Zacks Bull and Bear of the Day Highlights: The Kroger, KB Home, First Solar, FirstEnergy and NRG Energy - Press Releases

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For Immediate Release

Chicago, IL - March 16, 2012 - Zacks Equity Research highlights: The Kroger Company  ( KR ) as the Bull of the Day and KB Home  ( KBH ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on First Solar, Inc.  ( FSLR ), FirstEnergy Corporation  ( FE ) and NRG Energy, Inc.  ( NRG ).

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 upgraded our recommendation on  The Kroger Company  ( KR ) to Outperform following the company's fourth-quarter 2011 results. The quarterly earnings of $0.50 per share beat the Zacks Consensus Estimate by a penny, and rose 8.7% from the prior-year quarter. Total revenue climbed 7.7% during the quarter. Kroger now expects fiscal 2012 earnings between $2.28 and $2.38 per share and forecasts identical supermarket sales (sans fuel) growth of 3% to 3.5%.

We believe that a dominant position among the nation's largest grocery retailers enables Kroger to sustain top-line growth, expand store base, and boost market share. The company is also well positioned to deliver higher earnings primarily through strong super market sales (sans fuel) growth.

Kroger is also actively managing its capital and returning much of its free cash to shareholders via share buybacks and dividends. Moreover, management continues to deploy capital to concentrate more on remodels, merchandising and other viable projects.

Bear of the Day :

KB Home  ( KBH ) faces a fragile housing market. Increased availability of housing alternatives may keep the company's earnings under pressure. Furthermore, the company's housing market is highly concentrated, which poses threats to its earnings performance.

The company did post a profit of $0.18 per share during the fourth quarter of fiscal 2011, which was much higher than the Zacks Consensus Estimate of $0.03. Nevertheless, the negative factors have led us to downgrade the recommendation on shares of KB Home from Neutral to Underperform with a target price of $10.00.

Our long-term Underperform recommendation on the stock indicates that it will perform lower than the overall market. Our $10 target price, 25.0X our 2013 EPS estimate, reflects this view.

Latest Posts on the Zacks Analyst Blog :

First Solar in Large Power Projects

First Solar, Inc.  ( FSLR ) has decided to build a photovoltaic (PV) solar power project in Hagerstown, Maryland with a generation capacity of 20 megawatt ("AC"). The company will have full ownership of the Maryland Solar plant.

Under a contract, the electricity and renewable energy credits will be sold to a unit of FirstEnergy Corporation  ( FE ). To generate clean and renewable energy, the plant will use First Solar's advanced thin film PV modules. The energy generated on an average will be able to provide power to approximately 2,700 Maryland homes. The power from the eco-friendly plant will displace approximately 23,000 metric tons of CO2 annually which is equivalent to taking 4,400 cars off the road each year.

First Solar is expected to begin the construction of the power plant in the second quarter of 2012 with completion scheduled for the fourth quarter.

In a recent agreement, First Solar cut a deal with  NRG Energy, Inc.  ( NRG ) under which it will build a 26 megawatt Avra Valley solar project for the latter. Under a 20-year power purchase agreement, the electricity generated from the project will be sold to Tucson Electric Power.

In February 2012, the company reported fourth quarter and fiscal 2011 results. First Solar fell below the Zacks Consensus earnings per share estimate of $1.57 by 31 cents to clock adjusted earnings of only $1.26 in the reported quarter.  First Solar's quarterly revenues were $660 million, up $50 million from $610 million in the fourth quarter of 2010. Quarterly revenue however fell behind the Zacks Consensus Estimate of $812 million. On a year-to-year basis, fourth quarter module Average Selling Prices ("ASP") decreased 2% and third-party ASPs declined 24%.

Like its peers, the company is witnessing an oversupply of photovoltaic products leading to a drop in ASPs. Also, the current macro scenario does not bode well for the solar industry, which thrives mainly on subsidies and grants. In this scenario, the aforesaid utility-scale electricity power projects would help counter the headwinds facing solar module producers in general.

The company presently retains a short-term Zacks #3 Rank (Hold). We have a long-term Underperform recommendation on the stock.

Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649 .

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FIRSTENERGY CP ( FE ): Free Stock Analysis Report
 
FIRST SOLAR INC ( FSLR ): Free Stock Analysis Report
 
KB HOME ( KBH ): Free Stock Analysis Report
 
KROGER CO ( KR ): Free Stock Analysis Report
 
NRG ENERGY INC ( NRG ): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: FE , FSLR , KBH , KR , NRG

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