WFMI Whole Foods Market, Inc. (MM)

CHICAGO, Feb. 22, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Whole Foods Market (Nasdaq: WFMI) as the Bull of the Day and Novatel Wireless (Nasdaq: NVTL) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Campbell Soup Co. (NYSE: CPB), Toyota Motor Corp. (NYSE: TM) and Ford Motor Co. (NYSE: F).

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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:

Whole Foods Market (Nasdaq: WFMI) with a strong brand image offers investors one of the strongest growth profiles in the industry, and the stock is poised to surge as the demand for natural and organic products improves. The company is also revamping its pricing strategy and concentrating more on value offerings while maintaining healthy margins.

The stringent cost-control measures, effective inventory management and improved store-level performance are driving earnings growth. The company, in the wake of better-than-expected first-quarter 2011 results now expects sales growth between 10.7% to 12.8% and bottom-line in a range of 23% to 26% in fiscal 2011.

Moreover, a prudent capital investment is also translating into improved cash flows with lower debt level and a healthy balance sheet. We have a long-term Outperform recommendation on the stock. Our target price of $65.00, 35.9X 2011 EPS, reflects this view.

Bear of the Day:

We downgrade our recommendation for Novatel Wireless (Nasdaq: NVTL) to Underperform, just ahead of its fourth quarter of 2010 financial results. The recent trend of the 3G USB modem industry is indicating a glut of inventory on the part of the wireless carriers.

Several industry sources predicted that Verizon Wireless, a important customer of Novatel for its MiFi intelligent hotspot, may generate lukewarm demand in the first quarter of 2011 attributable to its huge modem inventory. Furthermore, following its closest rival AT&T, Verizon may start selling Apple Inc's iPad with a built-in 3G chipset. If this actually happens, it will drastically reduce the demand for MiFi, the best selling product of Novatel.

In addition, Novatel is now facing increasing competitive pressure from emerging Asian equipment developers. We do not find any immediate catalyst for Novatel and expects the company to report a net loss for the previous quarter.

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Lukewarm 2Q at Campbell's

Campbell Soup Co. (NYSE: CPB) reported fiscal 2011 second-quarter adjusted earnings of 71 cents per share, in line with the Zacks Consensus Estimate. However, quarterly earnings fell short of the year-ago results of 74 cents per share.

Campbell's net sales during the quarter declined by 1.0% year over year to $2,127 million, also missing the Zacks Consensus Estimate of $2,150 million. The decline was primarily caused by a 2% spike in promotional spending, partially offset by favorable currency translations of 1%.

Guidance

Looking ahead, Campbell expects sales to decline-to-increase in a (1%) to 1% band in fiscal 2011. The company forecasts adjusted earnings for the fiscal to decline at a clip of 1% to 3%.

Campbell Soup is one of the world's leading manufacturers of convenience food products. The company's diversified portfolio of well-established brands, including Campbell's, Erasco, Liebig, Pepperidge Farm, V8, Pace, Prego, Swanson, and Arnott's, offer a competitive edge, strengthening its well-established position in the market.

Ford Emulates Toyota's Russian Move

After Toyota Motor Corp. (NYSE: TM), Ford Motor Co. (NYSE: F) has also decided to join Russian automaker Sollers to manufacture and sell its vehicles in the country. Two of them signed an agreement to form a 50/50 joint venture.

The announcement came soon after Italian automaker Fiat SpA backed out of a partnership to produce up to 500,000 vehicles per year with the same Russian company. Ford Sollers will manufacture a range of Ford passenger cars, light commercial vehicles and engines at plants located in St. Petersburg region and the Republic of Tatarstan.

The venture will also operate a stamping facility that will render auto parts for the production, undertake research and development activities, and import and distribute Ford products, parts and accessories in Russia. The venture is expected to begin operations by the end of 2011. It has applied to the Russian government for approval.

Ford's move came a week after Toyota announced to enter into a tie up with Sollers and Japanese firm Mitsui & Co. to assemble and sell passenger vehicles at the latter's plant in Vladivostok, Russia. The tie-up will produce either a sedan or a sports utility vehicle designed by Toyota.

Toyota began producing vehicles in Russia in 2007 at its plant in St. Petersburg. The plant manufactures about 20,000 units of Camry sedan per year. On the other hand, Ford has started manufacturing vehicles in the country from 2002.

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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