Friday, November 29, 2013

Walt Disney Bull Bear Case

Walt Disney  Bull Bear Case  
 The bull case for Disney stipulates that EPS will expand to $4.20 in FY14. Using a multiple of 18x, which is Disney’s historical five-year average high P/E multiple, the stock will be valued at $75. Assumptions for the bull case include Disney’s continued growth in emerging markets, rising box office sales, and benefits from Disney’s new partnerships in internet TV and online content. The bull case assumes that EPS in FY14 will shrink to $3.75.  Read More: DIS

Wal-Mart Bull Bear Case

Wal-Mart Bull Bear Case
 The bull case for an investment in Walmart stock is based on the effective execution of its expansion plans. The company is investing in Neighborhood Market stores, e-commerce and international expansion, which will help drive revenue growth in future. The company’s move from large Supercenters to smaller Neighborhood Markets will allow Walmart to improve its market share, and investments in the fast-growing international segment will help drive revenue growth.  Read More: WMT

Visa Bull Bear Case

Visa Bull Bear Case
 In our bullish case for Visa’s stock price, EPS will expand to $9.25. With a P/E multiple of 24, we expect the stock price to hit $231. This is rooted in the assumption that revenues will continue to grow, operating margins will expand leading to a positive traction in the Earnings per Share, while international markets will further gain a higher share of Visa’s revenues Read More: V

United Health Group Bull Bear Case

United Health Group Bull Bear Case

 In the bull case scenario for UnitedHealth Group Bidness Etc has a set a target price of $86 for the company. This is achieved using an EPS of $5.93 and a P/E multiple of 14.5x. The company’s Optum business has been growing well and has been showing double-digit growth. The company is participating in the health exchange program which gives it exposure to a market which has 30 million uninsured people. read More: UNH

United Technologies Bull Bear Case

United Technologies Bull Bear Case  
 Our bull case for an investment in United Technologies stock targets a price of $124, assuming a price to earnings multiple (P/E) of 20 and per share earnings of $6.2 on the back of growth in passenger traffic and demand for fuel-efficient airplanes. Huge order backlogs at aircraft manufacturing companies like Boeing will result in a steady stream of orders for UTC in the future. In addition Read More: UTX

Travelers Companies Bull Bear Case

Travelers Companies Bull Bear Case
 The bull scenario for travelers has the company at a price to book value of 1.5x and a book value per share of $73. This is based on growing automobile sales and the increase in new housing starts. Also the harsh weather conditions in the second half of the year are usually destructive for property and casualty insurers but 2013 hasn’t experienced any devastation which has been helpful for the company.  Read More: TRV

CocaCola Bull Bear Case

CocaCola Bull Bear Case

The bull case for Coca-Cola assumes that EPS will expand to $2.37 in fiscal year 2014, and using a P/E multiple of 21x will lead to a valuation of $52. The assumptions for the bull case stipulates that margins will improve as a result of the refranchising of the company’s bottling operations in the US, and further diversification Read More: KO

Procter and Gamble Bull Bear Case

Procter and Gamble Bull Bear Case
 A. G. Lafley’s plans to reallocate resources towards expansion and product innovation will help the company grow. Accelerated savings from $10 billion plan will also support EPS growth with annual $2 billion of pre-tax savings. Furthermore, emerging markets remain to be a growth driver for consumer staples companies.  Read More: PG

Pfizer Bull Bear Case

Pfizer Bull Bear Case  
 For Pfizer’s bull case our target price is at $41.40. This is with a P/E of 18x and an EPS of $2.3. With a long pipeline that that will offset the damage caused the patent cliff the company is well placed for a solid future. The oncology business is continuing to grow and global demand for cancer treatment is expected to grow 33% by2017.  Read More: PFE

Nike Bull Bear Case

Nike Bull Bear Case
 The high growth in emerging markets remain to be strong driver for Nike’s future growth. Brazil is one of the largest contributors to Nike’s revenues from emerging markets, and will be a key player in driving Nike’s future growth. Its growing economy and the fact that it is hosting major upcoming sporting events like the FIFA World Cup 2014 and Rio Olympics present a significant opportunity for Nike.  Read More: NKE

Microsoft Bull Bear Case

Microsoft Bull Bear Case
 Bull case for Microsoft assuming that Microsoft trades at Nasdaq 100 1 yr forward PE multiple of 18x with target price of $52.2 and EPS of $2.9. Bear case for Microsoft assumes it trades at a 5yr minimum PE multiple of 9.4x with a target price of 22.6 and EPS of $2.4. Read More: MCFT

