CHICAGO, Aug. 24, 2011 /PRNewswire/ -- Zacks Equity Research highlights CIGNA Corporation (NYSE: CI) as the Bull of the Day and Computer Sciences Corp. (NYSE: CSC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Kinder Morgan Energy Partners LP (NYSE: KMP), Enterprise Products Partners LP (NYSE: EPD) and Energy Transfer Partners LP (NYSE: ETP).
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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
CIGNA Corporation's (NYSE: CI) second quarter core earnings were fairly ahead of the Zacks Consensus Estimate well as the year-ago quarter's earnings. Better-than-expected results were aided by strong earnings across the board. Earnings per share (EPS) also benefited from a lower share count compared with the year-ago quarter.
The company is aggressively expanding its international operations, which will likely drive future growth. Moreover, CIGNA has lower exposure to reform risks than other insurers, and thus has an edge with respect to the Healthcare Reform Act. A strong balance sheet and adequate liquidity will further lead to continued share buybacks, thereby contributing to the bottom line. Moreover, membership enrollment has increased.
Our six-month target price of $49.00 equates to about 9.2x our earnings estimate for 2011. We view $0.16 per common share annual dividend as secure, implying an expected return of about 20.0% over that period.
Computer Sciences Corp. (NYSE: CSC) is one of the leading players in the information technology (IT) services industry. We are apprehensive about the intense competition in the IT and cloud computing space from both small and big players such as Accenture and Hewlett-Packard.
Moreover, with government orders expected to dry up to a certain extent and the National Health Services realization getting pushed to future quarters, things look difficult for the company. Moreover, the demand for the company's products in Europe is not encouraging for the upcoming quarters.
While we are positive on the company we are a bit concerned about the competition it faces from larger players and its high outstanding debt. We maintain an Underperform rating on CSC and set a price target of $27.00, representing a P/E of 5.9x our 2012 EPS estimate.
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KMP Pipeline System Overbooked
Kinder Morgan Energy Partners LP's (NYSE: KMP) Trans Mountain oil pipeline (TMPL) is overbooked by a wide margin for September. This has forced the company to cut shipper nominations. The pipeline carries oil to Canada's Pacific Coast from Alberta.
Due to volume compression, the company will only be able to move 32% of the allocated volume on the 300,000 barrel per day (bpd) capacity pipeline system. According to the company, this translates into 270,045 bpd for the month.
Kinder Morgan has a total oversubscription of 62% for the overall system. The overall system includes the Trans Mountain pipeline, Puget Soundline and Westridge Dock.
The Puget Sound pipeline system, which ships Canadian crude oil and condensates via the TMPL system, will see an 8% reduction in its nominations. Westridge Dock, situated in Burnaby, British Columbia transports oil and refined products to California, the U.S. Gulf Coast and overseas, does not have any allotment for regular shipments.
In North America, TMPL is the sole pipeline system that transfers both crude oil and refined products to the west coast. Notably, TMPL carries products from Edmonton, Alberta, to marketing terminals and refineries in the central British Columbia region, the Greater Vancouver area and the Puget Sound area in Washington State.
Kinder Morgan has a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. For the long term, we maintain a Neutral rating on the stock. Enterprise Products Partners LP (NYSE: EPD) and Energy Transfer Partners LP (NYSE: ETP) are major competitors of the company.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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