Zacks Bull and Bear of the Day Highlights: AAR, Deckers Outdoor, Noble Energy,
Atwood Oceanics and Apache
CHICAGO, Oct. 1, 2012
CHICAGO, Oct. 1, 2012 /PRNewswire/ -- Zacks Equity Research highlights AAR
Corporation (NYSE:AIR) as the Bull of the Day and Deckers Outdoor Corp.
(Nasdaq:DECK) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis on Noble Energy Inc. (NYSE:NBL), Atwood Oceanics Inc.
(NYSE:ATW) and Apache Corporation (NYSE:APA).
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
AAR Corporation (NYSE:AIR) reported a solid fiscal first quarter 2013 results
with earnings per share of $0.45 surpassing the year-ago earnings by 10% and
in line with the high-end of management's guidance range. Revenue jumped 13%
on the back of strong commercial aviation services business.
Based on strong sales growth, operational efficiency, enhanced product
availability and increased management's FY13 earnings guidance, we upgrade our
recommendation on AAR Corp. from Neutral to Outperform. We believe that the
company has a competitive advantage over its peers based on its market
expertise and technical/financial capabilities.
The company's strategic contract wins hold future potential. Our $19.00 target
price, 10.8x 2013 EPS, reflects this view.
Bear of the Day:
Deckers Outdoor Corp. (Nasdaq:DECK) posted a second-quarter 2012 loss of $0.53
per share. This fared better than the Zacks Consensus Estimate of loss of
$0.59, but widened from a loss of $0.19 delivered in the year-ago quarter due
to sluggishness in the European market. International sales during the quarter
dropped 14.7%. UGG brand net sales fell marginally by 0.3%, whereas Teva brand
net sales tumbled 15.4%.
Despite 14% growth expected in the top line, management projects fiscal 2012
earnings to decline between 9% and 10%, and anticipates 1% growth in total
revenue and a 31% decline in earnings per share for the third quarter. Deckers
also forecasts a gross profit margin contraction of 250 basis points due to
increase in costs of goods sold and higher closeout sales level for fiscal
Further, over-reliance on the UGG brand, intense competition and sluggish
economic recovery still remain matters of concern. Consequently, we downgraded
our recommendation on Deckers to Underperform.
Latest Posts on the Zacks Analyst Blog:
Noble, Atwood Join for New Rig
Independent energy company, Noble Energy Inc. (NYSE:NBL) inked a three-year
agreement with a subsidiary of Texas-based drilling contracting company,
Atwood Oceanics Inc. (NYSE:ATW) for the construction of a new build drillship
to enhance its major deepwater exploration and development activities.
The drillship, Atwood Advantage, has the capability to reach at greater
depths. The first exploration prospect to be drilled is at the Eastern
Mediterranean play. Currently the drillship is under construction by South
Korea-based Daewoo Shipbuilding & Marine Engineering Corporation, Limited. The
product is expected to be received in the fourth quarter of 2013.
The presence of dual BOP systems, 40,000 feet drill depth ratings, improved
offline capabilities and increased mobility will certainly boost Noble
Energy's worldwide exploration projects. The implementation of BOP systems
would enable the company to save on its increasing spread costs which will
spur margins in the near term.
The contract signifies Noble Energy's hardened focus on the growth of its
overseas offshore exploration programs. We believe the company's new strategy
of optimizing its global oil and natural gas assets will generate favorable
Moreover, the steady rise in crude oil and slowly recovering natural gas
prices in the international market will propel the revenue performance of the
company. Also, Noble Energy's series of non-core asset sale of over $1.1
billion during the second quarter 2012 will stimulate the pace of the
company's core deepwater exploration projects. This will lead to smooth and
timely execution of the programs.
Noble Energy's Galapagos prospect in the Gulf of Mexico has made tremendous
progress with all the three wells producing at levels higher than originally
projected. The company's net production of 13,000 barrels of oil per day and 8
million cubic feet of natural gas per day outstripped earlier projection by
about 30%. However, unexpected rig accidents in the deepwater operations and
unplanned outages are risks that Noble Energy needs to watch out for.
Noble Energy expects its sales volumes to improve due to higher contribution
from Galapagos, continuation of the drilling programs in DJ Basin and
Marcellus Shale, and increased sales in Israel. For 2012, sales volume is
expected to be in the range of 236 thousand barrels of oil equivalent per day
(Mboe/d) to 244 Mboe/d.
Currently, the Zacks Consensus Estimates for the third quarter and full year
2012 for Texas-based Noble Energy are pegged at $1.05 per share and $4.91 per
One of the company's closest peers, Apache Corporation (NYSE:APA), recently
announced its decision to divest a 20% stake in Kitimat liquefied natural gas
("LNG") export project for $15 billion.
Get the full analysis of all these stocks by going to
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