October 27, 2008
Zacks Analyst Blog Highlights: UAL Corp., Freeport-McMoRan Copper & Gold Inc., Cadence Design Systems, Inc., Tractor Supply Co. And C.R. Bard, Inc.
Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: UAL Corp. (Nasdaq: UAUA), Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), Cadence Design Systems, Inc. (Nasdaq: CDNS), Tractor Supply Co. (Nasdaq: TSCO) and C.R. Bard, Inc. (NYSE: BCR).
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UAL Stays in Holding Pattern
We are maintaining our Hold on UAL Corp. (Nasdaq: UAUA), the parent company for United Airlines, but raising our target price to $12.50. In the third quarter, UAL reported a $1.99 loss per share before nonrecurring items, down from EPS of $1.83 in the year-ago quarter, due to soaring fuel costs that rose $890 million, or 63%, year-over-year.
UAL has strengthened liquidity by increasing its cash position $1.7 billion through a series of transactions. We are raising our per share estimates to a loss of $9.75 from a loss of $12.00 for 2008 and to earnings of $0.50 from a loss of $5.00 for 2009, largely due to our expectation of lower fuel costs and additional add-on revenues. UAL pays no common dividend.
Freeport-McMoRan Copper & Gold (NYSE: FCX) reported third quarter EPS of $1.31, a 48% y-o-y decline, due to higher input costs at Grasberg, lower realized copper prices, and higher-than expected unit costs at its North American mines (Morenci and Safford).
Given our lowered 2009 copper price assumption, rising LME copper inventory levels, and the deteriorating global economic environment, we are cutting our FY09 EPS estimate to $4.34 and downgrading FCX shares from Buy to Hold.
Cadence Design in a Mess
Cadence Design Systems Inc. (Nasdaq: CDNS) appears to be in big trouble as the company's CEO resigned unexpectedly amid mounting financial problems and disappointing results.
Adding to the upheaval, the company delayed its Q308 earnings results, expected to be released on October 22nd, on improper accounting issues related to contract revenues signed during Q1. Cadence has been losing share to Synopsys and is struggling through a downturn in the semiconductor cycle. The company also withdrew its bid for Mentor Graphics, further dimming its growth prospects.
Tractor Supply Flat & Straight
Tractor Supply Company (Nasdaq: TSCO) reported better-than-expected results for the third quarter, but management only reiterated its sales and EPS guidance for full-year 2008.
Tractor Supply's unique retail concept, store expansion plans, expanded merchandise mix, and operating improvements continue to produce solid sales growth in a difficult environment. Even so, those positives are offset by difficult macro conditions and worsening consumer trends.
C.R. Bard Estimates Raised
C.R. Bard (NYSE: BCR) headquartered in Murray Hill, New Jersey, operates in vascular, urology, oncology, and surgical specialty markets. These end markets should remain insulated from the current economic turmoil. Many of the company's products are used in interventional medicine, life-saving surgical procedures.
The company reported strong third quarter EPS ahead of management's guidance by three cents. Strong growth in the Vascular and Oncology businesses, improved margins, and lower share count drove EPS growth for the quarter.
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