For Immediate Release
Chicago, IL –August 19, 2010 – Zacks Equity Research highlights: Union Pacific Corp (UNP) as the Bull of the Day and Walgreen Company (WAG) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on JPMorgan Chase & Co. (JPM), General Motors (MTLQQ) and Toyota Motors’ (TM).
Here is a synopsis of all five stocks:
We upgrade our recommendation for Union Pacific Corp (UNP) to Outperform, following its second quarter 2010 financial results, far ahead of the Zacks Consensus Estimates. The company generated record profit. This excellent performance was achieved through best-ever operating ratio, massive growth in business volume, cost control, and pricing gains.
An improving U.S. economy, massive surge in automotive shipments, and a sharp rebound in many of the company s end markets are expected to fuel future growth of Union Pacific. As the U.S. economy continues to grow gradually, demand for carriage also becomes robust and the momentum is expected to sustain in the long-run.
According to our view, Union pacific is better insulated against economic uncertainty as approximately 37.0% of its revenues are tied to less cyclical freight like agriculture and coal.
Walgreen Company (WAG) posted third quarter fiscal 2010 earnings per share of $0.47, lower than the Zacks Consensus Estimate of $0.57 and year-ago quarter s $0.53. Walgreen's strategy of store expansion coupled with operating acumen has made the company a leader in the retail drug store industry.
However, we are concerned about the competitive pressures faced by the company due to prescription reimbursement issues and slow introduction of new generic products. Moreover, our apprehensions are further bolstered by factors like higher SG&A expenses, a shift towards the low-margin pharmacy business as well as gross margins reflecting a downward trend.
Based on these factors, we have lowered our estimates for fiscal 2011 and downgrade the stock to Underperform with a target price of $26.00.
Latest Posts on the Zacks Analyst Blog:
Chase Bank Hires 200 in San Antonio
According to a report from the San Antonio Business Journal, Chase Bank, the principal banking subsidiary of JPMorgan Chase & Co. (JPM), recruited 200 employees in San Antonio at a job fair on Tuesday.
At the job fair, Chase appointed employees to the departments of claims, collections and other customer-support for the Chase Operations Center located at 20855 Stone Oak Parkway.
GM Recalls 250,000 Crossovers
General Motors (MTLQQ) plans to recall about 250,000 crossover globally in order to inspect and fix their second-row seat belts. The recall involves 2009-2010 models of the Chevrolet Traverse, Buick Enclave, GMC Acadia and Saturn Outlook. These vehicles are sold in the U.S., Canada, Mexico and elsewhere.
The automaker noticed that there are chances of the seat-belt buckle getting damaged when the seats are pushed back to their normal position. As a result, this could cause the buckle to appear to be latched when it isn’t. However, GM is unaware of any cases where the second-row seat belts failed to perform correctly in a crash.
Since the beginning of the year, GM has recalled about 3 million vehicles in the U.S., Canada, Mexico and South Korea. Among these, the largest recall was made in June, involving 1.5 million vehicles. This was done in order to fix a problem with a heated windshield wiper fluid system that has been causing fire in the vehicles.
The June recall affected 2006 to 2009 model years of Buick Lucerne, Cadillac DTS, and Hummer H2; 2008-2009 Buick Enclave and Cadillac CTS; 2007-2009 Cadillac Escalade, Escalade ESV and Escalade EXT; 2007-2009 Chevrolet Avalanche, Silverado, Suburban and Tahoe; 2007-2009 GMC Acadia, Sierra, Yukon and Yukon XL; 2007-2009 Saturn Outlook; and 2009 Chevrolet Traverse.
This is GM’s second recall over the same issue in two years. In August 2008, the automaker recalled 900,000 vehicles due to a heated washer fluid system on the back of a short circuit on the circuit board that overheated the ground wire in the vehicles.
Automotive safety recalls have become the talk of the town after Toyota Motors’ (TM) announcement of the largest-ever global recall of more than 8.5 million vehicles since October last year. The Japanese automaker’s recall was related to problems such as faulty accelerator gas pedals and slipping floor mats as well as defective braking systems.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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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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JPMORGAN CHASE (JPM): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
UNION PAC CORP (UNP): Free Stock Analysis Report
WALGREEN CO (WAG): Free Stock Analysis Report
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