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CHICAGO, April 16, 2012 /PRNewswire/ – Zacks Equity Research highlights: Invesco, Ltd. (NYSE: IVZ) as the Bull of the Day and Philips Electronics N.V. (NYSE: PHG) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Hewlett-Packard (NYSE: HPQ), Dell Inc (Nasdaq: DELL) and Apple Inc (Nasdaq: AAPL).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

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 Invesco, Ltd. (NYSE: IVZ) to Outperform based on its sustained earnings and healthy asset under management. The company’s fourth quarter 2011 earnings inched past the Zacks Consensus Estimate. Results were aided by enhanced interest and dividend income as well as lower interest expense.

An uptrend in the global equity markets helped in improving the long-term investment performance of the company, which is further expected to uplift the company’s operating results. Moreover, the operating leverage is expected to improve significantly over the long term due to its cost-control initiatives.

Invesco is well-positioned to benefit from improved global investment flows, resulting from its broad diversification. Our six-month target price of $28.00 per share equates to about 14.5x our earnings estimate for 2012. Combined with the annual dividend of $0.49 per share, this target price implies an expected total return of 13.8% over that period.

Bear of the Day:

We are downgrading our Neutral recommendation on Philips Electronics N.V. (NYSE: PHG) to Underperform with a $16 target price. The company had a very modest fourth quarter with revenues marginally up by 3.3%, primarily driven by moderate growth across its segments. The company posted a net loss of $160 million due to a higher loss from the company s discontinued television business.

The net cash flow also declined compared to the prior year, attributable to higher working capital outflow related to higher vendor payments. The stock is currently trading at a premium to the peer group, based on 2011 forward earnings estimates.

Our long-term Underperform recommendation on the stock indicates that it will perform below the broader U.S. equity market over the next six to twelve months. Our target price is $16.00 or 18.8X 2012 EPS — well within the historical range — supports our downgrade.

Latest Posts on the Zacks Analyst Blog:

Upbeat PC Shipment Numbers for Q1

Market research firms IDC and Gartner recently came out with encouraging personal computer (PC) shipment numbers for the first quarter of 2012. As per the recent disclosure, worldwide personal computer shipments increased more than IDC’s expectation during the first quarter.

However, the research firm believes that although the PC shipments surged during the quarter, the challenges facing the PC industry remain intact.

In a recent statement, Gartner Inc. noted that around 89.0 million PCs were shipped during the first quarter of the year, an increase of 1.9% from the prior-year period and was also higher than the research firm’s expectation of 1.2%.

IDC witnessed that PC shipments were up 2.3% for the quarter, although the firm expected a 0.9% decline.  However, this estimate beat does not indicate the revival of the PC industry.

On the contrary, industry experts are of the opinion that PCs have taken a backseat amid the growing popularity of tablet devices like iPad in the U.S. and other developed nations. Gartner also found that the demand for PCs was trending down in important markets, such as China and India.

This is a sort of a warning bell for the PC industry, which shows that PC makers cannot rely heavily on growth in these regions. The analysts are also of the opinion that PC vendors typically witness a dip in sales during the first quarter, which comes just after the holiday season. On the other hand, Gartner’s results reveal that shipments were in fact impacted by growing consumer demand for smaller, sleeker devices.

As per Gartner, technology major Hewlett-Packard (NYSE: HPQ) was the top PC vendor, with 15.31 million units shipped during the quarter. Shipments improved 3.5% year over year to 17.2%. Lenovo was placed in the second position with 13.1% market share, up 28.0% year over year.

Third-placed Dell Inc‘s (Nasdaq: DELL) market share dropped slightly from 11.4% to 11.0%, on the back of a 1.6% year-over-year decline in volume. Acer, which grabbed the fourth spot, witnessed a 9.2% drop in volume, that pulled down the market share to 10.9% from 12.2% a year-ago. This apart, Asustek Computer saw a 21% rise in volume. Also, the company’s market share rose to 6.0% from 5.1% a year earlier.

Apple Inc’s (Nasdaq: AAPL) market share climbed from 9.8% to 10.6%, on a 3.8% increase in volume.

In terms of geographical shipments, PC shipments declined 3.5% in the U.S., which is better than the 6.1% decline anticipated. Moreover, shipments to Asia spiked 2.0%, weighed down by weak demand in India and China.

On the other hand, shipments to Latin American declined 3.2%. This apart, shipments to Japan rose 11.5% and those to the larger Europe and Middle East region increased 6.7%. So, mixed numbers from different geographical regions reveal the fact that the replacement of PCs with other mobile devices has yet to catch up across geographies.

Although the industry witnessed a shortage of hard drives, it was not a hindrance for the larger players.

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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Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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By Chuck Mikolajczak and Caroline Valetkevitch

NEW YORK |
Sun Apr 15, 2012 11:08am EDT

NEW YORK (Reuters) – After suffering their worst two weeks of the year, stocks will look to quarterly earnings to determine whether the recent pullback has been exhausted or more losses are justified.

