Stocks & Investing
Stocks and Investing
Stocks and Investing
Fri, July 30, 2010
Thu, July 29, 2010 CSX Corporation, FTI Consulting, Boeing, Textron and United Technologies
CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights: CSX Corporation (NYSE: [ CSX ]) as the Bull of the Day and FTI Consulting (NYSE: [ FCN ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Boeing (NYSE: [ BA ]), Textron (NYSE: [ TXT ]) and United Technologies (NYSE: [ UTX ]).
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 ]:
We are upgrading our recommendation on CSX Corporation (NYSE: [ CSX ]) to Outperform from Neutral based on the solid second-quarter results and an improving outlook along with overall volume gains in various commodity businesses. The company's second-quarter results surpassed the Zacks Consensus Estimate on higher volumes.
Strong cost-control measures will likely to support margin expansion on volume improvement driven by the ongoing economic recovery. Intermodal is expected to be the company's fastest-growing segment with its new service offerings.
The company's strong and cash-rich balance sheet along with the shareholders' return makes it attractive for long-term investment. This is consistent with our Outperform recommendation on the stock. Our target price of $64 is based on 16.5x our earnings estimate for 2011.
[ Bear of the Day ]:
We are downgrading our recommendation on FTI Consulting (NYSE: [ FCN ]) to Underperform from Neutral as the company trimmed its fiscal year 2010 outlook. The revised outlook is due to dramatic deceleration expected in Corporate Finance and Restructuring, less-than expected recovery in Merger and Acquisition activity and the struggling Technology segment.
Additionally, progress in its other segments such as Economic Consulting, Strategic Communications and Forensic and Litigation Consulting businesses are slower than expected. Further, the near-term outlook remains cautious as demand environment for practices remains uncertain and seizing up of business in Europe.
Our six-month target price of $31.00 per share equates to about 12.0X our earnings estimate for 2010, implying a negative total return of about 7.8% over that period.
Latest Posts on the Zacks [ Analyst Blog ]:
Durable Goods Disappoint
Except for one little detail, the consensus of economists were right on target with their expectations for New Orders for Durable Goods, both in total and excluding the extremely volatile transportation equipment segment. That one little detail was a minus sign.
In total, new orders were expected to rise by 1.0%, but instead they fell by 1.0%.Excluding transportation equipment, orders fell by 0.6% instead of the expected 0.6% rise.Adding to the disappointment of the report were the revisions to the May data. The total number last month was originally reported as a decline of 0.6% but now it looks like orders fell by 0.8% in May. Stripping out transportation equipment, the first estimate was an increase of 1.6% in May, now it looks like orders were up just 1.2%.
The reason that it is important to look at orders ex-transportation is that transportation equipment includes Boeing (NYSE: [ BA ]) jetliners, which are extremely big-ticket items, and the orders for them are very lumpy.The non-defense aircraft segment posted a 25.6% decline in June on top of a 30.2% decline in May. That, however, was after a 215.7% increase in April.
Based on announcements following some of the important air shows, it is very likely that there will be a very big increase in non-defense aircraft orders in July.On a year-to-date basis, orders for non-defense aircraft are 133.8% higher this year than last year. In addition to the big Boeing 767s, that category also includes business jets made by firms like Textron (NYSE: [ TXT ]) and helicopters made by United Technologies (NYSE: [ UTX ]).
Still, any way you cut it this was a disappointing report, and shows a very distinct slowing from earlier in the year.On a year-to-date basis, orders are up 16.5% in total and up 15.3% excluding transportation equipment, but then again, last year was a pretty dismal one for big-ticket durable goods.They dona™t tend to do well in a deep and nasty recession. That is a big part of what makes a recession a recession.
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.
About the Analyst Blog
Updated throughout every trading day, the [ Analyst Blog ] provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
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