For Immediate Release
Chicago, IL – November 30, 2012 – Zacks Equity Research highlights Unilever Plc (UL) as the Bull of the Day and NuStar Energy (NS) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Toyota Motor Corp. (TM), Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY).
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 Unilever Plc (UL) to Outperform from Neutral based on impressive third quarter 2012 results. Despite high input costs and a tough currency environment, Unilever posted healthy underlying sales growth of 5.9% on the back of both volume and pricing gains.
Increased investment in innovation and brand building also contributed to the growth. Organic sales in the emerging markets improved as well. The company maintained its dominant market share in all the business segments and recorded decent growth in spite of global economic crisis.
We are encouraged by Unilever's solid fundamentals and a wide portfolio of globally recognized flagship brands. Moreover, continuous innovation in all the segments adds to its growth prospects.
Following NuStar Energy's (NS) grim third quarter results, we are recalibrating our investment thesis on the midstream energy partnership to Underperform from Neutral. In particular, losses in its asphalt and fuel marketing segments (which together contribute roughly half of total income) adversely impacted NuStar's third quarter profits.
Though we welcome the partnership s decision to sell a 50% stake in its volatile asphalt operations, the continued poor outlook for the sector will be a further drag on NuStar's near-to-medium term EBITDA. We are also concerned by the partnerships high leverage. Considering these headwinds, we expect NuStar to perform below the industry, which gives investors little reason to hold the stock.
This is corroborated by our new Underperform recommendation. Our $40 price objective reflects a 2013 P/E multiple of 17.7x.
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Toyota Motor Corp. (TM) expects that its sales in the U.S. will top 2 million vehicles in 2012 depending on burgeoning demand for Camry sedan and Prius hybrid. Last time, when the automaker’s sales reached that level was in 2007, at 2.62 million vehicles. Logging a sales of more than 2 million vehicles in the year implies a 22% growth from 2011.
In the first nine months of the year, Toyota’s sales grew 29.5% to 1.72 million vehicles. Sales of Camry surged 36.5% to 344,714 units while sales of Prius leapt 91.2% to 200,114 units during the period (all on a daily selling rate basis).
Toyota saw more than threefold increase in profits to ¥257.92 billion ($3.28 billion) or ¥81.44 ($1.04) per share in the second quarter of fiscal year ended September 30, 2012 from ¥80.42 billion or ¥25.65 in the same quarter of prior fiscal year.
The increase in profits can be attributed to strong demand for Toyota vehicles as well as positive impact from the company’s cost control measures. However, profits were lower than the Zacks Consensus Estimate of $1.62 per share.
Revenues in the quarter grew 18.2% to ¥5.41 trillion ($68.75 billion) on a 14.9% rise in sales volume to 2.16 million units. Vehicle sales increased in all the regions, except Europe. Operating income more than quadrupled to ¥340.61 billion ($4.33 billion) from ¥75.39 billion in the second quarter of previous fiscal year.
For fiscal 2013 ending March 31, 2013, Toyota projected lower consolidated vehicles sales of 8.75 million units, down 50 thousand units from the prior guidance. The automaker also lowered its consolidated revenue outlook to ¥21.30 trillion (up 14.6% from fiscal 2012) from the prior guidance of ¥22.00 trillion. The downward revision of sales outlook was based on difficulties in Chinese and European markets.
However, it raised operating income guidance to ¥1.05 trillion (up 195.3% from fiscal 2012) from the prior level of ¥1.00 trillion and profits to ¥780.0 billion (175.1%) from the previous projection of ¥760.0 billion.
Toyota is the leading automaker in the world. Its product portfolio consists of a full range of models from passenger cars, minivans and trucks as well as related parts and accessories.
The company’s domestic competitors include Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY). Despite better results, the company currently retains a Zacks #3 Rank on its shares, which translates to a short-term (1 to 3 months) rating of Hold, owing to the global economic weakness and problems in China, the company’s one of the biggest markets.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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