Zacks Bull and Bear of the Day Highlights: Royal Caribbean, Western Union,
Texas Instruments, Amazon and Qualcomm
CHICAGO, Nov. 20, 2012
CHICAGO, Nov. 20, 2012 /PRNewswire/ --Zacks Equity Research highlights Royal
Caribbean (NYSE:RCL) as the Bull of the Day and The Western Union Co.
(NYSE:WU) as the Bear of the Day. In addition, Zacks Equity Research provides
analysis on Texas Instruments (Nasdaq:TXN), Amazon (Nasdaq:AMZN) and Qualcomm
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
Royal Caribbean (NYSE:RCL) is recovering at a steady pace from its close
competitor Carnival's ship grounding in January this year and consequent dip
in passenger confidence. Although the economic turmoil in Europe continues to
nag the company, the extreme upheaval seems to have dispersed. The company's
increased earnings guidance and third-quarter top- and bottom-line consensus
beat are indicative of this fact.
The company also experienced a slight increase in on-board revenue in the
third quarter and its cost containment efforts are also paying off. Relatively
stabilized booking patterns, cost containment efforts, fuel conservation
initiatives, increasing exposure to countries like China in order to tap the
developing cruise travel market and the slowdown in industry capacity are
positives for the shares.
Hence, we upgrade the recommendation from Neutral to Outperform. Our six-month
target price of $40.00 per share equates to about 20.4x our estimate for 2012.
The target price implies an expected return of 19.3% over that period.
Bear of the Day:
We are downgrading our recommendation on The Western Union Co. (NYSE:WU) to
Underperform from Neutral following its third quarter earnings release, in
which the company trimmed its full-year 2012 earnings expectations. The
company slashed its earnings guidance to a range of $1.60-$1.63 per share from
a previous estimate of $1.68-$1.72 per share.
Moreover, stiff competition and a weak global economy is taking a toll on its
performance. Western Union is facing compliance-related issues, particularly
those linked to its Southwest Border agreement. It has also recently witnessed
challenges in its core retail money transfer business in certain key markets.
The company is also facing strong competition from electronic channels of
money transfer. On the other hand, Western Union is also facing management
issues. Given a host of headwinds, we expect the stock to remain under
pressure in the near term.
Latest Posts on the Zacks Analyst Blog:
Texas Instruments Cuts 1700 Jobs
TexasInstruments (Nasdaq:TXN), or "TI," plans to cut 1,700 jobs worldwide in
order to reduce operational costs. This layoff is an attempt by the company to
optimize its cost structure and concentrate on its wireless business for
Along with other unspecified operational changes, the company will incur total
charges of approximately $325 million in the fourth quarter. These layoffs are
expected to generate total annualized cost savings of around $450 million by
the end of 2013.
Management is looking to restructure its businesses by focusing on its OMAP
processors and wireless connectivity on embedded solutions like automobiles,
industrial and other non-consumer markets, which have a long life cycle.
Though the company has made chips for devices such as Motorola Droid and
Amazon's (Nasdaq:AMZN) Kindle Fire tablet, Qualcomm (Nasdaq:QCOM) and Samsung
are far ahead in the race. The increasing competition from players such as
these, as well as in-house development efforts of large customers has led TI
to turn its focus away from the segment.
To continue its strong global growth momentum and increase its market share,
TI needs to refine its cost structure. We believe the restructuring action
will bring in stability and steady earnings growth in the near future. The
longer-cycle businesses will also lend stability to its revenues and the more
favorable competitive climate could help it generate stronger margins
Texas Instruments is one of the largest suppliers of analog and digital signal
processing (DSP) integrated circuits. The company's compelling product
line-up, increasing differentiation in its business, restructuring activities
and lower-cost 300mm capacity should drive earnings in the longer term.
The restructuring announcement came a few days after TI reported decent
third-quarter 2012 earnings. The company's earnings were up 27.2% sequentially
and exceeded the Zacks Consensus Estimate by 17 cents or 37.8%.
Currently, Texas Instruments has a Zacks #3 Rank, which translates into a
short-term Hold rating.
Get the full analysis of all these stocks by going to
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
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