Zacks Bull and Bear of the Day Highlights: Royal Caribbean, Microchip
Technology, Visa, MasterCard and American Express
CHICAGO, Nov. 28, 2012
CHICAGO, Nov. 28, 2012 /PRNewswire/ --Zacks Equity Research highlights Royal
Caribbean (NYSE:RCL) as the Bull of the Day and Microchip Technology
(Nasdaq:MCHP) as the Bear of the Day. In addition, Zacks Equity Research
provides analysis on Visa Inc. (NYSE:V), MasterCard Inc. (NYSE:MA) and
American Express Co. (NYSE:AXP).
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:
Microchip Technology (Nasdaq:MCHP) is one of the fastest growing providers of
16-bit and 32-bit microcontrollers. Earnings estimates have gone down
significantly after the company reported its second quarter 2013 results,
which missed the Zacks Consensus Estimate for the second quarter in a row.
Sales continued to decline due to weak European markets and uncertain economic
environments in the U.S. and China. Margins were hit by increased acquisition
charges. The guidance provided by the company was also weak. The uncertain
economic environment, coupled with deceleration in worldwide GDP growth,
continues to hamper Microchip.
Therefore, a significant improvement in business is not in the cards for the
near term. Consequently, we have downgraded our recommendation on the company
to Underperform from Neutral.
Latest Posts on the Zacks Analyst Blog:
Visa Secures eCommerce
Visa Inc. (NYSE:V) announced the launch of a new service – Visa Consumer
Authentication Service – to mitigate the risk of fraud related to the
eCommerce transactions in Canada.
Accordingly, the new authentication service will dynamically support a secure
payment process through a new feature – Three Domain (3-D) Secure program.
This new 3-D feature will enhance the level of security Visa takes while the
consumer makes its payment and checks out of the terminal.
Presently, the new service does not require customers to go through the hassle
of entering passwords for verification. The 3-D feature automatically assesses
the authenticity of a particular transaction by the historical trend of the
consumer's expenditure. It also detects the device from which the transaction
is made and relays all information regarding it, thereby making the service
useful for mobile payments.
Authenticated payment services are a critical requirement at this moment since
the card industry solely operates on chip cards that hold all the customer
information. These cards interchange various hands, such as retailer, merchant
and acquirer, before reaching the ultimate source.
Visa has been consistently aiming to achieve high data security in order to
maintain a strict security protocol, thereby adding an easy and reliant
defense mechanism in to the payment system. This also ensures the long-term
growth opportunity for eCommerce. To deliver a higher level of card data
security to acquirers and merchants, the company unveiled an upgraded data
security service – Visa Merchant Data Secure – in August this year.
The company aims to retain its strength by exploring newer growth avenues,
besides expanding into emerging international markets to support growth.
Moreover, the regulatory challenges have diverted Visa's synergies to the
rapidly growing prepaid cards, money transfer services, eCommerce and mobile
banking in order to reach out even to the small businesses, thereby helping
them to increase profitability and cash flow by initiating controlled spending
with convenience. Hence, to meet these growth strategies, Visa needed a
critical data safety and control system in order.
Overall, Visa is making vigorous attempts to augment its core processing
capabilities and maintain its competitive position, primarily against its arch
rivals – MasterCard Inc. (NYSE:MA) and American Express Co. (NYSE:AXP) – in an
increasingly complex payments environment, primarily through the strategic
technology acquisitions and product innovations.
Visa currently retains a Zacks #2 Rank, which translates into a short-term Buy
rating, while the long-term recommendation remains Neutral.
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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