CHICAGO, Aug. 22, 2011 /PRNewswire/ -- Zacks Equity
Research highlights Toyota Motor Corporation (NYSE: TM) as
the Bull of the Day and PMI Group Inc. (NYSE: PMI) as the
Bear of the Day. In addition, Zacks Equity Research provides
analysis Hewlett-Packard (NYSE: HPQ), Dell (Nasdaq:
DELL) and IBM (NYSE: IBM).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
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:
Toyota Motor Corporation (NYSE: TM) is the leading
automaker in the world in terms of sales and production. The
automaker has long played a pivotal role in the global market for
fuel-efficient and environment-friendly vehicles, influencing other
automakers to foray into the same market promoted by the
governments of many countries.
Good news is that the company expects its loss-making European
operations to revert to profit at the operating level for full year
2011. Moreover, its continued focus on the emerging markets is
expected to boost sales.
Therefore, we have upgraded the recommendation on the shares of
the company from Neutral to Outperform with a target price of
$90. Toyota shares carry a Zacks #1
Rank (Strong Buy).
Bear of the Day:
PMI Group Inc.'s (NYSE: PMI) second-quarter operating
loss was worse than the Zacks Consensus Estimate and widened year
over year as the company continued to suffer mortgage losses. We
expect losses and loss adjustment expenses from mortgage insurance
operations, increased valuation allowances, lower premiums earned
and shrunken investment income will continue to pressure PMI's
earnings.
While increasing persistency levels will drive domestic growth,
it will put additional pressure on capital. PMI Group is not able
to sell new policies.
To add to its woes, Arizona-based PMI Mortgage Insurance Co., the
main subsidiary, is short of funds, which is required to meet
regulatory requirements in Arizona. As such, the State Insurance
Department will likely bar it from selling new policies, which
might result in either rehabilitation or liquidation of the
unit.
Latest Posts on the Zacks Analyst Blog:
Uncertainty Driving Market Volatility
I don't think a recession is on the cards, but there is no doubt
that the economic picture remains fragile and mixed. Some measures
of economic health, such as regional manufacturing and consumer
confidence, appear to be in recessionary territory already. But
other metrics that capture trends in consumer spending, corporate
investments and the labor market are pointing towards positive,
though sub-par, economic growth.
So the best that can be said at this stage is that the economic
picture is uncertain and mixed. I am reasonably confident that the
underlying momentum in the economy will keep it in the positive
territory. But it will take us at least another few weeks to get a
better handle on the situation. Till then, brace yourself for a
bumpy ride.
In corporate news, we don't have anything significant on the
earnings front this morning. But we did have a couple of major
earnings reports after the close on Thursday.
Hewlett-Packard (NYSE: HPQ) came out with a positive EPS
surprise on inline revenue. But the computer giant guided lower,
confirming the consumer weakness that we saw in Dell's
(Nasdaq: DELL) results a couple of days back.
But the earnings report was not the most important news out of
Hewlett-Packard on Thursday; it was the announcement that they are
going the IBM (NYSE: IBM) way in their business model. They
want to get out of the PC business and bulk up on services. So,
they plan to sell the computer business and acquire a British
software firm.
Exiting from the low-margin commoditized PC business will be a
net long-term positive for the company's margins and returns. But
executing such major strategic moves is never easy or smooth. We
will have to wait and see how Hewlett-Packard's 'newish' management
team comes through on this plan.
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.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides
analysis from Zacks Equity Research about the latest news and
events impacting stocks and the financial markets.
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