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The Zacks Analyst Blog Highlights: Cabela's, Wal-Mart Stores, Target, MAA and UDR

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For Immediate Release

Chicago, IL – July 26, 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 Cabela's Inc. , Wal-Mart Stores Inc. (WMT - Free Report) , Target Corporation (TGT - Free Report) , MAA (MAA - Free Report) and UDR, Inc. (UDR - Free Report) .


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Here are highlights from Wednesday’s Analyst Blog:


Earnings Preview: Cabela's

Cabela's Inc. , one of the leading specialty retailers and direct marketers of hunting, fishing, camping, and related outdoor merchandise, is set to release its second-quarter 2012 financial results on Thursday, July 26, 2012.


The current Zacks Consensus Estimate for the quarter stands at 39 cents per share, indicating an estimated year-over-year increase of 21.9%. Revenue, as per the Zacks Consensus Estimate, is pegged at $604 million.


First-Quarter Recap


Cabela's delivered solid first-quarter 2012 results, based on healthy performance at retail stores, strong growth at the financial services division, elevated merchandise gross margin and lower expenses. Quarterly earnings of 40 cents a share exceeded the Zacks Consensus Estimate of 33 cents and jumped 60% from 25 cents earned in the prior-year quarter.


Total revenue, comprising retail, direct and financial services revenues, increased 6.3% year over year to $623.5 million and surpassed the Zacks Consensus Estimate of $621 million.


Merchandise gross margin expanded 150 basis points to 34.5% during the quarter. Management reiterated its long-term goal of increasing the margin by 200–300 basis points.


Agreement of Estimate Revision


For the to-be-reported quarter, the earnings estimates have remained almost unchanged with only two out of nine estimates raised over the past 30 days, while no revisions were made in the past 7 days. Moreover, for fiscal 2012, the estimates witnessed minimal revision, as only one out of nine estimates moved upwards in the last 30 days. Again estimates remained unchanged in the last 7 days.


Magnitude of Estimate Revision


Due to the lack of catalysts impacting the estimates directly or indirectly, most of the analysts maintained their view. Consequently, the Zacks Consensus Estimate remains unchanged for the second-quarter of 2012 at 39 cents over the last 7 or 30 days.


Positive Earnings Surprise History


With respect to earnings surprises, Cabela's has topped the Zacks Consensus Estimate over the last four quarters in the range of 7.1% to 21.2%, with the average at 15.1%. Looking at the past performances, we expect Cabela’s to outperform in the coming quarters.




Cabela's next generation store format, multi-channel strategy and seasonal product assortments enable it to focus on increasing its stores’ productivity and sales per square foot while lowering labor costs.


Cabela's multi-channel model facilitates consumers to purchase directly from retail stores or order products through catalog and Internet channels, and have them delivered to the retail store of their choice, without incurring shipping costs. This multi-channel approach gives the company an advantage over its competitors.


In order to capitalize on the under-penetrated markets, the company unveiled its new ‘Outpost’ store format spanning 40,000 square feet that adopts a "core-flex" merchandise strategy (selected core assortment of products and flexible seasonal merchandise).


Based on sturdy balance sheet, feasible strategy and operating efficiencies, Cabela's, which competes with Wal-Mart Stores Inc. (WMT - Free Report) and Target Corporation (TGT - Free Report) , carries a Zacks #2 Rank implying short-term Buy rating, and we maintain our long-term Outperform recommendation on the stock.

MAA on ATL Acquisition Spree

MAA (MAA - Free Report) , an apartment-only real estate investment trust (REIT), has recently completed the acquisition of Allure at Brookwood – a 349-unit premium multifamily apartment community in Atlanta, Georgia – from an unnamed seller for an undisclosed price.

Despite having several properties listed as ‘held for sale’ in the Atlanta market, MAA has acquired a couple of properties in the region, the latest being Allure in Buckhead Village in May 2012. The string of acquisitions signifies the inherent high quality of each asset and superior demographics, which the company believes would drive solid return on investments going forward.

Developed in 2008, Allure at Brookwood is strategically located in the Buckhead sub-market of Atlanta, regarded as one of the leading mixed-use development areas of the country. In addition, the property is placed in the midst of the largest office submarkets of the region including Midtown, Buckhead, and Central Perimeter, which on an aggregate span over 50 million square feet of office space. The apartment community is also located in close proximity to several major medical employment centers of the region.

Besides its locational advantage, the property offers luxury amenities such as a resort-style pool, fitness center and outdoor kitchen. Consequently, the acquisition offers unmatched revenue generating options for the company, and even provides an opportunity to command premium rents despite a challenging macroeconomic environment.  

Since its inception in 1994, MAA has evolved as a publicly owned company from a portfolio of 6,000 apartments in the Mid-South area to a portfolio of 49,094 high-quality apartment homes spread across the Sunbelt region of the U.S.

The company typically divides its portfolio in two tiers – larger primary markets and lower population secondary markets. Secondary markets often have stable fundamentals due to limited new supply. Having a diversified presence in different types of markets helps mitigate risk and decreases volatility in the event of a slowdown in any one product type.

MAA’s diversified market profile with its focus on solid employment markets of the Sunbelt region across both the high-growth primary markets and the less cyclical secondary markets provides a stable earnings platform for the company.

With new supply remaining muted until late 2013 or 2014, we expect the multifamily sector to remain comparatively stable in the coming quarters, as renting has emerged as the only viable option for customers who could not get mortgage loans or are unwilling to buy a house at present.

We maintain our Neutral recommendation on MAA, which presently has a Zacks #3 Rank that translates into a short-term Hold rating. We also have a Neutral recommendation and a Zacks #3 Rank for UDR, Inc. (UDR - Free Report) , one of the competitors of MAA.




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