For Immediate Release
Chicago, IL – May 15, 2012 – Zacks
Equity Research highlights AGCO Corporation (AGCO)
as the Bull of the Day and AAR Corporation (AIR)
as the Bear of the Day. In addition, Zacks Equity Research provides
analysis on Viacom (VIAB), News
Corp. (NWSA) and Time Warner (TWX)
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 reiterate our Outperform
recommendation on AGCO Corporation (AGCO) with a
target price of $52. The company reported first quarter 2012
earnings of $1.21 per share, exceeding the Zacks Consensus Estimate
of $0.86. Total revenues increased 26.5% to $2.27 billion, beating
the Zacks Consensus Estimate of $2.08 billion.
The acquisition of GSI will help to
place the company in a new market sector and extend its achievement
in the agricultural industry. Moreover, it plans to invest in new
products to expand its product line. In addition, its strategy of
entering the emerging markets of Russia, CIS, China and Africa is
slated to achieve significant growth.
Further, the demand for AGCO's
products may increase as the U.S. Department of Agriculture expects
worldwide corn production to rise 10% to 946 million tons in 2012.
We set a 6-month target price of $52 per share, based on a P/E of
9.4x and our fiscal 2012 earnings estimate.
Bear of the Day:
We had downgraded our
recommendation on AAR Corporation (AIR) from
Neutral to Underperform. We have been witnessing an overcapacity in
the aerospace market, aggravated by intense competition from the
big and small industry players.
Risk of lower military operations,
delayed aircraft delivery and unscheduled maintenance inspections
raise costs. In addition, inadequate debt financing, unfavorable
aircraft lease agreement and currency fluctuations constrain
profitability considerably.
The company reported net income per
diluted share of $0.50, beating the Zacks Consensus Estimate by a
penny. However, our $15.00 target price, 8.2x 2012 EPS, reflects
our downgrade in recommendation.
Latest Posts on the Zacks Analyst
Blog:
Earnings Scorecard:
Viacom
Following the second quarter
earnings announcement on May 3, most of the analysts covering
Viacom Inc. (VIAB) have raised their estimates
mainly based on the huge number of movies slated to release in 2012
coupled with improved advertising spending in the U.S. due to the
upcoming presidential election to be held in 2012.
Second Quarter
Highlights
Net income from continuing
operations in the quarter was $588 million or $1.08 per share
compared with $376 million or 63 cents per share in the comparable
prior-year quarter. Adjusted EPS of 98 cents was also above the
Zacks Consensus Estimate of 90 cents.
Total revenue in the reported
quarter was $3,331 million, up 2% year over year and also beat the
Zacks Consensus Estimate of $3,317 million. The year-over-year
upside in revenue was mainly attributable to the strong performance
of the Media Networks affiliated revenue segments. Quarterly
operating income was $932 million, up 22.6% year over year.
Agreements of
Analysts
Although most analysts are positive
for 2012, out of the 24 analysts covering the stock in the last 7
days, none raised estimates for the third quarter of 2012 but eight
analysts reduced the same. For the fourth quarter of 2012, seven
analysts have raised the EPS estimate but only one analyst slashed
the estimate over the last 7 days.
For fiscal 2012, out of the 28
analysts, eight analysts increased the estimates while none reduced
the same. However, for 2013, out of the 27 analysts, four analysts
revised the estimate upward while two moved in the opposite
direction.
Currently, the Zacks Consensus EPS
Estimate for the second quarter of 2012 is pegged at $1.03. The
projected annual growth rate is 4.08%. Similarly, for the third
quarter, the current Zacks Consensus EPS Estimate of $1.24 reflects
a year-over-year gain of 16.86%.
Magnitude of Estimate
Revisions
Over the last 7 days, the Zacks
Consensus Estimate for the third quarter of 2012 dropped 4 cents
from the earlier estimate of $1.07. However, for the fourth quarter
of fiscal 2012, the Zacks Consensus Estimate was 2 cents above the
earlier estimate of $1.22.
For fiscal 2012, the estimate went
2 cents above the previous estimate of $4.27 in the last 7 days,
while in fiscal 2013, it was in line with the prior estimate of
$4.99.
Earnings
Surprises
Over the last four quarters, Viacom
has outdone the Zacks Consensus Estimate by an average of 7.22%. In
the last quarter, the company produced an earnings surprise of 8
cents or 8.89%.
The current Zacks Consensus
Estimate for the third and fourth quarters of 2012 reflect 0.00%
earning surprise (indicating that the company should report in line
with estimates in both quarters).
Fiscal 2012 should also show an
earnings surprise of 0.00% but fiscal 2013 has a downside risk of
0.60%.
Our
Recommendation
We believe that Viacom is well
positioned for long-term growth as it continues to benefit from its
predominately cable networks-based business model, strong affiliate
fee revenue growth, global brands, strong share repurchase plan,
multi-platform content and the fact that it is a player in one of
the fastest-growing markets (traditional ad media).
However, stiff competition from
other media companies like News Corp. (NWSA) and
Time Warner Inc. (TWX) along with slow economic
recovery may act as headwinds for the stock going forward. We,
therefore, maintain our long-term Neutral recommendation on
Viacom.
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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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
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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
AAR CORP (AIR): Free Stock Analysis Report
NEWS CORP INC-A (NWSA): Free Stock Analysis Report
TIME WARNER INC (TWX): Free Stock Analysis Report
VIACOM INC-B (VIAB): Free Stock Analysis Report
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