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EGM 8 February 2012

Estee Lauder Companies, RadioShack, Compuware, Williams Companies and Shutterfly


Published on 2011-12-27 06:40:18 - Market Wire
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Zacks Bull and Bear of the Day Highlights: Estee Lauder Companies, RadioShack, Compuware,... -- CHICAGO, Dec. 27, 2011 /PRNewswire/ --

Zacks Bull and Bear of the Day Highlights: Estee Lauder Companies, RadioShack, Compuware, Williams Companies and Shutterfly

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CHICAGO, Dec. 27, 2011 /PRNewswire/ -- [ Zacks Equity Research ] highlights: Estee Lauder Companies (NYSE: [ EL ]) as the Bull of the Day and RadioShack Corp. (NYSE: [ RSH ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Compuware Corp. (Nasdaq: [ CPWR ]), Williams Companies (NYSE: [ WMB ]) and Shutterfly (Nasdaq: [ SFLY ]).

(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 ]:

Estee Lauder Companies' (NYSE: [ EL ]) first-quarter 2012 earnings of $1.41 per share surpassed both the Zacks Consensus Estimate as well as the year-ago result by 19.5% and 45.0%, respectively. The buoyant purchasing power of the affluent class who shop for products from cosmetics to big-ticket items also fueled strong sales in the luxury sector.

While skin care segment thrived during the quarter, travel retail gave a boost to the quarterly sales of the company. Successful recent launches coupled with unparalleled innovations backed the Estee Lauder's strong business in the quarter. The company also raised its full-year earnings guidance by 25 cents from its previous estimates of $4.20 per share provided during August 2011.

Management further boosted dividend by 40% and declared a 2:1 stock split. Our six-month target price of $129.00 per share equates to about 28.4x of earnings estimate for 2012. Currently, we upgrade our long-term recommendation from Neutral to Outperform.

[ Bear of the Day ]:

RadioShack Corp. (NYSE: [ RSH ]) difficulties persist as the company continues its disappointing performance. Precipitous decline of the signature and consumer electronics retail businesses, adverse product-mix toward low-margin devices, and a volatile macro-economic scenario in the U.S. are taking their toll on the company's financials.

Weaker-than-expected growth of the mobile platform and growing marketing expenses are other near-term concerns. Management provided a tepid outlook for the ensuing fourth quarter of 2011.

In the previous quarter, comparable store sales for the company-operated stores and kiosks (those opened at least a year) declined 4% year over year. This is a key retail performance indicator measuring growth from the existing sales locations. We have thus downgraded our recommendation on RadioShack to Underperform.

Latest Posts on the Zacks [ Analyst Blog ]:

Holiday Cheer…Right?

Of Friday morning's economic docket, we got a weaker-than-expected reading from the November Personal Income & Outlays report, while the Durable Goods report came in a tad weaker as well. The New Home Sales numbers come out a little later. Growth in Personal Income came in weaker than expected, while the savings rate ticked further down a bit. Consumer spending, which accounts for more than two thirds of the economy, increased at a 0.1% pace in November, while the expectation was for a 0.3% increase. Consumer spending had increased 0.1% and 0.7% in October and September, respectively.

While Thursday's GDP report saw a negative revision to third quarter consumer spending, the overall tone of recent incoming data has been pointing towards continued momentum on the spending front. Initial jobless claims have consistently dropped in the last three weeks, reaching their lowest level since April 2008. This appears to be showing up in consumer confidence readings, which has perked up lately after staying down in the summer. All of this has pushed up GDP growth expectations for the current quarter, which remains above 3% at present.

In corporate news, Compuware Corp. (Nasdaq: [ CPWR ]) will be exiting the S&P 500 index after the market close on December 30th, to be replaced by WPX Energy, a spin-off from Williams Companies (NYSE: [ WMB ]). The spin-off is expected to be completed on December 31st; while Williams itself will remain part of the index. In other news, Shutterfly (Nasdaq: [ SFLY ]) provided weak guidance for the current quarter.

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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Continuous analyst 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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