Zacks Equity Research highlights Dr. Pepper Snapple (NYSE: DPS)
as the Bull of the Day and Supertex, Inc. (Nasdaq: SUPX) as the
Bear of the Day. In addition, Zacks Equity Research provides analysis on
PMI Group (NYSE: PMI),
Chesapeake Energy (NYSE: CHK) and Toyota Motor Corp.
(NYSE: TM).
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: Dr. Pepper Snapple (NYSE: DPS)
Dr Pepper Snapple Group continues to execute well in a difficult soft
drink environment. Last year, the company reported 21.4% net sales
growth, primarily due to acquisitions, and 3% organic net sales growth.
In addition, cost and productivity initiatives are more than offsetting
cost pressures from higher raw material prices. The company enjoys an
attractive product mix with emphasis on flavored CSDs [carbonated
soft drinks] and non-CSD beverages, such as
ready-to-drink tea, juice and juice drinks. Management has a sound
business strategy; with the stock at the low-end of the expected
valuation range, coverage is initiated with a Buy rating.
Bear of the Day: Supertex, Inc. (Nasdaq: SUPX)
For fiscal 2008, the company generated sales of $82.6 million, down from
$98.0 million in fiscal 2007, mainly due to reductions in legacy EL
driver sales and reduced foundry sales. 2008 was a challenging year for
the company as it experienced a dramatic change in product mix due to a
steep decline of $15.2 million in legacy EL driver IC sales and a $2.4
million decline in foundry sales. We currently have a Sell on the stock
with a target price of $20.00.
Latest Posts on the Zacks Analyst Blog:
PMI Group (NYSE: PMI)
PMI Group's 1Q08 net operating loss of $3.37 per diluted share was
substantially worse than the estimates. The results suffered from
increased losses in the U.S. Mortgage Insurance Operations and the
impairment of PMI's investment in FGIC, which more than offset the
higher net income from International Operations.
PMI wrote-off the carrying value of its investment in FGIC. The
company's combined ratio worsened significantly while the claim rates
and average claim sizes increased considerably. We suspect the company
may need to raise capital in the coming months in order to satisfy the
requirements of the rating agencies.
Chesapeake Energy (NYSE: CHK)
Our continued favorable view of Chesapeake Energy shares reflects the
company's strong production-growth profile due to its industry-leading
inventory of development projects. The recent announcement of new
unconventional gas plays, particularly the Haynesville Shale, provides
for significant resource potential and a multi-year inventory of
low-risk development projects.
Our Buy recommendation remains unchanged, though we have raised
estimates and price objective. Our new 2008 and 2009 EPS estimates are
$3.97 and $4.25, up from $3.43 and $3.35, respectively.
Toyota Motor Corp. (NYSE: TM)
Toyota Motor Corp. continues to expand its production capacity in a
manner that increases efficiency and meets local demand while placing it
on the way to becoming the world's financially strongest automaker. It
has a strong presence in North America and has been successful in
grabbing market share from the leading U.S. automakers. Moreover, the
company also has a strong cash flow position and a strong balance sheet.
However, rising costs, pricing pressures and huge capital expenditures
lead us to rate the stock a Hold with a six-month target price of
$96.00. Currently, ADRs of Toyota Motor Corporation are trading at 12.3x
our 2009 EPADR estimate of $8.22.
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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
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