For Immediate Release
Chicago, IL – May 10, 2012 – Zacks Equity Research highlights AMERCO, Inc. as the Bull of the Day and AGL Resources, Inc. as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Morgan Stanley (MS - Free Report) , Prudential Financial Inc. (PRU - Free Report) and MetLife Inc. (MET - Free Report) .
Full analysis of all these stocks is available at https://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Bull of the Day:
AMERCO, Inc. is the parent company of U-Haul International, the world's largest consumer truck rental company. It is also the second largest self-storage company in North America.
The impact of the decline in housing and a decrease in apartment occupancy rates appears to have ended. We expect continued improvements in operating parameters. Our recommendation continues as Outperform, with a price target of $110 a share.
Based on our estimates for the next four quarters' EBITDAL of $40 a share, we would expect a price range of $95 to $125. The stock has reached our low end target price and we continue to rank the stock Outperform.
Bear of the Day:
We are maintaining our Underperform recommendation on AGL Resources, Inc. with a target price of $35. We expect shareholder sentiment toward the company to remain lukewarm, considering its investment in higher-risk unregulated operations, ongoing regulatory uncertainties and the challenging economic environment.
AGL's earnings are likely to suffer in 2012 due to a less-than-favorable outlook at its wholesale segment. Additionally, the inclusion of the shipping operations (post Nicor acquisition) has left AGL with a weak business, thereby heightening its risk profile. Partially offsetting these negatives are the company's large and stable customer profile, consistent dividend growth and strong liquidity position.
Considering these factors, we see little reason for investors to own the stock and therefore maintain our Underperform recommendation. Our $35 price objective reflects a 2012 P/E multiple of 12.7x.
Latest Posts on the Zacks Analyst Blog:
Morgan Stanley in New Mortgage Mess
Allegations against Morgan Stanley (MS - Free Report) over the sale of mortgage-backed securities are far from over. Recently, one of the top U.S. life insurers, Prudential Financial Inc. (PRU - Free Report) , has brought up charges against Morgan Stanley for the sale of $1 billion in residential mortgage-backed securities that the former had bought, according to a Bloomberg report.
The company has been accused of making false statements as well as omitting material facts prior to Prudential’s purchase of the residential mortgage-backed securities which were issued with 41 mortgage-loan securitizations between July 2004 and August 2007.
Prudential alleged that Morgan Stanley had wrongfully asserted that underwriting standards for the mortgages were met and home loans were lawfully assessed. However, a significant part of the mortgage loans, which backed those securities defaulted, were foreclosed or became delinquent.
As a result, the value of these securities plummeted and Prudential incurred significant losses on its investments in such securities which exceeded $350 million. Prudential is claiming for both compensatory as well as punitive damages.
Morgan Stanley has encountered similar allegations in the recent past. The company has faced lawsuits from companies such as Asset Management Fund and MetLife Inc. (MET - Free Report) which accused Morgan Stanley of fraudulent activities including misrepresentation of facts over the sale of securities.
Asset Management Fund has sued the company over its $122.4 million purchase of residential mortgage backed securities. On the other hand, MetLife has brought forth charges against Morgan Stanley over its acquisition of $757 million in residential mortgage-backed securities in 2006 and 2007.
Moreover, in April, Morgan Stanley has been asked by the Federal Reserve to review the foreclosures made by Saxon mortgage servicer prior to the unit’s sale and subsequently reimburse the affected borrowers.
The role of residential mortgage backed securities behind the recent financial crisis and the fraudulent activities related to the sale of such instruments have been severely criticized. In fact, several of the Wall Street biggies are stuck with similar allegations. Their code of conduct with respect to the sale of such instruments has been questioned.
We believe that these lawsuits further increase the company’s litigation risk and also represent a threat to scathe the company’s financials to some extent. However, if proved or settled, the investors can breathe some relief.
Currently, the shares of Morgan Stanley have a Zacks #3 Rank, which translates into a short-term Hold rating. Additionally, considering the fundamentals we maintain our long-term Neutral recommendation on the stock.
Get the full analysis of all these stocks by going to https://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 https://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 https://at.zacks.com/?id=4582.
Visit https://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