Merck & Co Bull Bear Case

Merck & Co Bull Bear Case
 The bull scenario for Merck assumes a price to earnings multiple of 16.5 times and an earnings per share of $3.5. This gives it a target price of $57.75. The scenario is based on the assumption that pipeline products will help the company recover from the losses it suffered due to the patent expiry of its blockbuster drug, Singulair. Emerging markets will produce better results due to strategic investments made for product availability. Read More:  MRK

McDonald's Bull Bear Case

McDonald's Bull Bear Case

 In the bull case for McDonald’s stock, EPS is projected to rise to $6.25 in FY14, and using a P/E multiple of 17.6x, the stock will be valued at $110. The assumptions for the bull case are that overall margins will improve as result of the shift towards more franchised stores which have better margins.  read More : MCD

JPMorgan Chase Bull Bear Case

JPMorgan Chase
 In our bull case, the stock price of JPMorgan is $72.5, based on EPS of $6.54 and P/E multiple of 11.1 times, the same as that of the Financials Sector. Net interest margins will expand, meaning higher interest revenues for the company. Home prices will rise, increasing demand for home equity loans and mortgage loans, resulting in higher loan volumes for the company. Read More: JPM

Johnson & Johnson Bull Bear Case

Johnson & Johnson Bull Bear Case  

 After analyzing the company our Bull scenario puts a $120 price target on the stock. This price target was achieved using the S&P Pharmaceutical index P/E of 20.51x and an EPS of $5.86. Analysts believe that the acquisition of Synthes – a maker of medical devices - will help J&J continue its leadership in the orthopedic devices and implants market. Read More: JNJ

IBM Bull Bear Case

 IBM Bull Bear Case

Assuming an EPS of $18 the stock will trade at its five-year P/E of 13x and will have a share price of $234. This price is based on the expectation that as 2014 unfolds, IBM will be able to increase its revenues from growth markets coupled with its focus on cloud and analytics and the driving force will be to achieve $20 EPS by 2015.  Read More: IBM

Intel Bull Bear Case

Intel Bull Bear Case  

 Bull case for Intel assumes a PE multiple of 16x on 5 year average with EPS of $2 and a target price of $32. As for the the bear case for Intel assumes a PE multiple of 9.7x with EPS of $1.5 and target price of 14.6$. Read More: INTC

Home Depot Bull Bear Case

Home Depot Bull Bear Case  
 Home Depot’s margins will expand following the productivity improvement initiatives taken by the company. Furthermore, its plans to improve customer service through greater customer facing hours and that would help it increase its market share.  Read More: HD

Goldman Sachs Bull Bear Case

Goldman Sachs Bull Bear Case  

 Bull case for GS at target price of $241 assumes a PE multiple of 14.7x with an EPS of $16.4. Bear case for GS at $101 target price assumes a PE multiple of 8.8x with an EPS of $11.3. Read More: GS

General Electric Bull Bear Case

General Electric Bull Bear Case   

GE’s bull case assumes a price-to-earnings multiple of 17.5 times and an EPS of $1.15 for GE Industrial. Furthermore, GE’s Capital businesses are expected to be valued at price to tangible book value of two times. GE is expected to achieve this valuation, assuming that strong demand from China and Africa drives GE’s revenue higher.  Read More: GE

Thursday, November 28, 2013

Exxon Bull Bear Case

Exxon Bull Bear Case

 In the bull case, Exxon’s stock price can increase to $129, assuming Brent Crude and Henry Hub natural gas prices increase. Higher US Gulf Coast cracking and marketing margins, and a P/E multiple will also boost the stock price. In the bear case, the P/E multiple of the company falls, as do crude oil and natural gas prices. Read More: XOM

Dupont Bull Bear Case

Dupont Bull Bear Case

 DuPont’s bull case assumes a price-to-earnings multiple of 19 times, the high end of competitors, and an EPS of $3.90. To achieve the bull case Bidness Etc assumed that automobile sales will grow due to depreciation in the Japanese yen against the US dollar, titanium dioxide prices will increase, Pannar acquisition results in a profit in fourth quarter and demand for herbicides and insecticides increases from Latin America and the US. Read More: DD

Cisco Systems Bull Bear Case

Cisco Systems Bull Bear Case

 In the bull case, Cisco stock will trade at its five-year historical average P/E multiple of 15x, with a target price of $33, if it is able to maintain its leading market share in switches and routers with higher margins. Its Nexus line will be a major driver as it offers services for cloud, big data and data centers and is based on application-centric infrastructure. Read More : CSCO

Chevron Bull Bear Case

Chevron Bull Bear Case

 In the bull case, Chevron’s stock price is $164, which reflects an upside potential of 37% from its current price of $120. The price-to-earnings (P/E) multiple used is 10.2x, the company’s average multiple from March 2009 to April 2011, when Brent Crude prices soared from $42 per barrel to $126 per barrel. Higher crude oil and natural gas benchmark prices translate into higher revenues for the oil supermajor.  Read More: CVX

