For Immediate Release
Chicago, IL – November 15, 2010 – Zacks Equity Research highlights: Deere & Co. (DE) as the Bull of the Day and Jacobs Engineering (JEC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on General Motors (MTLQQ), Ford Motor Co. (F) and Qualcomm Inc (QCOM).
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:
Deere & Co. (DE) generates the highest operating margin in the industry. During the third quarter of fiscal 2010, the company delivered earnings per share of $1.44, surpassing the Zacks Consensus Estimate of $1.25 and outperforming its peer Caterpillar Inc. by $0.22.
With an intact farming customer base and improving economic conditions, the company's sales are ready to rebound significantly. Moreover, Deere is likely to receive a boost from the new Tier4i engine developed recently.
The stock is trading at a discount of 17% to the peer group, based on forward earnings estimates. Our long-term Outperform recommendation indicates that it will perform well above the market. Our target price of $93.00, 20.6x 2010 EPS of $4.51, reflects this view.
Bear of the Day:
We have downgraded our recommendation on Jacobs Engineering (JEC) from Neutral to Underperform based on the company's continuous decrease in backlog since the beginning of fiscal 2010, which is expected to negatively affect its top-line results in fiscal 2011.
Hence, we reduce our fiscal 2011 estimate by 3 cents. The stock is cyclical in nature, and thus the sluggish economic environment, which has reduced the client's spending power, was the prime reason for the decrease in backlog.
Large investors fear to infuse capital in the unstable market conditions. Moreover, the company faces immense risk as it operates in a highly-competitive environment.
Latest Posts on the Zacks Analyst Blog:
GM Tops Ford in Profits
The new General Motors (MTLQQ) has topped both its hometown rivals, Ford Motor Co. (F) and Chrysler LLC, with a profit of $2.16 billion or $1.20 per share in the third quarter of the year, in sharp contrast to a loss of $858 million or 73 cents per share in the year-ago quarter. Operating income was $1.85 billion versus a loss of $1 billion a year ago.
During the quarter under review, Ford reported a profit of $1.91 billion while Chrysler posted a loss of $84 million. In North America, GM earned $3,005 per vehicle due to its effort to boost truck output during the summer. In contrast, Ford earned $2,710 per vehicle and Chrysler earned $593 per vehicle in the region.
GM's profit was fueled by the company's turnaround in North America, which had been witnessing substantial losses earlier, and impressive growth in sales volume in GM International Operations (GMIO).
Revenues during the quarter surged 35% to $34.06 billion on the back of higher prices of its vehicles and a 5% increase in sales volume to 2.07 million units. The growth in sales volume was driven by a 16% rise in sales to 1.01 million units in GMIO led by increased sales of the Chevrolet lineup.
Earnings Scorecard: Qualcomm
Qualcomm Inc (QCOM) reported strong earnings results for the fourth quarter of fiscal year 2010, beating the Zacks Consensus Estimate by 2 cents per share. Overall, the analysts are bullish, given the company's impressive fourth quarter results.
Qualcomm benefited from a significant surge in demand for high-end 3G smartphones, the company's technology leadership, solid MSM chipset shipments, an extremely healthy balance sheet and strong execution. Management is now more confident about fiscal year 2011 and as a result, has provided impressive financial guidance for the coming quarters.
Our Recommendation We continue to believe that the robust growth of 3G wireless networks and a strong balance sheet will serve as long-term catalysts for Qualcomm. Smartphones are quickly becoming the next-generation choice, taking over the market share from basic mobile handsets.
This, in turn, will help Qualcomm to sustain its revenue growth. We maintain our long-term Neutral recommendation. Currently, Qualcomm is a Zacks #3 Rank (Hold) stock. 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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DEERE & CO (DE): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
JACOBS ENGIN GR (JEC): Free Stock Analysis Report
MOTORS LIQUIDAT (MTLQQ): Free Stock Analysis Report
QUALCOMM INC (QCOM): Free Stock Analysis Report
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