For Immediate Release
Chicago, IL – November 9, 2010 – Zacks Equity Research highlights: EI DuPont de Nemours & Co. (DD) as the Bull of the Day and Monsanto Company (MON) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Manpower (MAN), Apple, Inc. (AAPL) and JPMorgan Chase & Co. (JPM).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506.
Here is a synopsis of all five stocks:
Bull of the Day:
EI DuPont de Nemours & Co. (DD) is focused on capturing $1 billion in working capital productivity gains during 2011-2013. The company is also on track to achieve a combined $600 million in benefits from fixed cost productivity and restructuring actions.
DuPont is executing strategies for further development and growth of new products, particularly for agriculture, photovoltaics, alternative energy and materials. Furthermore, the company's focus on the emerging markets, along with a strong performance in the Agriculture & Nutrition segment, are expected to generate top-line growth in the future.
Along with upward estimate revisions by analysts, these factors have led us to upgrade our recommendation from Neutral to Outperform with a target price of $56.
Bear of the Day:
We reiterate our Underperform recommendation on Monsanto Company (MON) based on low visibility on the yield performance of SmartStax seed in the coming years. Based on concerns regarding the performance of SmartStax seed, estimates have gone down by 6 cents and 14 cents for fiscal 2011 and 2012, respectively.
Monsanto continued to post weak results for fiscal 2010 with an EPS of $2.41, almost half its $4.41 in fiscal 2009 due to the decrease in the prices of Roundup herbicides. The increase in cost and expense was the icing on the cake.
Further, a slower market recovery and an intensely competitive environment posts additional challenges for the company. Thus, our Underperform recommendation on the stock indicates that it would perform below the broader market. Our $53.00 target price, 18.9x 2011 EPS, reflects this view.
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Past the Turbulence, Where To Now?
Like the Chinese curse says: may you live in interesting times.
For now it seems as if the major macroeconomic and socio-political obstacles have been navigated, for better or worse, but the hugest of these issues -- from the Wall Street bailout to the failure of the Greek economy -- have put massive pressures on trading markets both up and down, both in the U.S. and around the world, for the past couple years.
Following the two most recent pieces of big news -- the GOP recapturing the House of Representatives and the Fed's announced $600 billion in quantitative easing (QE2), both of which analysts seem to agree reflect positively on Wall Street -- it feels as if we may be in for a breather. But does this mean after two years of heavy turbulence we can expect to float along at current levels?
If not, what can be seen as potential upward or downward pressure on the markets going forward? Even more importantly, how can the individual investor profit from a little forethought at this stage? After all, we are currently trading around the highs reached back in April of this year, before the world thought Europe was about to crumble into the Mediterranean. So where to now?
Stock Plays for This Environment
One place to start would be to look at our stubbornly consistent slow economic growth and high unemployment levels. While GDP chugs along modestly in the low single-digits, unemployment continues to threaten the 10% mark each month.
Thus, a company like Manpower (MAN) warrants serious consideration. Companies in need of additional work resources who are not yet confident enough in the economy to take on more full-time employees often turn to temp service agencies, and Manpower is a market leader. The stock has had a Zacks #1 Rank (Strong Buy rating) since October 23rd, and 12 of the 13 analysts covering Manpower have upwardly revised earnings estimates for the December quarter.
Also, one might want to make sure he or she is invested in stocks whose companies have made it through the Great Recession unscathed -- or have roared ahead despite the overall economy. Apple, Inc. (AAPL) comes to mind immediately. While consumers have been cutting back on their overall spending, Apple has managed to sell enough handsome gadgets over the past two years to become the second-largest company in the world by market cap.
What? You say you don't own any shares of AAPL? Rise and shine, Rip van Winkle. Though Apple, Inc. shares carry a Zacks #3 Rank at present, the mixed earnings estimate revisions of the past month tilt the scales to the upside: 28 analysts have raised estimates for the December quarter and 5 have lowered theirs. Also, keep in mind that Apple, Inc.'s guidance is predictably overly conservative.
Finally, although the finance industry was Ground Zero for the economic meltdown, and over 100 banks have gone bankrupt in 2010 alone, being underexposed to the financials is not a good idea at this juncture. There are simply too many ways for companies like JPMorgan Chase & Co. (JPM) to turn a profit quarter over quarter, year over year.
JPMorgan has posted positive earnings surprises that have averaged more than 26% over the past four quarters. Earnings estimate revisions are again mixed -- 15 upward revision, 2 downward in the past month -- but JPM is as solid a Zacks #3 Rank financial institution as one can find. And JPMorgan will most likely be at the forefront of the major banks to restore a "normal" dividend in the coming quarters.
So -- everyone feeling a little bit better now? We seem to have tiptoed around the abyss, and we can once again begin looking forward to profitability and growth. And even if it seems for awhile like we've escaped turbulence only to find ourselves adrift in a flat market, solid bedrock stocks will help you feel more grounded. ALIGN="left"> ALIGN="left"> Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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.
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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.
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APPLE INC (AAPL): Free Stock Analysis Report
DU PONT (EI) DE (DD): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
MANPOWER INC WI (MAN): Free Stock Analysis Report
MONSANTO CO-NEW (MON): Free Stock Analysis Report
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