August 10, 2011

The Zacks Analyst Blog Highlights: Macy’s, J. C. Penney Company, Duke Energy Corporation, The AES Corporation and Ameren

CHICAGO, Aug. 10, 2011 /PRNewswire/ -- 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: Macy's, Inc. (NYSE: M), J. C. Penney Company Inc. (NYSE: JCP) Duke Energy Corporation (NYSE: DUK) The AES Corporation (NYSE: AES) and Ameren Corporation (NYSE: AEE).


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Here are highlights from Tuesday's Analyst Blog:

Earnings Preview: Macy's

Macy's, Inc. (NYSE: M), one of the leading department store retailers in the United States, is scheduled to report its second-quarter 2011 financial results before the bell on Wednesday, August 10, 2011. The current Zacks Consensus Estimate for the quarter is 47 cents a share. The Zacks Consensus estimates revenue at $5,881 million for the second quarter.

Second-Quarter 2011 Consensus

The analysts surveyed by Zacks, expect Macy's to post second-quarter 2011 earnings of 47 cents a share. The current Zacks Consensus Estimate compares with 35 cents a share earned in the year-ago quarter. The estimates in the current Zacks Consensus for the quarter range from a low of 39 cents to a high of 55 cents.

Zacks Agreement & Magnitude

Of the 13 analysts following the stock, only 1 analyst revised the estimate upwards in the last 30 days, having no material impact on the Zacks Consensus Estimate of 47 cents. In the last 7 days, none of the analysts changed their estimates keeping the Zacks Consensus Estimate constant.

Positive Earnings Surprise History

With respect to earnings surprises, Macy's has topped the Zacks Consensus Estimate over the last four quarters in the range of 5.3% to 166.7%. The average remained at positive 65.9%. This suggests that Macy's has beaten the Zacks Consensus Estimate by an average of 65.9% in the trailing four quarters.

Macy's in Neutral Lane

In an attempt to increase sales, profitability and cash flows, Macy's is taking steps such as integration of operations, consolidation of divisions, customer-centric localization initiatives, as well as developing e-commerce business and online order fulfillment centers. Moreover, Macy's continues to focus on price optimization, inventory management and merchandise planning to drive traffic.

However, Macy's customers remain sensitive to macroeconomic factors including interest rate hikes, increase in fuel and energy costs, credit availability, unemployment levels, and high household debt levels. All these may negatively impact their discretionary spending, and in turn the company's growth and profitability.

Macy's, which competes with J. C. Penney Company Inc. (NYSE: JCP), currently operates approximately 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.

Currently, we have a long-term 'Neutral' rating on the stock. However, Macy's holds a Zacks #2 Rank, which translates into a short-term 'Buy' rating.

Duke Energy Moves "Windward"

Duke Energy Corporation (NYSE: DUK) has announced plans to build a large-scale wind farm in Willacy County, Texas, and sell the electricity it generates to San Antonio-based municipal-owned utility, CPS Energy.

Duke Energy Renewables, a commercial business unit of Duke Energy, will build, own and operate the 200-megawatt (MW) Los Vientos I Windpower Project. The wind farm would be located at Willacy County, Texas, approximately 120 miles south of Corpus Christi and 20 miles inland from the Gulf of Mexico.

Duke Energy will sell all of the output from the wind farm and associated renewable energy credits to CPS Energy under the terms of a 25-year agreement. CPS Energy already buys all of the electricity generated at Duke Energy Renewables' 14-MW Blue Wing Solar Project in San Antonio. The Blue Wing solar farm, which consists of approximately 215,000 photovoltaic panels, becomes operational in November 2010.

In the fourth quarter of 2011 Duke Energy Renewables plans to start construction of the Los Vientos I Windpower Project. The wind farm is expected to become operational in December 2012.

Duke Energy Renewables owns nearly 1,000 MW of generating capacity at nine U.S. wind farms - four in Wyoming, three in Texas, one in Colorado and one in Pennsylvania.

Charlotte, North Carolina-based Duke Energy Corp. is a diversified energy company with a portfolio of domestic and international, natural gas and electric, regulated and unregulated businesses. Its regulated utility operations serve approximately 4 million customers in North Carolina, South Carolina, Indiana, Ohio and Kentucky, comprising a population of approximately 11 million.

Duke Energy's stable U.S. electricity and gas operations provide a relatively stable and growing earnings stream. Looking ahead, higher rates through recent settlement agreements in Kentucky, North Carolina and South Carolina will stand the company's long-term goal of 4%-6% earnings growth in good stead.

Duke Energy's Commercial Power and International Business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the U.S.

Duke Energy currently has a short term Zacks #3 Rank (Hold), which translates into a long-term Neutral recommendation for the stock. This is consistent with the ranks of its closest peers, The AES Corporation (NYSE: AES) and Ameren Corporation (NYSE: AEE).

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