(Source: Business Wire)
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: Wells Fargo & Co. (NYSE: WFC), The Goodyear Tire & Rubber Co. (NYSE: GT), Schering-Plough Corp. (NYSE: SGP), Votorantim Celulose e Papel S.A. (NYSE: VCP) and Aracruz Celulose S.A. (NYSE: ARA).
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Here are highlights from Thursday's Analyst Blog:
Wells Fargo Beats Consensus
Wells Fargo & Co. (NYSE: WFC) 3Q08 diluted earnings of $0.49 per share were substantially ahead of consensus.
The results were aided by double-digit growth in loans, deposits and earnings assets, but offset by write-downs related to its investments ($0.13 per share), additional credit reserves ($0.10 per share) and loan loss provisions. Based on strong 3Q08 results and ahead of the Wachovia merger, we believe that the company is relatively well-positioned compared to its peers, given a healthy balance sheet and strong capital position.
Goodyear Tire Along Bumpy Road
The Goodyear Tire & Rubber Co. (NYSE: GT) is one of the largest tire manufacturing companies worldwide. Goodyear Tire is benefiting from a major restructuring program along with lower raw material costs and improved selling prices.
However, the company is constantly cutting production on the back of lower demand. It has reduced tire production significantly in both North America and Europe. It further plans to close 92 underperforming retail stores. Apart from this, the company also has substantial unabsorbed overhead costs. These compel us to rate the shares a Hold with a target of $10.
Schering-Plough Forecast Trimmed
Schering-Plough Corp. (NYSE: SGP) focuses on prescription drugs, animal health, foot and sun care products. Recent prescription flight of cholesterol drugs Vytorin/Zetia prompted management to implement an aggressive cost-cutting initiative. We expect a significant decline in sales of both drugs and have trimmed our sales forecasts accordingly.
Schering-Plough has one of the strongest late-stage pipelines in the industry. Assuming Schering delivers on its productivity initiatives and the integration of Organon produces the incremental revenue and cost synergies management hopes for, we think EPS can grow at a CAGR of 10% through 2012. While we continue to be believers in the long-term future of the company, we see a significant amount of near-term risk and recommend that investors Hold at the current price.
