immediate Release

Chicago, IL – May 7, 2012 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include ADP ( (ADP - Free Report) , Estee Lauder ( (EL - Free Report) , AON ( (AON - Free Report) , LinkedIn ( and Humana Inc. ( (HUM - Free Report) .

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter:

Here are highlights from Friday’s Analyst Blog:

Jobs Report Fails to Settle Debate

The market’s attention today is focused on the home front, with this morning’s weaker-than-expected April non-farm payroll report putting the spotlight on the labor market. This report is in-line with what we saw from ADP ( (ADP - Free Report) on Wednesday and the Bureau of Labor Statistics (BLS) in March, but fails to answer the seasonality vs. fundamental weakness debate going on in the market ever since the March miss.

The government agency announced April non-farm payroll gains of 115K, below expectations of 165K and March’s 154K level. The March tally was revised higher from the original 120K level. The number of job gains in March and February were revised upwards by a combined 53K. Private sector jobs totaled 130K in April, along the lines of what we saw from ADP on Wednesday and in the March reading from BLS.

The unemployment rate, which comes out of the Household survey, dropped to 8.1% from 8.2%. The average workweek remained unchanged at 34.5 hours, while average hourly earnings remained unchanged compared to the 0.2% increase in March. The labor force participation rate, whose low level in this recovery is generally cited by detractors of the down-trending unemployment rate as evidence of discouraged workers, dropped to 63.6% from 63.8% in March.

Today’s report was expected to confirm that the seasonal factors were behind the recent run of soft economic readings, particularly on the labor market front. We did not get evidence of that, which means that we will have to wait longer to get conclusive evidence favoring either side in the ongoing seasonal vs. fundamental debate.

The weekend presidential election in France will likely see the incumbent lose his job and heighten uncertainties about Europe’s ability to come to grips with its problems. But economic reports today show that the region’s economic growth prospects may be weaker than many have been expecting.

The Eurozone PMI readings came out weaker than expected this morning, likely confirming that the region’s economy remained in recessionary territory at the start of the second quarter, the third quarter in a row of negative growth. Lack of growth makes it difficult for the region’s leaders to address its mounting fiscal problems.

The overall tone of recent economic data, including this BLS report, has been very mixed, making it difficult to settle the debate. We got a sharp drop in weekly Jobless Claims, but the BLS and ADP data were disappointing. We got good vehicle sales, solid manufacturing ISM, but the services ISM was on the soft side.

It is difficult to draw firm conclusions from such data. I don’t think this report improves the odds of further Fed QE, but the market has typically been seeing that silver lining in all weak economic readings.

In corporate news, we got better-than-expected earnings from Estee Lauder ( (EL - Free Report) on in-line revenue. AON ( (AON - Free Report) , the insurance broker, missed earnings expectations on in-line revenue. LinkedIn ( posted better-than-expected results after the close on Thursday and announced an acquisition.

Rating Action on Humana

Standard & Poor's Ratings Services (“S&P”) reiterated its long-term counterparty credit rating of ‘BBB’ on Humana Inc. ( (HUM - Free Report) and financial strength rating of ‘A-’ on its subsidiaries. The outlook was also revised to positive from stable.

Concurrently, the rating agency reiterated the financial strength rating of ‘BBB+’ on Kanawha Insurance Co., a wholly owned subsidiary of the company, with a stable outlook.

S&P also upgraded the long-term financial strength ratings at ‘A-’ from ‘BBB+’ on Humana’s health insurance operating subsidiaries based on its group rating methodology.

The upward revision in outlook came on the back of Humana’s improving credit profile given the fast paced growth in the Medicare business. The company has proven its stability based on the steady earnings coupled with a strong capitalization. However, the reimbursement risks related to Medicare Advantage (“MA”) remain a concern.

The rating agency noted that Humana is well equipped to deliver strong fiscal 2012 results, aided by positive demographics of aging baby boomers into the Medicare population. Other factors like increasing penetration into the Medicare market, a large number of people eligible for both Medicare and Medicaid supported by industry consolidation are other positives.

Humana’s income has been aided by relatively lower increase in medical costs together with its constant cost advantage. The bonuses received by the company under the Centers for Medicare & Medicaid Service (CMS) Quality Bonus Demonstration program has done away with lower benchmarks and rebates under the government funding program of MA.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter:

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 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:

About Zacks is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon 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

Visit for information about the performance numbers displayed in this press release.

Follow us on Twitter:

Join us on Facebook:

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.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339

More from Zacks Press Releases

You May Like