CHICAGO - (Business Wire)
Zacks Equity Research highlights
GameStop (NYSE: GME) as the Bull of the Day and
SanDisk (Nasdaq: SNDK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on
Safeco Corp. (NYSE: SAF),
STMicroelectronics N.V. (NYSE: STM) and
Tech Data Corp. (Nasdaq: TECD). Full analysis of all these stocks is available at
http://at.zacks.com/?id=2676.
Here is a synopsis of all five stocks:
Bull of the Day: GameStop (NYSE: GME)
GameStop delivered stellar results again. Its second quarter sales were $104 million above the consensus forecast, and EPS beat the consensus estimate by $0.04. Looking ahead, management’s guidance for the second half of the year was in-line with expectations. Unlike most other areas of retail, video game sales remain strong. We believe this momentum will continue through next year.
We are once again increasing our estimate. Our 2008 EPS estimate goes from $2.42 to $2.52 and our 2009 EPS estimate goes from $3.01 to $3.10. We maintain our Buy rating and our $60 target price.
Bear of the Day: SanDisk (Nasdaq: SNDK)
Following disappointing Q2 results, SanDisk announced measures to slow supply growth, including delaying the next phase of production ramp in Fab 4 as well as investment in Fab 5. We believe pricing is likely to remain weak until demand improves, which is not likely until the consumer spending picture strengthens.
We therefore do not expect any meaningful improvement through the end of the year and believe there is risk of further downside. We therefore maintain a Sell rating on SNDK shares with a six-month price target of $10.00.
Latest Posts on the Zacks Analyst Blog:
Safeco Corp. (NYSE: SAF)
Safeco Corporation is among the twenty largest property/casualty insurers in the United States, writing net premiums of $5.6 billion in 2007. The company’s operating earnings were $1.60 per share, five cents below our expectations. They were down 3.0% year-over-year, driven by decline in premiums and substantially higher catastrophe losses. Liberty Mutual acquisition of Safeco is expected to close by the end of 3Q08. Therefore, given the takeout price of $68.25 per share, we see limited upside to owning the shares of Safeco at this time. Hence we reiterate our Hold recommendation.
STMicroelectronics N.V. (NYSE: STM)
STMicroelectronics N.V. (STM) is a global independent semiconductor company, which designs, develops, manufactures, and markets a broad range of semiconductor integrated circuits (ICs) and discrete devices.
Shares of STMicroelectronics are trading at a level where they are fairly valued in relation to its peers, in our opinion. We feel STM should trade between 18.1x to 18.5x our adjusted 2008 estimates until we have more visibility into 2008 after the restructuring of its manufacturing facilities and integration of acquired companies which are expected to be dilutive to earnings in the near term.
Tech Data Corp. (Nasdaq: TECD)
Tech Data Corp. reported sales of $6.166 billion and earnings per share of $0.45. This was in-line with consensus estimates of $6.11 billion and $0.46 per share.
The management also issued third quarter sales guidance of $6.3-$6.5 billion, which was slightly lower than the $6.5 billion the market expected. Pricing pressures in North America and slowing economic growth in Europe will negatively affect Tech Data’s results. We are boosting our sales forecasts, but reducing our earnings estimates, due to lower profit margin assumptions.
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.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
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