Alcoa Inc (AA.N) opened the earnings season with a bang, reporting a first-quarter profit on Tuesday instead of the expected loss. That positive surprise foretold a trend. Of the 32 companies in the SP 500 that have reported earnings so far, Thomson Reuters data showed that 75 percent – or two dozen – have beaten Wall Street’s expectations.

This week will start one of the busiest weeks of the quarterly earnings reporting period. About 86 companies in the Standard Poor’s 500 are expected to post results, according to Thomson Reuters Director’s Report.

At Friday’s close, both the Dow Jones industrial average .DJI and the SP 500 .SPX suffered their worst two-week percentage drops since late November. The Dow and the SP each fell 2.7 percent for the two weeks from the close on March 30.

“It seems like everybody’s been waiting for this so-called correction to potentially get back into the stock market,” said Kei Sasaki, managing director of listed equities at PineBridge Investments in New York, which has $67 billion in assets under management.

Wall Street typically defines a correction as a drop of 10 percent from a recent peak. The SP 500 is down 3.4 percent from April 2 when it closed at its highest level since mid-May 2008.

“The correlations on a moving average have also stayed relatively subdued, which tells us that investors are still looking at the market in a fundamental way that they haven’t for the past year,” Sasaki added. “So if earnings come in positive for the first quarter, we think they will get rewarded for it.”

Among the marquee names on this week’s earnings calendar are 10 Dow components: Intel Corp (INTC.O), Johnson Johnson (JNJ.N), Coca-Cola Co (KO.N), DuPont (DD.N), Microsoft (MSFT.O), The Travelers Companies Inc (TRV.N), Verizon Communications Inc (VZ.N), American Express Co (AXP.N), General Electric Co (GE.N), and McDonald’s Corp (MCD.N).

Financials will also be eyed this week on the heels of Friday’s results from JPMorgan Chase Co (JPM.N) and Wells Fargo Co.(WFC.N) Both big banks’ earnings exceeded forecasts. In the coming week, earnings are expected from the likes of Citigroup Inc (C.N), Goldman Sachs (GS.N) and Morgan Stanley (MS.N).

RIDING THE EURO-ZONE ROLLER COASTER

But even with earnings attracting investors’ attention, equities remain vulnerable to flare-ups in the euro zone as the bloc continues to grapple with its debt crisis.

“Earnings are beating expectations. Outlooks still look pretty optimistic,” said Jack Ablin, chief investment officer of Harris Private Bank in Chicago.

“Overall pretty good news, but it takes one lousy headline out of Europe to trump the whole thing.”

Equities snapped a two-day advance on Friday, pulled lower as the rising cost of insuring Spanish debt against default increased concerns about Europe’s financial health.

Last week, the benchmark SP 500 had gained for two consecutive days after a drop of more than 4 percent in the previous five sessions. That opened the possibility that equities had seen the pullback many analysts were expecting after the SP 500 climbed 12 percent in the first quarter.

The SP 500 remained near its 50-day moving average, a key technical level that could help indicate the next direction for stocks.

“Technically, we were due for a correction, we started that correction, and the market will always come up with reasons and find excuses that fundamentally will trigger what should happen technically – and it’s happened almost perfectly,” said Paul Mendelsohn, chief investment strategist of Windham Financial Services in Charlotte, Vermont.

“How far backwards we are going to fall remains to be seen – we’ve got support at that 1,358 area, and we are playing around the 50-day moving average area.”

The SP 500 closed on Friday at 1,370.26. For the day, it was off 1.3 percent. For the week, it was off 2 percent.

Despite the recent declines, the SP 500 is still up 9 percent for the year.

CHECKING THE ECONOMY’S VITAL SIGNS

The data will also get plenty of scrutiny this week for signals on the U.S. economy’s health after a weaker-than-expected jobs report cast doubt on the recovery’s strength.

Economic indicators due this week include the Empire State and Philadelphia Federal Reserve’s manufacturing surveys, retail sales for March, housing starts and existing home sales.

“It will be interesting to see if this is the beginning of a soft patch, if this unemployment number is a harbinger of more,” said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

The March nonfarm payrolls report, which was released on Good Friday when the cash U.S. stock market was closed, showed just 120,000 jobs added last month. That figure fell far short of the forecast for 203,000 new jobs and raised questions about whether the recovery in the U.S. labor market was stalling.

Sasaki of PineBridge Investments pointed out that “employment’s been under everybody’s watch” since Good Friday. “We still continue to see improvement. We believe it was a hiccup but in aggregate, we think the economic recovery is still continuing to improve.”

But even if earnings are solid and data shows improvement, markets could be susceptible to further losses if more signs of fiscal distress in the euro zone emerge.

“You have to put Europe, Spain and Italy, on any ‘watch list’ at this point. That may even be more important than earnings,” Massocca said.

“It’s not really a liquidity issue. It’s a solvency issue, and there are a lot of political whirlwinds around that, and there are a lot of concerns that the political will to actually do something is not going to be. We shall see.”

(Wall St Week Ahead runs every Sunday. Questions or comments on this column can be emailed to: charles.mikolajczak(at)thomsonreuters.com)

(Reporting By Chuck Mikolajczak and; Caroline Valetkevitch; Editing by Jan Paschal)

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