For Immediate Release
Chicago, IL – October 12, 2012 – Zacks Equity Research highlights Manulife Financial Corp. (MFC) as the Bull of the Day and Lowe's Companies (LOW) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on SIRIUS XM Radio Inc. (SIRI), Pandora Media Inc. (P) and Liberty Media Corp. (LMCA).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We are upgrading our recommendation on the shares of shares of Manulife Financial Corp. (MFC) to Outperform from Neutral following the recent announcement by the company to expand into Korea, which marks an expansion in its key Asian market. The company has also set up a head office in Cambodia. We believe further penetration in Asian markets will fuel long-term earnings growth for the company.
Manulife has achieved a great deal in reducing its exposures to potential equity markets as well as interest rates risk. It has also reduced its exposure towards interest sensitive products.
Our six-month target price of $15.00 equates to about 39.5x our earnings estimate for 2012. We view the $0.52 per common share annual dividend as secure, implying an expected total return of about 25.0% over that period. This is consistent with our Outperform recommendation on the shares.
We downgraded our recommendation on Lowe's Companies (LOW) to Underperform following dismal second-quarter 2012 results. The quarterly earnings of $0.65 per share missed the Zacks Consensus Estimate of $0.70, and fell 4.4% year-over-year. Net sales slid 2% to $14,249 million, and fell short of the Zacks Consensus Estimate of $14,421 million.
Consequently, Lowe's trimmed its outlook, as it remains concerned about the housing market and the sluggish economic recovery. Management now expects fiscal 2012 earnings to be $1.64, down from a range of $1.73 to $1.83 per share forecasted earlier. Management now projects total sales for fiscal 2012 to remain flat with fiscal 2011, and expects comparable-store sales growth of 0.5%.
We believe that spending on big remodeling projects will likely remain under pressure until the housing market stabilizes, inventory levels normalize and consumer-spending rebounds. Our target price of $28.00, 17.0X 2012 EPS, reflects this view.
Latest Posts on the Zacks Analyst Blog:
SIRIUS XM Gains Huge Subscriber Numbers
SIRIUS XM Radio Inc. (SIRI) has declared that the company gained a massive 445,921 net subscriber addition in the just concluded third quarter of 2012. This depicts nearly 34% year-over-year upside and demonstrated the best ever third quarter net subscribers’ addition in the company’s history. Total subscribers base at the end of the third-quarter 2012 was 23,365,383, up 9.5% year over year.
The strong performance was mainly spurred by impressive management execution on the back of rising auto industry sales. As per management, the net subscribers’ growth momentum of the company will further expand in the rest of 2012 and has raised its estimation to approximately 1.8 million of net subscribers’ addition in 2012. This is the third time management has raised its net subscribers’ figure in 2012.
SIRIUS XM has a very strong business relationship with OEMs (original equipment manufacturers). The company currently commands an estimated 70% market share of new cars sold in the U.S. In January 2012, SIRIUS XM raised the prices of its services. Subscription prices were raised almost 12% to $14.49 per month. Despite this, the company holds its market share in the face of growing competition from Pandora Media Inc. (P) and Spotify.
Meanwhile, SIRIUS XM is currently fighting a hostile takeover bid from Liberty Media Corp. (LMCA), its most powerful creditor. Liberty Media has filed a new application to the U.S. Federal Communications Commission, in which the company stated its intention to acquire more than 50% of SIRIUS XM, so that it can take full control of the Board of SIRIUS XM. Liberty Media withdrew its previous application with Federal Communications Commission (:FCC) to de facto control SIRIUS XM. Instead, the company is now willing to get a full control. Liberty Media at present has 49.6% stake in SIRIUS XM’s total outstanding shares.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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