Caterpillar Bull Bear Case

Caterpillar Bull Bear Case  

 The bull case assumes an EPS of $7.15 for 2014 while trading at a P/E of 13x, a discount of almost 20% to the company’s historic five-year average. Continued growth in emerging markets and an eventual decline in inventory supplies are expected to create demand for CAT products. Read More: CAT

Boeing Bull Bear Case

Boeing Bull Bear Case
 The bull case calls for a P/E multiple of 20, based on the record order backlogs for Boeing’s narrow body planes. Current backlogs ensure manufacturing for the next seven years for narrow body planes, and over three years for wide body planes. More passenger traffic in emerging markets, especially in the Middle East and Asia Pacific, would result in continued growth of order backlogs, thereby positively influencing the share price Read More: BA

AT&T Bull Bear Case

AT&T

A bullish stance on AT&T’s share pricing calls for an EPS of $2.6, with stock trading at a multiple of 15. This valuation is based on the assumption that there will be growth in net subscriber count as the company enhances its networks and increases it network coverage in the domestic, as well as foreign markets.  Read More: AT&T

American Express Bull Bear Case

American Express Bull Bear Case

 In the bull case for American Express, EPS is projected to increase to $5.6 in FY14, based on the assumption that the stock will trade at a multiple of 16, giving a target price of $90. The assumptions for the bull case include expanding margins, growing travel commissions, and higher business activity leading to increased global payment volumes. Rad More: AXP

3M Bull Bear Case

3M Bull Bear Case
 The company is currently trading at a premium of 16% to the S&P 500 at 19.4x and a one-year forward P/E of 17.5x. Our bullish case takes into account increasing automobile manufacturing and higher chemical production in the US. Considering record corporate profits in the US, the company is expected to maintain its current P/E ttm of 20x for next year. On the other hand Read More: MMM

Goldman Sachs Upcoming Catalysts

Goldman Sachs
 Goldman Sachs is only closely competing with Morgan stanley in all of the business segments it operates in. In Global core FICC trading Goldman holds 9% of the market share while in global core equity trading market it holds 17% of the market share. In M&A advisory market Goldman has consistently held first position. Read More: GS

Walt Disney Earnings Review

Walt Disney

Disney reported solid earnings for the fourth quarter of fiscal 2013 (4QFY13), and beat analyst estimates for both revenues and earnings. Net income for the quarter came in at $1.39 billion, an 8% increase over 4QFY12. Total revenues were $11.6 billion, a 7% uptick from $10.8 billion in the same quarter last year, while quarterly earnings per share (EPS) were up 8% to reach $0.77. Operating margins remained flat during the quarter, but the real surprise was the flagging growth rate for the company’s cable and broadcast networks which were up only 1% and 2%, respectively. Read More: DIS

Wal-Mart Earnings Review

Wal Mart  
 Even though Walmart beat analysts’ estimates for earnings in the third quarter of fiscal year 2014 by over 1%, its stock price did not move significantly following the release of quarterly results. In its earnings announcement, the company also lowered its EPS guidance. Read More: WMT

Visa Earnings Review

Visa
 For the fourth quarter of fiscal year 2013, which ended September 30, Visa reported a net income of $1.2 billion, which is up 15% from the same quarter last year. Total revenues were up 9% to reach $2.97 billion, while total expenses increased 5%. Global payment volumes rose 10% in the fourth quarter, and the worldwide Read More: V

United Health Group Earnings Review

United Health Group

 UnitedHealth group recently announced its 3QFY13 earnings in which it reported revenues of $30.6 billion which were slightly short of analyst estimates of $30.9 billion. The most growth reported was in the Optum segments with each posting double-digit growth. The company generated $2.6 billion in earnings from operations and a net profit of $1.6 billion. Read More: UNH

United Technologies Earnings Review

United Technologies

 United Technologies announced its third quarter earnings on October 22, 2013. The company missed estimates for revenues, but beat earnings expectations. The company reported revenues of $15.5 billion, an improvement of 3% year-over-year (YoY). Its per-share earnings of $1.55 were 13% higher YoY. Read More: UTX

Travelers Companies Earnings Review

Travelers Companies 

 Travelers’ most recent earnings release was for 3Q2013. The company reported earnings per share of $2.3 which was a 4% increase year-over-year and it also beat consensus estimates by 14.5%. The return on equity of the company was 13.9% and the operating return on equity was 15.2%.The earnings beat is attributed to the continued improvement in underwriting margins.  Read More: TRV

