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Zacks Bull and Bear of the Day Highlights: Norfolk Southern, HSBC Holdings plc, JPMorgan Chase, The Goldman Sachs Group and Citigroup - Press Releases

For Immediate Release

Chicago, IL - December 22, 2011 - Zacks Equity Research highlights Norfolk Southern Corp. ( NSC ) as the Bull of the Day and HSBC Holdings plc ( HBC ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on JPMorgan Chase & Co. ( JPM ), The Goldman Sachs Group Inc. ( GS ) and Citigroup Inc. ( C ).

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 maintain our Outperform recommendation on Norfolk Southern Corp. ( NSC ). The company reported a stellar third quarter, with earnings per share surpassing the Zacks Consensus Estimate and year-ago results backed by strong pricing and shipment across all segments.

We believe this momentum in pricing and volume will continue on growing market demand and capacity constraints in the truck freight transportation market. Additionally, the company's focus on improving network and service offerings as well as increasing investment will also yield solid growth both in the near and long term.

Further, the strong balance sheet with healthy cash flow remains attractive for investors driving higher returns via increased dividends and share buybacks. Hence, we set a target price of $83.00 per share, based on 15.8x our 2011 EPS estimates.

Bear of the Day :

We retain our Underperform recommendation on HSBC Holdings plc ( 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 :

Fed Submits New Results to Banks

Recently, the Federal Reserve came up with a series of new stringent rules for the largest U.S. banking institutions in order to stabilize the financial system. The Fed proposed certain requirements which the financial institutions need to fulfill to prevent another financial crisis.

The rules proposed by Fed will take under its purview not only the U.S. bank holding companies, but also other financial firms, which the U.S. regulators consider critically important for the functioning of the financial system. Moreover, systemically important non-bank financial institutions may also have to meet the new requirements.

However, the Fed has not decided upon whether to include non-banks such as insurance companies and hedge funds.

The rules form the part of new regulation proposed under the Dodd-Frank Act, which was passed in 2010 to revamp the financial system and limit practices which resulted in 2008 financial crisis. The proposal outlines the measures related to capital, liquidity, credit exposure, stress testing, risk management and early remediation requirements. Further, the agency proposed new stringent rules on dealings between the big banks.

Under the newly proposed rules, the U.S. bank holding companies with over $50 billion in assets will be affected as they need to hold cash at least 5% of the value of their assets while protecting them from bad loans and investments.

Moreover, even stricter rules will be implemented for the companies with over $500 billion in assets including JPMorgan Chase & Co. ( JPM ), The Goldman Sachs Group Inc. ( GS ) and Citigroup Inc. ( C ) as they are restricted from entering credit exposure of not more than 10% with any other bank. Through this rule, the Fed will limit the overly interconnections between banks and minimize the risk exposed to a single financial institution as a percentage of the bank's regulatory capital.

Smaller banks with over $10 billion in assets have to undergo stress tests conducted by their regulators to test their adequacy to withstand an economic downturn.

Risk-based capital and leverage requirements will be implemented in two phases. In the first phase, the financial institutions would be exposed to the board's capital plan rule issued in November 2011. As per the rule, the firms would make annual capital plans, carry out stress tests and maintain adequate capital. Moreover, these firms have to keep Tier 1 common risk-based capital ratio greater than 5%, under both expected and strained conditions.

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 qualitative analysis to help investors know what stocks to buy and 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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CITIGROUP INC ( C ): Free Stock Analysis Report

GOLDMAN SACHS ( GS ): Free Stock Analysis Report

HSBC HOLDINGS ( HBC ): Free Stock Analysis Report

JPMORGAN CHASE ( JPM ): Free Stock Analysis Report

NORFOLK SOUTHRN ( NSC ): 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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