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CHICAGO--(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: McDonald’s Corp. (NYSE: MCD), King
Pharmaceuticals, Inc. (NYSE: KG), Alpharma Inc. (NYSE: ALO),
Entergy Corp. (NYSE: ETR) and Mack-Cali Realty Corp. (NYSE: CLI).
Get the most recent insight from Zacks Equity Research with the free Profit
from the Pros newsletter: http://at.zacks.com/?id=4579
Here are highlights from Thursday’s Analyst
Blog:
Mickey D’s a Buy Amid Turbulence
McDonald’s Corp.’s
(NYSE: MCD) focus on core brands, its image make-over program, and innovative
marketing campaigns have been successful. After doubling margins in its U.S.
operations, the company is turning its focus to Europe and APMEA (Asia/Pacific,
Middle East and Africa), where company-operated restaurant margins lag the U.S.
(by 110-350 basis points in the second quarter).
Re-franchising continues to be another engine of growth, bolstering return on
assets by an expected 100 basis points on a less capital-intensive business and
a steady growth in royalties. Finally, we think additional margin and return on
equity expansion is possible as the company leverages its general and
administrative expenses through cost control initiatives and uses the cash
generated from operations to retire debt, distribute dividends, and pursue share
repurchases.
King a Hold, Pre-Alpharma Deal
We had a Sell rating on King Pharmaceuticals, Inc. (NYSE: KG) for a
significant period of time based on concerns regarding top-and bottom-line
growth prospects. Thanks to increased competition, generic threats, and
declining prescription trends for key products, the shares declined almost 45%
during this period.
King is now looking to acquire Alpharma (NYSE: ALO); this acquisition
would help King expand its presence in the pain management market and could help
it achieve significant cost synergies. Although ALO has rejected the offer, King
intends to enter into further negotiations with ALO and still hopes to close the
deal by year-end.
Entergy Corp. Going Nuclear
Entergy Corp. (NYSE: ETR) is shifting towards becoming a fundamentally
strong electric energy utility with the separation of its nuclear business. Its
core business shows strong earnings growth and cash flow generation by higher
production with fewer outage days and higher power prices.
Favorable regulatory rate hikes, higher contract and market energy pricing,
increased generation from the Palisades nuclear plant acquisition, a reasonable
valuation and steady recovery from the hurricane damage of September 2007 will
continue to deliver strong earnings and cash flow growth.
Mack-Cali a Sell on Macro-Factors
Mack-Cali Realty (NYSE: CLI) is a fully integrated, self-administered,
and self-managed office real estate investment trust (REIT). The company
reported 2Q FFO [funds from operations] of $0.93 per share compared to $0.88 per share in 2Q07.
Results were $0.06 above our estimates and consensus.
The surprise was due to lower overall expenses. Despite a weakening economy,
operations held up relatively well; the company reported rental rate increases
on new leases and portfolio occupancy held steady. In addition, CLI has limited
near term lease expirations. However, we are maintaining our Sell recommendation
due to macroeconomic factors.
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