Zacks Equity Research (Chicago, IL) highlights W.W. Grainger, Inc. (GWW) as the Bull of the Day and Altera Corp. as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Vale S.A., BHP Billiton Ltd and Rio Tinto plc at their website.
Bull of the Day:
W.W. Grainger, Inc. (GWW) reported fourth-quarter EPS and revenues of $2.13 and $2.08 billion, respectively, both outperforming Zacks Consensus Estimates. For 2011, adjusted EPS was $9.04 and revenues were a record $8.08 billion.
Grainger's market share strategy is driven by increased product offerings. In addition, the company's expansion of private label products, sales force investment and its focus on e-commerce remain successful. A sound balance sheet coupled with cash flow enable Grainger to further invest in growth opportunities, increase dividends and reinvest capital through share repurchases.
We have maintained our Outperform recommendation, which indicates that it will perform better than the market. Our $231.00 target price, 22.0x our 2012 EPS estimate, reflects this view.
Bear of the Day:
Earnings estimates for Altera Corp. (ALTR) have declined significantly after a weak guidance for the first quarter of 2012. The company expects sales to decline 5%-9% sequentially. As per management, the program timing in the Military section will account for half of the decline.
The company expects revenues from the wireless segment to move lower across multiple geographies due to continued inventory depletion and softening of demand in the second half of 2011. Altera has a large exposure to the telecommunications industry, in particular China.
The recent slowdown in China has adversely impacted the company's business. Therefore, we have downgraded our recommendation to Underperform from Neutral.
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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