Zacks Bull and Bear of the Day Highlights: GATX, Capella Education, Comcast, Time Warner Cable and Cablevision Systems
CHICAGO, May 23, 2012 /PRNewswire/ -- Zacks Equity Research highlights GATX Corporation (NYSE:GMT) as the Bull of the Day and Capella Education Co. (Nasdaq:CPLA) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Comcast Corp. (Nasdaq:CMCSA), Time Warner Cable Inc. (NYSE:TWC) and Cablevision Systems Corp. (NYSE:CVC)
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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:
We are upgrading our recommendation on GATX Corporation (NYSE:GMT) to Outperform. The rail, marine and industrial company's first quarter adjusted earnings surpassed the Zacks Consensus Estimate and improved year over year, primarily on higher lease rates.
We expect higher lease rates to continue to remain a key growth driver for GATX in the current year and beyond. In addition, increased asset utilization through the reduction of idle rail cars and the deployment of new rail cars will be accretive to the company's long-term growth, given the growing rail freight market.
Further, GATX enjoys a healthy balance sheet and is committed to enhance its shareholders value through strong dividend payments. We are recommending an Outperform rating with a target price of $45, based on 16.8x our earnings estimate for 2012.
Though Capella Education Co's (Nasdaq:CPLA) first quarter 2012 earnings of $0.82 per share beat the Zacks Consensus Estimate, it dropped 15% from the prior-year quarter due to top-line weakness. Total revenues fell 1.8% due to a decline in new enrollments.
The company has been witnessing volatile enrollment growth since the last few quarters due to challenging market conditions. The company's brand-driven marketing strategy is not leading to a desired improvement in enrollments. Increased marketing spend associated with the strategy also remains a drag on margins.
The company provided a weak near-term enrollment outlook, forcing us to reduce our estimates for both 2012 and 2013. Moreover, the highly regulated nature of post-secondary education in the US also remains a consistent overhang. We have therefore downgraded our rating on the stock from Neutral to Underperform.
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Cable MSOs Opt for WiFi Sharing
In a major move to counter competitive threat from telecom service providers and other online video streaming providers, the five largest cable operators in the U.S., including Comcast Corp. (Nasdaq:CMCSA), Time Warner Cable Inc. (NYSE:TWC), Cablevision Systems Corp. (NYSE:CVC), Cox Communications Inc., and Bright House Networks LLC have entered into an agreement for free Wi-Fi platform sharing.
Subscribers of these cable MSOs will be able to access Internet from their respective laptops, smartphones, tablets, and other mobile devices through a nationwide shared network of more than 50,000 Wi-Fi hotspots in metro areas.
The five cable TV operators have created a new web access network called "Cable WiFi". Using this network, subscriber of any of these five cable TV operators can access Internet even if that person is logging from outside his/her cable TV operators' home market.
At first, the user need to login simply using the credentials of his own cable MSO's WiFi network. Within a few minutes, the subscriber's device will be automatically connected to the Internet once the person reach within the range of a participating WiFi hotspot of any of these five cable TV operators.
Cable MSOs throughout the U.S. are facing increasing competition from both telecom service providers and satellite TV providers. Roaming Wi-Fi connectivity is likely to become a huge opportunity for cable MSOs to minimize their respective customer churn rate. The mobile Wi-Fi hotspot market is expected to become a multi-billion USD opportunity within the next few years.
Several industry sources predicted that Wi-Fi enabled wireless devices, such as phone, computer, and consumer electronics may cross one billion mark by 2012. In addition to retail consumers, the business enterprises are likely to become major contributor for the growth of mobile Wi-Fi hotspot.
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.
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