CHICAGO, Sept. 7, 2012 /PRNewswire/ -- Zacks Equity Research highlights Urban Outfitters, Inc. (Nasdaq:URBN) as the Bull of the Day and Advance Auto Parts (NYSE:AAP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onRoyal Dutch Shell plc (NYSE:RDS.A), Chevron Corporation (NYSE:CVX) and Marathon Oil Corporation (NYSE:MRO).
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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:
Urban Outfitters, Inc.'s (Nasdaq:URBN) second-quarter 2013 earnings of $0.42 per share beat the Zacks Consensus Estimate of $0.33, and rose 20% from the year-ago quarter. Management now expects that fourth quarter will present considerable opportunity for gross margin improvement than the third quarter.
The company is now trying to optimize inventory level, and focusing on increasing customer count through store expansion, online and mobile marketing endeavors and expansion of direct-to-consumer business. Further, the company's debt-free balance sheet also augurs well for future growth.
Consequently, we upgrade our recommendation on the stock to Outperform. Our target price of $42.00, 26.6X 2013 EPS, reflects this view.
Advance Auto Parts (NYSE:AAP) aims to improve its supply chain and vendor terms by pursuing an aggressive store expansion strategy. However, the sluggish economy, volatile gasoline prices and pricing are some of the challenges facing the company. AAP's profits fell 8.2% in the second quarter of 2012, missing the Zacks Consensus Estimate by $0.06 per share.
The company's revenues also dipped marginally by 1.3% due to lower store sales and lagged the Zacks Consensus Estimate of $1.48 billion. These factors have led us to downgrade our recommendation on the stock from Neutral to Underperform and set a target price of $64.00.
The stock is trading at a discount to the peer group, based on forward earnings estimates. The current P/E, which is close to the lower-end of the historical range, is at a 14% discount to the peer group for 2012.
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Shell's 1st CCS Project Gears Up
Royal Dutch Shell plc (NYSE:RDS.A) announced that it will progress with the construction of the carbon capture and storage (CCS) project in the Canadian oil sands play – the first of its kind in the region.
The project – named Quest – is expected to come online in 2015 and is part of the larger Athabasca Oil Sands Project –– a joint venture between Shell Canada (60%),
Chevron Corporation CVX) (20%) and
Marathon Oil Corporation MRO) (20%). The venture will also receive support from the Governments of Canada and Alberta.
The Quest CCS project – worth C$1.35 billion – will see funding of C$745 million coming form the Alberta government from a $2-billion fund set up to support CCS. The Canadian authority will put in almost C$120 million through its Clean Energy Fund, while the remaining C$485 million will be collected from the industry.
Located at the Scotford site, northeast of Edmonton, Alberta, the Quest venture will capture more than 1 million tons of carbon dioxide annually from Shell's Scotford upgrading process and transport the same via a 50-mile long pipeline to a northern site.
Quest – largely owned, designed and operated by Shell – will be the world's first commercial-level CCS project targeted to minimize the effects of greenhouse gas in the oil sands. The project will also contribute immensely in expanding and enhancing the domestic energy resource base.
The Hague, Netherlands-based Shell is engaged in oil and gas exploration, production, refining and marketing with operations and assets, worldwide. Shell currently retains a Zacks #3 Rank that translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.
The company displays a strong and diversified portfolio of development projects offering attractive long-term opportunities. The group – renowned for its success in bringing some of the largest and technically challenging capital-intensive projects to fruition – is expected to continue improving both the top and bottom lines in the forthcoming days.
However, the company's high exposure to the downstream business, its major natural gas focus, as well as lofty capital spending, may result in reduced returns going forward.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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