CHICAGO, Nov. 9, 2011 /PRNewswire/ -- Zacks Equity Research highlights The Washington Post Co. (NYSE: WPO) as the Bull of the Day and Avon Products, Inc. (NYSE: AVP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Toyota Motors (NYSE: TM), Priceline (Nasdaq: PCLN) and WMS Industries (NYSE: WMS).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
The Washington Post Co. (NYSE: WPO) top and bottom lines surpassed Zacks' expectations in the third quarter of 2011. The quarterly earnings of $5.27 per share beat the Zacks Consensus Estimate of $3.85. Total revenue of $1,032.6 million also came ahead of the Zacks Consensus Estimate of $1,005 million.
The Kaplan Education division has undertaken a restructuring plan to lower its costs structure in the near future. Further, Kaplan International remains promising, registering growth of 25% during the quarter. Washington Post's Cable division is also performing well, reflecting sustained improvement in Internet and telephone service revenues.
We have a long-term Outperform recommendation on the stock. Our target price of $374.00, 17.9X 2011 EPS, reflects this view.
We have downgraded our long-term recommendation on Avon Products, Inc. (NYSE: AVP) to Underperform following the weak quarterly performance in the third quarter of 2011. The quarterly earnings of $0.38 per share fell short of the Zacks Consensus Estimate of $0.46 and dipped 7.3% from the year-ago quarter battered by increased product costs.
The North American market continues to be sluggish in the ongoing fiscal 2011. Moreover, the company's initiatives to change the product mix and reposition the business in the U.S. market will require significant expenditure to support increased advertising and promotional activities, which may dent its margins.
Furthermore, Avon is a highly leveraged company, limiting its financial flexibility to drive future growth. Additionally, the company faces stiff competition from other well established players and has significant exposure to foreign currency translations.
Latest Posts on the Zacks Analyst Blog:
Europe Issue Not Going Away
With the third quarter reporting season largely over and nothing major on the domestic economic calendar, stock market movements today will effectively reflect developments on the European front. The focus remains on Italy, where a routine budget vote in parliament has the potential to morph into a confidence vote on the government of prime minister Silvio Berlusconi. The market is rooting for Mr. Berlusconi's departure, but he appears in no mood to quit on his own.
By its sheer size, Italy is a big deal. Ever since the start of the Euro-zone debt crisis, the market has been apprehensive of contagion spreading from the peripheral and much smaller economies of Greece, Ireland, and Portugal to the Euro-zone core of Italy and Spain. Those fears are threatening to come to fruition now as the market loses confidence in the Italian government's ability to manage the country's finances. This lack of confidence is showing up in yields on Italian government bonds, which have moved to a Euro-era high of above 6.5% and are inching towards the critical 7% level -- beyond which lies bailout territory.
A simple answer to rising Italian bond yields would have been for the European Central Bank (ECB) to come up with its version of the U.S. Fed's quantitative easing program, where the central bank purchases a boatload of treasury bonds to keep yields (or interest rates) in check. The ECB has been making some purchases, but the recent uptrend in Italian bond yields shows that its effort is far from effective. German reluctance to go this route has been a major hurdle.
The Euro-zone had provided for increasing the firepower of the rescue fund (the EFSF), but many critical details of that plan still need to be worked out. The initial hope of attracting contribution from China and other cash-rich emerging economies to that end has also not panned out.
The bottom line is that the Euro-zone debt story refuses to go away. Last week it was about Greece and now it is about Italy. The departure of the Berlusconi government will likely improve market confidence and bring down bond yields. But if the incoming government -- assuming there is a change of political control -- fails to come up with a viable long-term plan, then the respite will likely prove short-lived.
On the earnings front, we have results from Toyota Motors (NYSE: TM), whose operations have been hit hard by natural disasters -- first by the Japanese Tsunami and now by floods in Thailand. The auto giant's global vehicle sales for the six month period ending September 30th were down more than 18% from the year-earlier level.
In other earnings reports, Priceline (Nasdaq: PCLN) came out with solid EPS and revenue beats after the close on Monday. WMS Industries (NYSE: WMS), the maker of slot machines, came short of expectations.
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.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=7158.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com
SOURCE Zacks Investment Research, Inc.
Share this article