CHICAGO, Jan. 25, 2011 /PRNewswire/ -- Zacks Equity
Research highlights: OmniVision Technologies (Nasdaq: OVTI)
as the Bull of the Day and BioScrip, Inc. (Nasdaq: BIOS) as
the Bear of the Day. In addition, Zacks Equity Research provides
analysis on McDonald Corporation (NYSE: MCD), Halliburton
Co. (NYSE: HAL) and Schlumberger Ltd. (NYSE: SLB).
(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:
OmniVision Technologies (Nasdaq: OVTI) is an OEM of CMOS
image sensors and support circuitry used within handsets, notebooks
and other mass markets. Second quarter earnings were much better
than the Zacks Consensus, and the flattish guidance for the next
quarter appears to be much better than normal seasonality.
The company has leveraged its superior technology to solidify
its position in the handset market and also expand into other
areas. We like its product roadmap, growth prospects and management
execution, and believe that it will be able to deal with the short
product life cycles, temporary slowdown in the computing market and
stay ahead of the stiff competition in its served markets.
We are therefore upgrading OVTI shares to Outperform, which
indicates that we expect the company to outperform the market in
the next three to six months. Our $34.00 target price (20.7 P/E), reflects this
view.
Bear of the Day:
BioScrip, Inc. (Nasdaq: BIOS) posted a disappointing
quarter based on higher costs and tax. Although revenues grew by
double-digits, driven by the CHS acquisition, the organic growth
was below expectation.
Several issues spanning from manufacturer related, product
recall and others impacted the company's margin during the quarter.
On top of these issues, the highly leveraged balance sheet
continues to be a drag on the bottom line. The company's interest
expense increased substantially during the quarter based on its
high debt level.
Amidst the backdrop of uncertainty, BioScrip has presently kept
its outlook on hold. Given these factors, we would prefer to avoid
the stock for the time being until further clarity is available
regarding its future prospects. Accordingly, we downgrade the stock
to Underperform.
Latest Posts on the Zacks Analyst Blog:
McDonald's Reports In Line
McDonald's Corporation (NYSE: MCD), the world's
largest hamburger chain, posted fourth quarter 2010 earnings of
$1.16 per share, in line with the
Zacks Consensus Estimate. Fourth quarter earnings increased 5% from
$1.11 per share reported in the
prior-year quarter. However, excluding the unfavorable currency
impact of 2 cents in the reported
quarter, earnings grew 6.0% year over year.
The earnings growth was driven by value offerings and premium
products along with a rise in comparable-store sales across all
regions. The company also benefited from its renovation strategy
and new menu offerings, which drove higher traffic in the reported
quarter.
The company's full-year earnings per share were $4.58 versus $4.11
in full fiscal 2009.
Outlook
The company expects the positive trend to continue in 2011, and
January global comparable sales to consequently increase in the
range of 4% to 5%.
Our Take
McDonald's continues to grow same-store sales while maintaining
healthy margins. We believe, over the next few quarters, revenues
will grow through unit expansion and strong comps momentum.
Based on a strong balance sheet and consistent earnings, the
stock provides relative safety and moderate growth prospects due to
its exposure to faster-growing international markets. Moreover, the
franchising strategy that is predominant in McDonald's business
model helps drive steady cash flow streams, solid margins and
returns.
However, stiff competition from other quick-service restaurant
operators and macroeconomic factors influencing consumer spending
patterns still remain areas of concern.
Consequently, we have a Zacks #3 Rank (short-term Hold
recommendation) on the shares. We also reiterate our long-term
Neutral rating.
Halliburton Posts Big Gain
Major oilfield services provider Halliburton Co. (NYSE:
HAL) reported better-than-anticipated fourth-quarter 2010 results.
This was helped by the strength and sustainability of the
all-important North American onshore activity levels (to which the
company is heavily exposed through its market-share-leading
pressure-pumping business).
Earnings per share, excluding special items, came in at
68 cents, beating the Zacks Consensus
Estimate of 63 cents and were
comfortably ahead of the year-ago adjusted profit of 28 cents.
Revenues of $5.2 billion were
40.0% greater than that achieved during the fourth quarter of 2009
and also surpassed the Zacks Consensus Estimate of $4.9 billion, as sales increased across the
company's business units.
During the quarter, North
America accounted for approximately 51% of Halliburton's
total revenues and 61% of its operating income.
Outlook
Halliburton management pointed out that fourth quarter
profitability was driven by strong demand for its services in
North America and improvement in
activity in a number of international markets including
Norway, West Africa, Iraq and Algeria.
The world's second-largest oilfield services company after
Schlumberger Ltd. (NYSE: SLB) believes that bullish
near-term U.S. land drilling trends, where activity is being driven
by horizontal drilling and liquids-rich plays, were able to make up
for the decrease in activity in the Gulf
of Mexico.
Going forward, Halliburton anticipates benefiting from pricing
improvements in select North American basins, as operators continue
to make the exploitation of unconventional resources the focus of
their investment. At the same time, the company expects
international activity to continue increasing.
Even though Halliburton has a Zacks #2 Rank (short-term Buy
rating) in the short run, we are Neutral on the shares in the
longer term.
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.
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