For Immediate Release
Chicago, IL – April 10, 2012 – Zacks Equity Research highlights
Aetna Inc. (AET) as the Bull of the Day and
Citi Trends, Inc. (CTRN) as the Bear of the Day.
In addition, Zacks Equity Research provides analysis on
Alcoa (AA), AOL (AOL) and
Microsoft (MSFT).
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:
We reiterate our outperform rating on Aetna
Inc. (AET) prior to the release of its first-quarter
earnings scheduled on April 25, 2012, to reflect its
better-than-average operating fundamentals and expected strong
performance in 2012.
The company ended the year 2011 with better performances,
demonstrating growth in membership, revenues, operating margins and
cash flow on the back of low medical utilization, pricing
discipline, medical cost management strategies and cost controls.
In 2011, the company made strategic investments in acquisitions and
technologies, with the intent to extend its core health business
and also to capitalize on exciting new consumer as well as provider
opportunities emerging in the marketplace.
Aetna's strong operating results and significant capital
generation will allow it to continue investing for the future. We
expect the company to keep performing better in 2012. The Zacks
Consensus estimates earnings of $1.39 per share for first quarter
2012, which translates into an expected earnings growth of 10.5%
year over year.
Bear of the Day:
Citi Trends, Inc.'s (CTRN) falling comparable
store sales, coupled with rising cost of goods sold and operating
expenses, battered fourth-quarter 2011 results. The company
incurred a quarterly loss of $0.18 per share, falling drastically
from the year-ago quarter earnings of $0.64 per share. The results,
however, bettered the Zacks Consensus Estimate of a loss of $0.20
per share.
Further, due to uncertainty hovering around sales, given the
global economic unrest, the company decided not to provide any
guidelines unless it finds any near-term catalysts to drive sales.
Intense competition from other retailers, seasonal nature of
business and risks associated with sourcing merchandise from
developing countries may further undermine the company's future
growth prospects.
Currently, we are maintaining a long-term Underperform
recommendation on the stock. Our target price of $10.00 is based on
P/CF (price-to-cash flow) multiple of 8.27x.
Latest Posts on the Zacks Analyst Blog:
Jobs & the Market: Weather or
Not?
In the run-up to the March jobs report, a number of economic
forecasters had started wondering about the extent of temporary
contribution from this year’s unusually warm winter. Even Ben
Bernanke found the labor market strength of the last few months
difficult to reconcile with the relatively slow pace of underlying
economic improvement. We will know for sure only after we get the
April jobs numbers in about three week, but weather seems to be the
most plausible explanation for March’s unexpected under-200K labor
market reading.
The government’s monthly household survey (the unemployment rate
comes out of this report) lists the number of people not at work
because of weather. The non-seasonally adjusted March reading
showed an 82K drop on this count, significantly below the
historical level for this month. The same number for the preceding
three months was above trend compared to history, meaning that the
weather gains of the pre-March months likely got reversed in March.
The persistent downtrend in weekly jobless claims and other labor
market indicators over the last many months would argue against a
fundamental weakness in underlying momentum.
In corporate news, the first quarter earnings season gets underway
unofficially on Tuesday with Alcoa’s (AA) report,
with aggregate earnings growth expectations at their lowest level
since the start of earnings recovery in 2009. Barring unusual
negative surprises, I would expect this earnings season to be
largely uneventful. Given the low hurdle rates as a result of
subdued expectations, the focus will be management guidance for the
coming quarter, particularly with how they see the Chinese and
European situation impacting their profitability.
In other news, shares of AOL (AOL) will be in the
spotlight today after the company announced the sale of over 800
patents to Microsoft (MSFT) for $1.06 billion in
cash.
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
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which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150
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ALCOA INC (AA): Free Stock Analysis Report
AETNA INC-NEW (AET): Free Stock Analysis Report
AOL INC (AOL): Free Stock Analysis Report
CITI TRENDS INC (CTRN): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
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