For Immediate Release
Chicago, IL – June 19, 2012 – Zacks Equity Research highlights Marriott International (MAR ) as the Bull of the Day and Liberty Global, Inc. (LBTYA) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Shaw Communications Inc. (SJR), Telus Corp. (TU) and BCE Inc. (BCE).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Marriott International's (MAR) first quarter 2012 earnings were slightly above the Zacks Consensus Estimate by $0.01. Going forward, the company's strong pipeline, significant international exposure, solid balance sheet, aggressive share-buyback strategy, lower operating cost structure and increased market share augur well for its earnings. The company recently hiked its quarterly dividend by 30%.
Moreover, the spin-out of its timeshare business is promising, as Marriott is able to concentrate more on its core hotel management and franchise business. Additionally, considering the increased global demand, modest supply growth, accelerating group business and strong pricing environment, we expect the top line to improve further.
Marriott s deal of managing Gaylord also remains strategically sound. Hence, we reiterate our Outperform stance on the stock. Our six-month target price of $44.00 equates to 26.5x our earnings estimate for 2012. Combined with a quarterly dividend of $0.13 per share, this price target implies an expected total return of 19.4% over that period.
We downgrade our recommendation on Liberty Global, Inc. (LBTYA) to Underperform based on two factors (1) an extremely high-level of current valuation of the company, and (2) precipitous macro-economic fluctuations in the European region, which is the core business area of the company.
Liberty Global reported mixed financial results for the first quarter of 2012. Though revenue beats the Zacks Consensus Estimate, net income fell below it. Moreover, business integration risks persist as Liberty Global has recently acquired several related businesses.
With respect to our fiscal 2013 earnings estimate, the stock is trading at 22.4x, a huge premium to both the S&P 500 average and the industry average. We believe the stock is currently overpriced and thus downgrade our rating to Underperform with a target price of $42, based on 35.6x our fiscal 2012 earnings estimate.
Latest Posts on the Zacks Analyst Blog:
Shaw Communications to Underperform
We are downgrading our recommendation on Shaw Communications Inc. (SJR) to Underperform, ahead of the release of its third quarter-fiscal 2012 financial results. The company continues to lose basic cable TV customers, reflecting that management is yet to make a turnaround. Since the company already abandoned its wireless venture, it is very crucial for Shaw Communications to execute video offerings properly in order to sustain its future growth. Furthermore, the Media segment is facing continued softness of the Canadian advertisement market.
Apart from video segment, the company markedly improved its customer base for other offerings in the previous quarter. However, this impressive performance is related to massive spending for aggressive promotional activities, resulting in sheer fall of EBITDA margin and free cash flow. Consequently, the company reduced its previous outlook for fiscal 2012.
Shaw Communications offers triple-play cable TV and satellite TV, Internet, and wireline phone services, whereas its main competitor Telus Corp. (TU) offers Cable TV, Internet, wireline, and wireless services. Telus shares a national wireless network with Bell Canada, a division of BCE Inc. (BCE). Its popular Optik TV, offering IPTV services, is quickly eroding Shaw’s market share. In addition, Shaw Communications will now lack a major competitive weapon, which is the wireless service.
Shaw Communications decided to put aside its much-hyped plan to enter into the wireless market of Canada. Instead, the company will now build a cheaper Wi-Fi network, which will enable offloading 3G/4G wireless data traffic across a short distance from landline Internet access points. We believe the decision of Shaw Communication to abandon its wireless venture will significantly reduce the company’s competitive strength in a highly lucrative Canadian telecom market.
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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