Financial, Nordstrom and Quinenco
CHICAGO--(BUSINESS WIRE)--Aug. 22, 2006
Zacks Equity Research highlights Conseco, Inc.
(NYSE:CNO) as the Bull of the Day and Frontier Financial (Nasdaq:FTBK)
as the Bear of the Day. In addition, Zacks Equity Research provides
analysis on Nordstrom (NYSE:JWN) and Quinenco (NYSE:LQ). Full analysis
of all four stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all four stocks:
Bull of the Day:
Our Bull of the Day recommendation is for Conseco, Inc.
(NYSE:CNO). Conseco continues to restructure and cut costs to improve
its credit ratings, a prerequisite for profitable growth in the long
term. We think after a couple of more quarters of stable operating
results, Conseco is likely to attain the critical A- AM Best rating
necessary to fuel substantial growth in its policy sales. In the
meantime, however, the company is facing deteriorating loss ratios in
its Bankers Life Medicare supplement and long-term care lines, which
have contributed to the recent slide in the stock price. Trading at
0.9x book value, we think the stock has a very favorable risk/reward
Bear of the Day:
Our Bear of the Day recommendation is for Frontier Financial
(Nasdaq:FTBK). We are downgrading FTBK to a Sell at this time. Our
estimates and price target are both increasing; we simply believe that
the share price has gotten ahead of fundamentals. FTBK now trades at a
15% premium to peers on an absolute P/E basis and a 26% premium on a
PEG basis. On a price-to-book basis, FTBK now trades 30% above peers
in absolute terms and 20% above if adjusted for ROE. On the other
hand, performance is strong, and excess capital is significant. The
shares clearly have momentum at present, and estimate revisions are
positive. We view the new $0.90 annual dividend as secure.
Nordstrom's (NYSE:JWN) second-quarter results beat our estimates,
thanks to better-than-expected comparable-store sales, which were up
5.7%. We increased our fiscal 2006 and 2007 EPS estimates to account
for the upside. We maintain our Hold rating on JWN shares, however,
because we think the company's positive factors (smart merchandising
efforts and operating improvements) are offset by negative factors,
including higher gas prices, limited growth potential, and competitive
retail environment. Our target price is $38.50, or approximately 16x
our fiscal 2006 EPS estimate.
We are keeping our BUY recommendation on Quinenco (NYSE:LQ). Our
economic outlook for Latin America - particularly in Chile and Brazil
- remains positive, and the company's first and second quarter 2006
results were better than expected. We are particularly impressed by
the strong performance of Quinenco's manufacturing segment, which we
believe will continue to outperform in future months. The Argentine
inflation rate and disappointing results for Quinenco's
telecommunication business remain a concern, but we do not change our
positive view on the company's short-term outlook. Our six-month
target price is $14.00.
Get the full analysis of all four stocks by going to
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