Zacks Equity Research highlights: The Cooper Companies (NYSE: COO) as the Bull of the Day and Staples, Inc. (Nasdaq: SPLS), as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Suncor Energy Inc. (NYSE: SU), EnCana Corp. (NYSE: ECA) and Canadian Natural Resources Ltd. (NYSE: CNQ).
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:
We reaffirm our Outperform rating on The Cooper Companies (NYSE: COO) following its healthy second-quarter fiscal 2011 results. Earnings beat the Zacks Consensus Estimate while profit increased greatly year over year. Industry outlook has improved with an expectation of rising utilization in emerging nations and a higher proportion of sales of value-added lenses.
Cooper proves to be a turnaround story based on rationalization of plants and better execution. It remains a leader in torics. Clear milestones for new product launches give scope for gains going forward. Recently, raised guidance for the fiscal year may yet prove conservative given room for further margin expansion.
Cooper has reduced debt with improved free cash flow, which opens up room for tuck-in acquisitions on a geographic basis. However, capital markets are weak with competition from large players.
Bear of the Day:
Staples, Inc. (Nasdaq: SPLS) posted lower-than-expected first-quarter 2011 results. The quarterly earnings of $0.28 per share missed the Zacks Consensus Estimate of $0.32 and remained flat compared with the prior-year quarter. Given the underperformance, the company took a cautious stance and trimmed its fiscal 2011 earnings guidance.
The company now expects earnings between $1.35 and $1.45 per share, down from a range of $1.50 to $1.60 projected earlier. Management now forecasts sales to be flat to marginally positive in the second quarter and to increase in the low single-digits in fiscal 2011.
We remain cautious about the macroeconomic environment and sluggish job market. As a result, consumers and small businesses still remain watchful on their spending. We observe that the demand for office products is closely tied to the health of the economy.
Latest Posts on the Zacks Analyst Blog:
Suncor Energy: Worth a Look
Canada’s biggest energy firm and the largest oil sands outfit Suncor Energy Inc. (NYSE: SU) has been a Zacks #1 Rank (Strong Buy) stock since May 17, 2011. The independent energy exploration and production company has seen its estimates move up following its robust first quarter results in early May. Suncor’s attractive fundamentals, positive outlook, and the recent optimism about economic recovery have inspired this bullishness.
Suncor has significant oil sands and conventional production platform, huge long-lived oil-sands reserves and an impressive downstream portfolio. The company’s asset base includes substantial conventional reserves and production at offshore Eastern Canada and in the North Sea, which generate strong margins and should provide free cash flow to fund future oil sands expansion.
Embarking on a series of divestitures, Suncor, which competes with other Canadian behemoths like EnCana Corp. (NYSE: ECA), Canadian Natural Resources Ltd. (NYSE: CNQ), etc. – is getting back on track following its merger with Petro-Canada.
Additionally, given our bullish outlook for the medium-term oil price scenario, we think Suncor is nicely positioned to benefit from its leverage to commodity prices. In our opinion, Suncor is one of the best positioned companies to take advantage of the oil price recovery over the next several years. With a large portfolio of growth opportunities, unique asset base and high return potential in the long run, the company has a competitive edge over its peers.
Suncor recently unveiled its ten-year business strategy. In particular, the firm outlined plans to increase production to more than 1 million barrels of oil-equivalent per day (MMBOE/d) by 2020. Suncor expects oil sands production to grow by 10% and company-wide production to grow by 8% in each of the next ten years.
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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