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Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all five stocks:
Bull of the Day:
Given its robust business model, aggressive cost-cutting measures and new business initiatives, we expect NCR Corporation (NYSE: NCR | Quote | Chart | News | PowerRating) to resume growth across segments later this year. This should be sustainable for the foreseeable future as its customers seek to cut costs through increased automation.
However, NCR experienced a significant drop off in business activity in the retail segment in the second half of 2008 as well as in the first quarter of 2009. The new offer worth $13.0 million from Georgia state, coupled with a new facility addition in Brazil will help the company going forward.
Meanwhile, the company has a sound balance sheet and generated moderate cash flows in Q1. We maintain our Buy rating on NCR shares but increase our six-month price target to $14.00, after factoring in the economic environment.
Bear of the Day:
Management at Rite Aid Corporation (NYSE: RAD | Quote | Chart | News | PowerRating) was executing a turnaround strategy centered on increasing the profitability of the existing store base.
However, the acquisition of Brooks Eckerd prior to a convincing turnaround in profitability has increased the debt burden and interest expense. Moreover, Wal-Mart's foray into the retail generic drug market has pressured the company's pharmacy margin.
Given the weakness of front-end sales, especially in the past fiscal year, and management's continual lowering of EPS guidance (for larger net losses), the stock's rating is a Sell.
Latest Posts on the Zacks Analyst Blog:
Some Dividends Up in Consumer Goods
Despite the S&P 500 rallying 36.2% from the low close on March 9th (676.53), the market is still down 41.1% from the closing high on October 9, 2007 (1,565.15). The global economic slowdown is negatively impacting the earnings and cash flow of many companies.
However, some companies still have strong cash flow and their Boards are sufficiently confident in the future to raise the dividend.
An announcement concerning an increased dividend in the current environment has positive implications for both the company's equity and bonds. In the Consumer Staples sector, four companies have announced an increase in the quarterly dividend in the last three months. Previously in April, we had mentioned that Avon Products (NYSE: AVP), Kimberly-Clark (NYSE: KMB | Quote | Chart | News | PowerRating) and Pepsi Bottling Group (NYSE: PBG | Quote | Chart | News | PowerRating) had announced dividend increases between January and March 2009.
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 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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Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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.
SOURCE: Zacks.com
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