CocaCola Earnings Review

CocaCola  
 For the three months ended September 28, 2013, Coca-Cola missed analyst expectations for revenue but its EPS was in line with consensus estimates. Net operating revenues for the quarter came in at $12.03 billion, down 2% from the same quarter in the prior year (3QFY12), while EPS was $0.54, down 8% from 3QFY12. Read More: KO

Procter and Gamble Earnings Review

Procter and Gamble
 P&G beat analysts’ estimates in 1QFY14, however, the stock price didn’t show any substantial change and remained stable over the following days. The company’s organic sales growth was consistent with the previous quarters along with its organic sales and EPS guidance. Read More: PG

Pfizer Earnings Review

Pfizer

   Pfizer’s revenues in 3Q13 were better than expectations. The company’s stock price rose 1.7% after the earnings release as the company beat expectations by 3.6%, reporting an EPS of $0.58 per share. This was also a 9.4% growth year-over-year. The company did face a decline in revenues year-over-year to $12.6 billion. Read More: PFE

Nike Earnings Review

Nike

 Nike’s stock price was up 6.1% following the beat to consensus estimates. The company’s exceptional performance can be attributed mainly to the growing success of its footwear brands. Its gross margins also expanded 1.20 percentage points over the comparable year-ago period due to lower raw material costs, higher average pricing Read More: NKE

Merck & Co Earnings Review

Merck   Co  
 The most recent earnings reported by Merck were for 3QFY13. The company’s performance did not live up to analysts’ estimates. The company reported a revenue miss and also an EPS miss. The problems identified for the choppy performance by Merck was the continuous decline of its ex-blockubuster drug Singulair and a decline in year-over-year growth in the animal health segment as well as the consumer care segment. Read More: MRK

McDonald's Earnings Review

McDonald s

 For the third quarter of fiscal year 2013, which ended on September 30, McDonald’s beat analysts’ expectations for EPS but fell short of estimates for revenues. Total revenues for the quarter came in at $7.32 billion, a 2% increase from the same quarter last year. Operating income rose 6% from 3QFY12 to reach $2.41 billion.  Read More: MCD

JPMorgan Chase Earnings Review

JPMorgan Chase
 JPMorgan reported a profit loss of $0.17 per share, whereas EPS from its core operations was $1.42. A large addition to the litigation reserves in the quarter was cited as the main reason which led to the loss. Core EPS performed better as the company lowered its provisions for credit losses after witnessing improving credit quality trends and cut down its compensation costs for the quarter.  Read More: JPM

Johnson & Johnson Earnings Review

Johnson   Johnson

 J&J’s 3QFY13 results were impressive with the company posting a 0.72% positive surprise in revenues. They also beat the earnings per share estimate, posting earnings of $1.36 per share compared to the expected $1.33, a 2.72% beat. On a year-over-year (YoY) basis the operating income for the quarter was 4.7% higher with a gross margin of 69.6%.  Read More: JNJ

IBM Earnings Review

IBM
IBM reported its third quarter earnings, missing revenue estimates but beating earnings estimates. IBM has missed out on revenue estimates for four out of the past five quarters but earnings have been above consensus estimates. This quarter, IBM’s hardware segment suffered the most, with revenues declining 16.6% YoY.  read More: IBM

Wednesday, November 27, 2013

Home Depot Earnings Review

Home Depot

Home depot's earnings review for 3QFY13 has successfully beaten estimates of EPS and revenues both. Following the strong results, company has released a raised guidance which analyst don't agree with fully. Read More: HD
Goldman Sachs  

 GS has been able to beat concesus EPS estimates for 3QFY13 of $2.47 by at least 40 cents. Though it has been able to beat bottom line expectations but its performance can be called subpar due to it below expectation revenues. GS has beaten bottom line expectations by significantly lowering its compensation expense which is why the performance has can not be called above par. Read More: GS

Intel Upcoming Catalysts

Intel

 A decline in the PC industry is expected to have a major impact on Intel. Intel has also halted its plans to move into the smartphone industry while its Intel Atom processor has been used in Samsung Galaxy S3. This will pave the way of entering into the tablet market. Read More: INTC

General Electric Earnings Review

General Electric

 On October 18, 2013, GE announced its 3Q13 results missing analyst expectations for revenues by 0.8%, but beating expectations for adjusted EPS by 3%. The EPS beat was due to the 40bps expansion in overall operating margins. GE reported revenues of $35.7 billion, down 1.5% year-over-year (YoY), and an EPS of 40 cents (excluding restructuring costs and one time charges), flat YoY.  Read More: GE

Exxon Earnings Review

Exxon

 Exxon was able to beat both revenue and earnings estimates in 3QFY13. The major problem that Exxon faced in the quarter was the decline in refining margins. This decline was even greater than sell-side expectations. However, higher petrochemical margins and production volumes more than offset the decline, so revenues beat expectations. Read More: XOM