Zacks Bull and Bear of the Day Highlights: Tyson Foods Inc., Baxter International, Wal-Mart, Target and Yum! Brands - Press Releases
For Immediate Release
Chicago, IL – May 6, 2010 – Zacks Equity Research highlights Tyson Foods Inc. (TSN) as the Bull of the Day and Baxter International (BAX) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Wal-Mart (WMT), Target (TGT) and Yum! Brands (YUM).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
Tyson Foods Inc. (TSN) reported better-than-expected first-quarter 2010 results. The company earned $0.42 per share (excluding special items), beating the Zacks Consensus estimate by $0.08.
The strong performance in the quarter was mainly driven by the Chicken segment. The strong sales growth in the chicken segment has boosted growth, and we believe will continue doing the same in the coming years. In addition, the company's vertically integrated business and its strong balance sheet augur well for the future operating performance.
Our long-term recommendation on Tyson Foods is Outperform as we anticipate it to perform better than the market.
We believe that Baxter International’s (BAX) focus on life-sustaining products insulates its results from economic downturns. The company has a strong product pipeline, with a number of promising products in final stages of clinical development.
However, the company faces significant product recall issues and has also lowered its sales, earnings per share and cash flow outlook for fiscal 2010. This prompted us to downgrade the stock to Underperform with a target price of $41.
Latest Posts on the Zacks Analyst Blog:
ISM Services Continues Growing
Of particular interest is the employment index, particularly this week with the employment report due out on Friday morning. There the news is not so good. The ISM numbers show that service sector employment is continuing to contract, the 28th month in a row that it has, with a reading of 49.5, down 0.3 points from last month.
However, I would note that the ISM services numbers have been distinctly at odds with what the BLS has been reporting recently, with private service sector employment expanding in each of the first three months of the year. It also seems at odds with the ADP report that came out this morning, which showed growth in service sector jobs and a contraction of goods producing jobs.
However, that contradiction might be more apparent than real. In the ISM calculations, construction is part of the non-manufacturing survey, and ADP noted that manufacturing actually gained jobs within the goods producing sector, while construction employment continues to be demolished.
On the other hand, inventories were increasing in the service sector, a sharp turn-around from contraction last month as the inventory sub-index rose to 54.5 from 46.5 in March. The 8.0 point rise was the biggest of any of the sub-indexes.
In sharp contrast, the manufacturing side moved from inventory expansion in March to a slight inventory contraction in April, and the 5.9 point drop was one of the biggest on the manufacturing side. With the exception of retail and warehousing, though, inventories are generally less important on the service side of the economy than they are on the manufacturing side (sometimes only amounting to what is in the office supply cabinet).
The respondents reported both that the amounts they were importing were increasing, as were their export orders. However, export orders were growing at a slightly slower pace as the export sub-index dropped 0.5 points to 57.0.
The import index, on the other hand, jumped 5.5 points to 56.5. But note that the export side still has the absolute advantage. If the dollar continues to strengthen, look for that advantage to wilt rather quickly.
Then again, exports are generally a smaller part of the business mix for non-manufacturing companies than they are for manufacturing firms. Service firms might not export that much, but some of the biggest importers are on the service side of the economy. After all, how much domestically produced stuff do you find these days in a Wal-Mart (WMT) or a Target (TGT)?
That’s not to say that service companies don’t have large international operations. Yum! Brands (YUM), for example, has far more restaurants overseas than they do here, but they are not delivering the Pizza Hut pies from here, they make them over there (and hence they are not exports).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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