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QLogic, Chipotle Mexican Grill, Pandora, Sony and Apple highlighted as Zacks Bull and Bear of the Day

Chicago, IL - December 23, 2015- Zacks Equity Research highlights QLogic ( QLGC ) as the Bull of the Day and Chipotle Mexican Grill ( CMG ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Pandora, Inc ( P ), Sony Corp ( SNE ) and Apple Inc. ( AAPL ).

Here is a synopsis of all five stocks:

Bull of the Day :

The networking sector is often an overlooked, but vital, area of the technology world. But investors are finally starting to take notice of the space as companies like come into focus. In fact, the computer-networking segment is currently ranked in the top 5% of all industries overall and there isn't a single 'strong sell' security in the space, while four of the fourteen have 'strong buy' rankings.

One company to watch in 2016 for potential in this group is definitely QLogic ( QLGC ), a firm which is a pretty small player in the space but could be a great pick for next year. The company specializes in the switches and adapters market and it has clients that range from the small and medium sized businesses to giants like IBM, Cisco, and Oracle, just to name a few.

But while the stock price has been pretty volatile, and some investors from early 2015 are facing losses, the company is arguably on a much better path right now. This is largely thanks to a focus on its core businesses, a recent stock buyback, as well as success with their project with Brocade . Analysts are also buying into this shifting landscape as evidenced by their recent earnings estimates for QLGC stock.

Recent Estimates & Outlook

Analysts have begun to raise their estimates for QLGC stock, posting the current quarter estimate from 14 cents a share 90 days ago to 22 cents a share today, while the current year and next year estimates have gained, respectively, 34% and 15.9% in the time frame too. This suggests that analysts are really buying into the story at QLGC and that they are becoming more bullish on the prospects for QLogic stock over both the short and long term.

But before you start to worry about QLGC and their ability to beat earnings estimate revisions, consider their recent history at earnings season. The company has met or beat estimates in each of the last four quarters, including an average beat of nearly 28%. QLogic actually hasn't missed since the summer of 2012 so it is riding a pretty nice streak heading into the New Year.

Bear of the Day :

The hits just keep coming for Chipotle Mexican Grill ( CMG ) making this one of the easiest Bear of the Day articles I have written in quite some time. After all, the once-surging restaurant chain has been inundated with worries over the safety of its food as a number of E. coli outbreaks have hit the company, impacting customers across the country.

There have now been five infections (of varying types) that have been linked to Chipotle since this summer, making hundreds sick. And for a company that built its reputation on high quality ingredients and better practices when compared to its fast food competitors, this is a brand disaster.

That is probably why shares of Chipotle have fallen by nearly 20% in the last six months and they have fallen tumbled close to 33% since their 52 week high back in August. And with this sort of broad bearishness, analysts have been racing to slash their estimates for CMG stock as of late, painting a pretty brutal picture for the current quarter and the full year as well.

Recent Estimates

All fresh estimates for CMG stock have gone lower in the past sixty days as not a single analyst feels more bullish on the current outlook of Chipotle in this environment. And not only have estimates gone lower, but they have truly collapsed in recent weeks with a nearly 10% decline in expectations for the full year, and then a 16.8% decline in expectations for the following year. Topping things off though is a 40% slump in expectations for the current quarter as the food safety scare takes hold and crushes sales heading into 2016.

In fact, 90 days ago, estimates for the current quarter were at a pretty robust $4.39/share in EPS. But as more questions have cropped up over the food safety, they have been slashed to the bone and stand at just $2.60/share today, representing a 32% decline year-over-year.

Additional content:

Pandora Cuts Another Direct Deal: Can It Rein in Costs?

Online music streaming service Pandora, Inc ( P ) has signed yet another multi-year licensing agreement in a bid to better manage its content expenditure. Yesterday, the company announced a multiyear partnership with a top rights management firm, Downtown Music Publishing but refrained from disclosing the terms of the deal.

The Downtown deal comes a few days after Pandora inked a multiyear direct deal with Warner/Chappell Music. Earlier Pandora had signed a direct deal with Sony Corp's ( SNE ) Sony/ATV music label. These deals with music labels will offer greater certainty and help Pandora to reduce dependence on Copyright Royalty Board rates over time. Pandora and other Internet radio stations like iHeartRadio still "rely on compulsory, government-issued licenses for music."

Recently, CRB issued a long-awaited ruling on the royalty rates case. As per the ruling, Pandora will have to pay 17 cents per 100 streams of a song as royalty to the artists. The rate is higher than the 11 cents that Pandora asked for but is lower than the 25 cents as demanded by musicians and record labels.

Despite a 15% increase over Pandora's 2015 effective per-performance royalty rate, CEO Brian McAndrews labelled it as a "balanced rate we can work with and grow." He also added, "This decision provides much-needed certainty for both Pandora and the music industry." Many analysts observe that as Pandora tries to move away from government-regulated rates, the CRB ruling "could set a benchmark for future licensing deals with the record labels that would enable Pandora to extend its reach."

These are important developments as Pandora tries to win back investors' confidence. Pandora's shares have sunk nearly 20% so far in the year. Pandora, which is primarily popular for its Internet radio service, has been struggling as a result of the increasing popularity of on-demand streaming music.

The company had been seeing a slowdown in its subscriber base, owing to the aggressive marketing strategy of Apple Inc.'s ( AAPL ) Apple Music (especially three-month free trial plan) and competition from other players like Spotify. What is even more concerning is that even after the end of the free trial period, Apple managed to amass a decent number of paid subscribers.

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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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QLOGIC CORP (QLGC): Free Stock Analysis Report

CHIPOTLE MEXICN (CMG): Free Stock Analysis Report

PANDORA MEDIA (P): Free Stock Analysis Report

SONY CORP ADR (SNE): Free Stock Analysis Report

APPLE INC (AAPL): 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 Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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