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Autoliv, BB&T, Hertz Global Holdings, Dollar Thrifty Automotive Group and Avis Budget Group

^{Published on 2010-09-14 14:16:55 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights: Autoliv (NYSE: [ ALV ]) as the Bull of the Day and BB&T (NYSE: [ BBT ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Hertz Global Holdings Inc. (NYSE: [ HTZ ]), Dollar Thrifty Automotive Group Inc. (NYSE: [ DTG ]) and Avis Budget Group Inc. (NYSE: [ CAR ]).

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 ]:

Autoliv (NYSE: [ ALV ]) maintains a stable market share globally, supported by the increasing importance of vehicle safety needs. Furthermore, the company aims to tap huge market potential by expanding into low-cost countries.

The company's balance sheet is solid with low debt and healthy cash flow. In the most recent quarter, the company's profit significantly improved from the year-ago level, and far exceeded the Zacks Consensus Estimate by $0.37 per share.

We have, therefore, upgraded the recommendation on shares from Neutral to Outperform and set a target price of $69. This amounts to a P/E ratio of 12.3X our 2010 EPS estimate.

[ Bear of the Day ]:

We are downgrading our recommendation on BB&T (NYSE: [ BBT ]) to Underperform based on concerns related to rising non-interest expenses and deteriorating credit quality.

Higher non-interest expense was among the negatives in BB&T's second quarter earnings report. Current challenges related to the housing market and pressure on the credit quality raise concerns on near-term growth.

BB&T has significant exposure in residential mortgage loans, direct retail residential loans, sales finance and revolving credit loans. We are concerned about an increase in the provision for credit losses from these loans in the near- to mid-term.

Latest Posts on the Zacks [ Analyst Blog ]:

Hertz Ups Bid for Dollar Thrifty

Hertz Global Holdings Inc. (NYSE: [ HTZ ]) has raised its offer price for Dollar Thrifty Automotive Group Inc. (NYSE: [ DTG ]) to $50.00 per share, amounting to $1.56 billion. The offer consists of $43.60 in cash (including about $6.87 a share to be paid by Dollar Thrifty as a special cash dividend) and 0.6366 of a Hertz common share. Per the new agreement, Hertz Global added $10.80 a share to the cash consideration from the original $32.80 per share.

Earlier in April, Hertz Global had proposed to acquire Dollar Thrifty for a purchase price of $41.00 per share. The purchase comprised an 80% cash consideration and 20% in stock.

Antitrust clearance is a central issue in the deal. If the clearance is not obtained, the company will have to pay a reverse termination fee of $44.6 million to Dollar Thrifty. Hertz Global is also in the process of divesting its low-cost unit, Advantage Rent-a-Car, to speed up the transaction.

The acquisition of Dollar Thrifty will help Hertz Global serve rental customers in six continents from approximately 9,800 locations. In the U.S., the company will be able to offer a full range of rental options from Hertz to Dollar Thrifty, giving it a competitive edge over its competitors. Dollar Thriftya™s global exposure, complementing Hertza™s, will help the consolidated company fortify a rental strategy in Europe and in other markets.

When Hertz Global had initially proposed the Dollar Thrifty acquisition, it had already identified synergies worth at least $180 million, primarily in fleet, IT systems and procurement, which would aid in a lower cost of operation.

The companya™s competitor, Avis Budget Group Inc. (NYSE: [ CAR ]), is also in the fray to acquire Dollar Thrifty. Earlier this month, Avis Budget Group offered $40.75 a share in cash and 0.6543 shares for each Dollar Thrifty share, giving a total value of just under $1.4 billion. This bid was an increase from an earlier offer of $39.25 per share in cash and 0.6543 shares for each Dollar Thrifty share. However, with Hertz Global increasing the bid value, Avis Budgeta™s proposal is likely to be shelved.

During the second quarter conference call, management guided full-year 2010 revenue in the range of $7.5 billion to $7.7 billion and earnings of 43 cents to 45 cents.

The Zacks Consensus Estimate for fiscal third-quarter 2010 earnings is 35 cents per share. For full year 2010 and 2011, the Zacks Consensus Estimates are, respectively, 45 cents per share and 75 cents per share.

The quantitative Zacks #3 Rank (short-term Hold rating) for Hertz Global indicates no clear directional pressure on the shares over the near term.

Get the full analysis of all these stocks by going to [ http://at.zacks.com/?id=2649 ].

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