Zacks Bull and Bear of the Day Highlights: United Therapeutics, Superior Industries International, Bank of America, Deutsche Bank and Royal Bank of Scotland Group

Zacks

For Immediate Release

Chicago, IL – September 28, 2012 – Zacks Equity Research highlights United Therapeutics Corp. (UTHR) as the Bull of the Day and Superior Industries International (SUP) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Bank of America Corporation (BAC), Deutsche Bank AG (DB) and The Royal Bank of Scotland Group Plc (RBS).

 

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:

United Therapeutics Corp.'s (UTHR) second quarter earnings of $1.43 per share were well above the year-ago earnings of $1.19 and the Zacks Consensus Estimate of $1.12. Higher revenues led to the improvement in earnings. The company maintained its guidance for 2012. We believe the company is well-positioned to gain share in the pulmonary arterial hypertension (:PAH) market.

Lead product Remodulin continues to look very strong in both the intravenous (:IV) and subcutaneous (:SC) forms. With the approval of Adcirca and Tyvaso, the company has a varied range of therapies available for the treatment of PAH. We believe the company's PAH product portfolio will drive strong top-and bottom-line growth.

We maintain our Outperform recommendation on United Therapeutics, which carries a Zacks #2 Rank (short-term Buy rating). We have raised our target price by $5 to $70 based on the strong second quarter results. Our new price target is based on 14.0x our 2012 EPS estimate.

 

Bear of the Day:

 

Superior Industries International (SUP) faces significant customer concentration risks, as the Detroit Big Three represent about 75% of its sales. Further, unfavorable product mix and a weak Mexican peso continue to mar the company's results.

In the most recent quarter, the company has disappointed by posting a significant 56.5% fall in profits to $6.4 million and missed the Zacks Consensus Estimate by $0.06 per share. Further, its revenues of $215.1 million were also lower than the Zacks Consensus Estimate of $222.0 million.

As such, we have downgraded our recommendation on the company's shares from Outperform to Underperform and set a target price of $17.00. Our long-term recommendation on the stock indicates that it would perform below the overall market, and our target price -- 18.5x our 2012 EPS estimate -- reflects this view.

Latest Posts on the Zacks Analyst Blog:

 

 

BofA to Slash Global Headcount

 

Bank of America Corporation (BAC) recently announced its plan to trim down workforce globally amidst the sluggish economic recovery and the deepening Euro-zone crisis. It plans to layoff 40 jobs across Asia and nearly 10 in Australia.

As per The Wall Street Journal, Merrill Lynch – a wing of the BofA – plans to dismiss nearly 40 people or 4% of its entire workforce in Asia. The layoffs will mainly be centered on its global markets unit, which deals in fixed income, equities, currencies and commodities. The weak trading volumes, deteriorating commission rates on trades and a dearth of initial public offerings are the primary reasons for these eliminations.

Further, as per Deal Journal Australia, Merrill Lynch will begin fresh round of dismissals from its Australian operations. The number is not yet specified but it is estimated that nearly 10 of its staff will get pink slips. The feeble performance of equity markets and a glum economic scenario have forced BofA to trim down its headcount.
 
Earlier this month, BofA announced its plans of speeding up the estimated 16,000 job cuts by the end of the current year. This included 5,300 employees in consumer banking and 3,200 in the unit that manages new mortgages. In addition, reductions are expected in a unit that supervises troubled loans.

These job cuts are part of its ‘Project New BAC’– the efficiency improvement initiative launched by the bank to rationalize its operations and shed non-core assets. The ongoing measures, taken to enhance the performance, reflect BofA’s constant struggle to overcome dodging issues of a weak economy, a low interest rate environment, legal hassles as well as losses at its mortgage unit. However, the layoffs in Asia and Australia are not a part of the abovementioned project.

Similar Actions by Other Banks

Several other multinational financial institutions have initiated job cuts in their Asian operations since the deepening Euro-zone crisis is threatening the economic growth in the region. In March, Deutsche Bank AG (DB) declared to retrench 85 members of its Japanese and Hong Kong equities unit staff.

Similarly, The Royal Bank of Scotland Group Plc (RBS) is planning to pull down shutters of its cash equities, equity capital markets and corporate finance units in Korea, as well as cash equities operations in Indonesia and Singapore, thereby dismissing approximately 70 people. Further, Macquarie Group Limited, Australia’s biggest investment bank, has removed about 20 people, or 10% of its investment banking workforce in Asia.

Our Take

The sluggish market recovery, coupled with the ongoing Euro-zone crisis, will force banks to take up cost-cutting measures vigorously in order to maintain a sound capital buffer for withstanding any financial crisis.

 

 

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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Read the analyst report on UTHR

Read the analyst report on SUP

Read the analyst report on BAC

Read the analyst report on DB

Read the analyst report on RBS

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