For Immediate Release
Chicago, IL – September 19, 2013 – Zacks Equity Research highlights La-Z-Boy ( LZB- Free Report) as the Bull of the Day and MicroStrategy ( MSTR- Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Dollar Tree, Inc. ( DLTR- Free Report), JPMorgan Chase & Co. ( JPM- Free Report) and Wells Fargo & Company ( WFC- Free Report). Here is a synopsis of all five stocks:
Bull of the Day:
La-Z-Boy ( LZB- Free Report) recently delivered its 3rd consecutive positive earnings surprise on the back of a stellar 12.7% jump in same-store written sales for its Furniture Galleries® store network. This prompted analysts to revise their earnings estimates meaningfully higher for both this year and next, sending the stock to a Zacks Rank #1 (Strong Buy).
Based on current consensus estimates, analysts project 49% earnings growth this year and 21% next year. Given the strong earnings momentum and growth projections, its forward P/E multiple of 19 looks reasonable. This leaves plenty of upside for the stock to continue running higher over the next several weeks.
La-Z-Boy Incorporated is a residential furniture maker that markets its products under various brand names including La-Z-Boy, England, Lea, Kincaid, and American Drew. The company also operates a retail division of more than 330 franchise and company-owned stores.
La-Z-Boy reported better-than-expected results for the first quarter of its fiscal 2014 on August 20. The first quarter is typically a seasonally slow quarter for the company, but it's results this time were anything but sluggish. Earnings per share came in at $0.18, beating the Zacks Consensus Estimate by 3 cents. And it was more than double EPS of 8 cents in the same quarter last year.
MicroStrategy ( MSTR- Free Report) recently delivered weak second quarter results, prompting analysts to revise their estimates significantly lower for both 2013 and 2014. It was also the company's 4th straight earnings miss.
It is a Zacks Rank #5 (Strong Sell) stock.
Despite the poor earnings momentum, shares trade at a whopping 67x forward earnings. Investors should consider avoiding this stock until its earnings momentum improves.
MicroStrategy provides enterprise software platforms. Its products include: the MicroStrategy Analytics Platform; the MicroStrategy Mobile App Platform; the MicroStrategy Identity Platform, and the MicroStrategy Loyalty Platform. It was founded in 1989 and has a market cap of $1.2 billion.
MicroStrategy reported disappointing second quarter results on July 29. The company reported a loss of -14 cents per share, which was well below the Zacks Consensus Estimate calling for +39 cents. It was also well below earnings of +65 cents per share in the same quarter last year.
New Share Buyback Program at Dollar Tree
Recently, the board of directors at Dollar Tree, Inc. ( DLTR- Free Report) announced a new share repurchase program that authorizes the company to buy back shares worth $2 billion. This authorization overrides the previous buyback program announced in Oct 2011.
Dollar Tree also concluded a private placement deal worth $750 million worth of Senior Notes with the institutional investors. JPMorgan Securities LLC, a subsidiary of JPMorgan Chase & Co. ( JPM- Free Report) and Wells Fargo Securities, LLC, a wing of Wells Fargo & Company ( WFC- Free Report) acted as the joint placement agents. The notes include $300 million of 4.03% Senior Notes maturing in Sep 2020, $350 million of 4.63% Senior Notes maturing in Sep 2023 and $100 million of 4.78% Senior Notes maturing in Sep 2025.
Further, Dollar Tree entered into a deal with JPMorgan Chase Bank, N.A – a subsidiary of JPMorgan – to buy back $1 billion of shares under a variable maturity accelerated share repurchase program. Half of the shares to be bought back under this program are collared and the other half are uncollared.
The $1 billion will be financed through the proceeds of the above-mentioned placement deal and $250 million in cash. As of Aug 3, 2013, the company had $250 million outstanding under its revolving credit facility and $413.7 million as cash available.
Dollar Tree has been meticulously returning capital to its shareholders. We believe that the latest capital activities are part of the company’s strategy to maximize shareholder value.
Currently, Dollar Tree carries a Zacks Rank #3 (Hold).
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