Zacks Bull and Bear of the Day Highlights: Apple, Vale S.A. – ADR, General Motors, Ford Motor and Toyota Motor
CHICAGO, May 29, 2012 /PRNewswire/ — Zacks Equity Research highlights Apple Inc. (Nasdaq:AAPL) as the Bull of the Day and Vale S.A. – ADR (NYSE:VALE) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on General Motors Company (NYSE:GM), Ford Motor Co. (NYSE:F) and Toyota Motor Corp. (NYSE:TM).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Apple Inc. (Nasdaq:AAPL) reported an outstanding second quarter, with its earnings per share comprehensively beating the Zacks Consensus Estimate by $2.27. We think management guidance was conservative as usual and believe Apple remains the biggest growth story based on its superior product pipeline, apps, iCloud, Apple TV, loyal customer base and international growth opportunities.
However, Apple’s ability to spur the popularity of its products in developing nations, where pricing is often an important consideration, will largely influence the company’s future growth. Also, stiff competition from Samsung, HTC and Google; saturation in its major markets and increasing legal complexities remain concerns.
We maintain our Outperform rating and set a price target of $685.00. This is based on 14.6X 2012 EPS; currently, AAPL shares are trading at 13.9x 2012 earnings.
We downgrade our recommendation on Vale S.A. – ADR (NYSE:VALE) from Neutral to Underperform. We are concerned about the current global instability and a slower-than-expected worldwide growth rate which has been constantly raising concern for miners, including Vale. On the operational side, resource nationalism, political uncertainty and natural disasters continue to impede efficiency.
In addition, rising energy prices, currency fluctuations and huge mining taxes may compress margins in the coming quarters. Vale recorded an EPADS of $0.74 in first quarter 2012, drastically down from $1.29 in the year-ago quarter.
Vale ADR has a trailing 12-month earnings multiple of 4.8x compared with 5.9x for the peer group and 13.7x for the S&P 500. We expect Vale ADR to trade at a P/E of 4.8x EPADR 2012, to arrive at the target price of $17.00.
Latest Posts on the Zacks Analyst Blog:
GM to Boost Headcount
General Motors Company (NYSE:GM) is reportedly enlarging its workforce in the Detroit-Hamtramck assembly plant by adding 200 new workers. The decision comes in the wake of rising demand prior to the beginning of the production of 2013 Chevrolet Malibu.
Currently, the assembly plant employs about 1,350 people. Around 1,200 employees work on hourly basis and the remaining 150 are General Motors’ salaried employees. The plant at present operates on a shift basis which entails working for ten hours per day and four days per week.
The Detroit-Hamtramck factory products include Chevrolet Volt, Opel Ampera and Chevrolet Malibu (to be launched in 2013). The plant will also build the new 2014 Chevrolet Impala. The company has invested $336 million for Chevrolet Volt and Opel Ampera, roughly $121 million for Chevrolet Malibu and $69 million for Chevrolet Impala.
Like General Motors, Chrysler is also providing job opportunities in Detroit. Its Jefferson North Assembly Plantmainly produces Jeep Grand Cherokee. The company, in order to increase the production, would add a third shift to the assembly.
Chrysler announced in December 2011 that it will reopen the Conner Avenue Assembly Plant in Detroit for the production of the next-generation SRT Viper. With this, the company will be providing job opportunities for 1,250 workers, both salaried and hourly workers.
Detroit, Michigan-based General Motors Company is a leading global automotive company. The company along with its strategic partners, produces, sells and services cars, trucks and parts under four core brands -Chevrolet, Buick, GMC and Cadillac. It also assembles passenger cars, crossover vehicles, light trucks, sport utility vehicles, vans and other vehicles. The company’s major competitors are Ford Motor Co. (NYSE:F) and Toyota Motor Corp. (NYSE:TM).
General Motors currently retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating. The company has growth opportunities from the emerging markets. Sales will also be boosted by the rising demand in the industry and diversified lineups.
However, high debt level and the Euro zone crisis have weighed on General Motors. Taking these factors into account, we currently have a long-term (more than 6 months) Neutral recommendation on the stock.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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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.
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