For Immediate Release
Chicago, IL - December 30, 2011 - Zacks Equity Research
highlights:
AGCO Corporation
(
AGCO
) as the Bull of the Day and
HSBC Holdings plc - ADS
(
HBC
) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis on
The Wendy's Co.
(
WEN
),
Krispy Kreme Doughnuts Inc.
(
KKD
) and
McDonald's Inc
. (
MCD
).
Full analysis of all these stocks is available at
http://at.zacks.com/?id=2678
.
Here is a synopsis of all five stocks:
Bull of the Day
:
Driven by strong global demand for agricultural equipment,
AGCO Corporation
(
AGCO
) reported third quarter EPS of $0.87 versus $0.66 in the
year-earlier quarter, surpassing the Zacks Consensus Estimate of
$0.75. For fiscal 2011, AGCO expects EPS of $4.30.
Global industry sales are anticipated to grow in 2011. With a
full product line of farm equipment and a wide network of dealers
and distributors, we believe AGCO is well positioned over the long
term to capitalize on the need for increased food production, which
is being driven by worldwide population growth.
Moreover, the company is also looking to expand operations in
high-growth emerging markets, which bode well for future operating
performance. We maintain our Outperform recommendation with a
target price of $51.00, based on a P/E of 11.7 and our fiscal 2011
earnings estimate.
Bear of the Day
:
We retain our Underperform recommendation on
HSBC Holdings plc - ADS
(
HBC
) with an Underperform recommendation. Our primary concern is the
harsh impact from the deepening Eurozone crisis. Moreover, the
company is suffering from weak revenue growth in its mature markets
due to ongoing low interest rates and regulatory restrictions.
The company's cost containment measures will help it deal with
economic pressures to a great extent. But we expect high inflation
in some key Asian markets, slothful loan growth, insufficient core
operating performance and high wage inflation to restrict the
company's growth, at least in the near term.
Our six-month target price of $36.00 per ADS equates to about
8.5x our earnings estimate for fiscal 2011. This target price
implies an expected negative total return of 9.0% over that period.
This is consistent with our long-term Underperform recommendation
on the ADSs.
Latest Posts on the Zacks
Analyst Blog
:
Wendy's Debuts in Japan
The Wendy's Co.
(
WEN
) recently announced the opening of its first restaurant in Tokyo,
Japan. The new restaurant has come up in the Omotesando area in
Tokyo and is a part of Wendy's collaboration deal with Higa
Industries Co. Ltd. Earlier, in March this year, the company
entered into a development agreement with Higa Industries Co. Ltd.
to open approximately 100 Wendy's units in Japan. Per the deal,
Higa Industries will develop and operate Wendy's restaurants across
the country in the coming years.
The Japanese deal estimates the long-term market potential to be
about 700 restaurants. Wendy's Japan will specifically focus on
locally relevant menu, including the Avocado Wasabi hamburger and
the Truffle and Porcini Grilled Chicken sandwich.
Higa Industries, led by Ernest Higa, boasts superior local
market knowledge and has a proven track record of venturing into
industries as diverse as lumber, medical and restaurant, within the
Japanese market.
The latest restaurant opening in association with Higa
Industries marks Wendy's return to the Japanese market after it
discontinued its franchise agreement in the country back in 2009.
Wendy's had decided against renewing its contract, citing the
franchiser's tardy development. This resulted in the closure of 71
restaurants in that country.
The recent deal with Higa affirms management's intention of
making Japan one of the prime markets for international expansion,
considering its recovering economy and status of being the second
largest quick-service restaurant market in the world. The company
seeks to fully capitalize on the country's potential.
Japan has emerged as one of the prime targets for several other
restaurant companies.
Krispy Kreme Doughnuts Inc.
(
KKD
) also entered into a development agreement with its Japanese
franchisee, Krispy Kreme Doughnut Japan Co. Ltd., to set up and
operate 73 new restaurants in Japan within the next five years.
Another peer
McDonald's Inc
. (
MCD
) with a much wider scale of operation enjoys a prominent presence
in Japan.
In an attempt to strengthen its international presence,
Atlanta-based Wendy's consistently enters into long-term
development agreements with franchisees in the Middle East and
North Africa, Singapore, Turkey, Russia, Argentina, the Philippines
and the Eastern Caribbean. Additionally, the company is exploring
growth opportunities in China, Brazil and other key international
markets.
Wendy's currently retains a Zacks #2 Rank, which translates into
a short-term 'Buy' rating. We also maintain our long-term "Neutral"
recommendation on the stock.
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
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Continuous analyst coverage is provided for a universe of 1,150
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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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AGCO CORP (
AGCO
): Free Stock Analysis Report
HSBC HOLDINGS (
HBC
): Free Stock Analysis Report
KRISPY KREME (
KKD
): Free Stock Analysis Report
MCDONALDS CORP (
MCD
): Free Stock Analysis Report
WENDYS CO/THE (
WEN
): Free Stock Analysis Report
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