For Immediate Release
Chicago, IL – January 26, 2012 – Zacks Equity Research
highlights BJ's Restaurants (BJRI) as the Bull of
the Day and Bank of America Corp. (BAC) as the
Bear of the Day. In addition, Zacks Equity Research provides
analysis on Macy’s Inc. (M), J. C. Penney
Company Inc. (JCP) and Martha Stewart Living
Omnimedia Inc. (MSO).
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:
BJ's Restaurants (BJRI) remains well positioned
to sustain its growth momentum, while generating improved earnings
on the heels of efficient operations and innovative offerings.
These also help the company to drive traffic and post robust
same-store sales growth. The company also boasts a debt-free
balance sheet.
The company remains committed to its unit growth beyond 2011 and
believes that there is room for at least 300 restaurants.
Additionally, the core Californian market, which had been badly hit
during the housing downturn, has also begun to turn around. The
gradual betterment of this market, one of the major operational
locations for the company, is an important tailwind for BJ's.
Our six-month target price of $55.00 equates to about 41.7x our
estimate for 2012. The target price implies an expected total
return of 20.6% over that period. We recommend an Outperform rating
on the shares.
Bear of the Day:
Bank of America Corp.'s (BAC) fourth-quarter
earnings came in substantially lower than the Zacks Consensus
Estimate. The sale of non-core assets and accounting gains made it
possible for the company to remain profitable during the quarter.
However, excluding nonrecurring items, the company would have
incurred a loss.
Higher non-interest expense was the primary headwind in the
quarterly numbers. Also, capital and liquidity remained weak. For
the full year 2011, the company reported earnings of $0.01 per
share, a nickel lower than the Zacks Consensus Estimate.
Our six-month target price of $6.50 per share equates to about
7.0x our earnings estimate for 2012. This price target implies an
expected negative total return of 8.1% over that period, which is
consistent with our long-term Underperform recommendation on the
shares.
Latest Posts on the Zacks Analyst Blog:
Macy’s Sues Martha Stewart
Macy’s Inc. (M) did not welcome the licensing
deal between J. C. Penney Company Inc. (JCP) and
Martha Stewart Living Omnimedia Inc. (MSO) that
took place in December 2011, and it went on to file a lawsuit in
New York State Supreme Court against the latter for the breach of
contract, the Associated Press reported.
Since 2007, Macy’s has been selling an exclusive line of
products by Martha Stewart under a five-year deal. Macy’s now
claims that Martha Stewart’s agreement to sell certain home and
lifestyle merchandise at J. C. Penney’s stores violates that
exclusive pact, which it shares with Martha.
It seems Martha Stewart’s recent accord with J. C. Penney has
resulted in a bitter relationship with Macy’s, who is now seeking a
preliminary injunction from the court to scuttle the deal.
By virtue of the deal, J. C. Penney acquired a 16.6% stake in
Martha Stewart Living, and plans to open Martha Stewart retail
departments within its stores in February 2013 under a mutual
10-year pact.
J. C. Penney invested $38.5 billion (or $3.50 per share) to buy
11 million newly-issued shares of Martha Stewart Living. Thus, it
become a major stockholder and now owns two seats in the latter’s
board. The deal was viewed as a turning point for J. C. Penney,
which has been losing its foothold in the market as it struggles
against retail chains such as Macy’s.
Macy’s decision of blocking the deal might also boomerang, since
Martha Stewart brands are known for their extensive range of
lifestyle products and helps in drawing customers into the
stores.
On the other hand, if the deal does not come to fruition, it
would hurt Martha Stewart Living, as the contract with J. C. Penney
would fetch the company $200 million in royalties, design fees and
advertising commitments over the initial period. The company, which
operates through three divisions: Publishing, Broadcasting and
Merchandising, has long been grappling with waning sales, and the
deal might help it regain its lost pace.
Currently, we have a long-term Outperform rating on Macy’s. The
stock holds a Zacks #2 Rank that translates into a short-term Buy
rating.
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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BANK OF AMER CP (BAC): Free Stock Analysis Report
BJ'S RESTAURANT (BJRI): Free Stock Analysis Report
PENNEY (JC) INC (JCP): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
MARTHA STWT LIV (MSO): Free Stock Analysis Report
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