For Immediate Release
Chicago, IL - April 2, 2012 - Zacks Equity Research highlights
IntercontinentalExchange Inc.
(
ICE
) as the Bull of the Day and
Southwest Airlines
(
LUV
) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis on
Micron Technology
(
MU
),
Oracle Corporation
(
ORCL
) and
SanDisk Corp.
(
SNDK
).
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
:
We are upgrading our recommendation on
IntercontinentalExchange Inc.
(
ICE
) based on its high earnings visibility, strong product portfolio,
consistent cash generation, disciplined investment and limited
balance sheet risk, which enables it to be one of the most dynamic
companies in the industry.
The company's fourth quarter earnings surpassed the Zacks
Consensus Estimate, reflecting momentous performance in its core
business, higher volumes and strong expense management that drove
the top- and bottom-line along with the margins and cash flow. The
company is growing through strategic acquisitions, product novelty
and expansion into the globally emerging markets.
In the long run, these factors are expected to consistently
deliver strong shareholder value, although some caution is
maintained based on the impact of regulations and uncertain
industry trends. Our six-month target price of $166.00 equates to
about 20.6x our earnings estimate for 2012.
Bear of the Day
:
We are downgrading our recommendation on
Southwest Airlines
(
LUV
) to Underperform as the company is not expected to report profits
in the first quarter this year. The company reported lower
year-over-year earnings in the fourth quarter but outpaced the
Zacks Consensus Estimate.
Although Southwest is poised to benefit from fleet rightsizing,
its Evolve retrofit program, steady capacity growth, All-New Rapid
Rewards, AirTran merger synergies and several ancillary revenues,
fuel prices continue to drag down the profits. The entire airline
industry is currently struggling with higher fuel prices and a
slow-moving U.S. economy.
Additionally, high maintenance costs associated with fleet
modernization, new advertising rules, risks pertaining to the
AirTran integration, heavy investments and reliance on a single
fleet keep us cautious on the stock. Hence, we rate the stock
Underperform with a target price of $7.50, based on 11x our
earnings estimate for 2012.
Latest Posts on the Zacks
Analyst Blog
:
Micron Settles Oracle Lawsuit
Semiconductor major
Micron Technology
(
MU
) has recently confirmed that it has settled a lawsuit with
software giant
Oracle Corporation
(
ORCL
).
As per the lawsuit, Oracle accused Micron of artificially
increasing the DRAM prices and violating the state's antitrust and
unfair competition laws based on the conduct of the company,
extending from August 1, 1998, til June 15, 2002.
The IT major claimed several damages and has also agreed upon
the restitution of attorneys' fees, costs and injunctive relief. As
per the settlement, both the parties have agreed upon withdrawing
the litigations against one another.
This settlement is expected to affect Micron's second quarter
2012 results, and may result in lower revenues and an increase in
the net loss attributable to Micron shareholders of $58.0 million
as compared to the figure reported in March 22, 2012.
The legal settlement is expected to keep Micron's reputation
unscathed, although may result in some monetary loss to the
company. This may in turn add to the disappointing second quarter
result and may widen the loss per share compared with our
estimates. The quarter's revenue also came in below the year-ago
level. The quarter even saw a decline in ASP.
The cost-cutting measure could mitigate the adverse effect of
ASP decline to some extent, going forward. Additionally, the drop
in demand for laptops and desktop PCs may affect the demand for
DRAM and RAM to a certain extent.
On the other hand, we believe that it won't be easy for Micron
to capture market share from
SanDisk Corp.
(
SNDK
), as SanDisk is a key player in the NAND space. However, the
renewal in operation in Thailand may help the company going
forward.
Micron Technology has a Zacks #3 Rank, implying a short-term
Hold rating.
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
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which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150
publicly traded stocks. Our analysts are organized by industry
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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INTERCONTINENTL (
ICE
): Free Stock Analysis Report
SOUTHWEST AIR (
LUV
): Free Stock Analysis Report
MICRON TECH (
MU
): Free Stock Analysis Report
ORACLE CORP (
ORCL
): Free Stock Analysis Report
SANDISK CORP (
SNDK
): Free Stock Analysis Report
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