Zacks Bull and Bear of the Day Highlights: Alliant Techsystems, Iron Mountain, Gap, American Eagle Outfitters and TJX

Zacks Bull and Bear of the Day Highlights: Alliant Techsystems, Iron Mountain,
                    Gap, American Eagle Outfitters and TJX

PR Newswire

CHICAGO, Jan. 2, 2013

CHICAGO, Jan. 2, 2013 /PRNewswire/ --Zacks Equity Research highlights Alliant
Techsystems (NYSE:ATK) as the Bull of the Day and Iron Mountain (NYSE:IRM) as
the Bear of the Day. In addition, Zacks Equity Research provides analysis on
Gap Inc. (NYSE:GPS), American Eagle Outfitters Inc. (NYSE:AEO) and The TJX
Companies Inc. (NYSE:TJX).


Full analysis of all these stocks is available at

Here is a synopsis of all five stocks:

Bull of the Day:

Alliant Techsystems (NYSE:ATK) reported favorable top- and bottom-line results
in the second quarter of fiscal 2013 with both lines beating the Zacks
Consensus Estimate. The solid performance stemmed from higher booking orders
and high-profile defense and aerospace contract wins.

We anticipate Alliant to capitalize significantly on defense and aerospace
deals gained during the quarter. Furthermore, the company's dividend hike of
30% would add value to its investors and win their confidence over the long
term. We believe Alliant's recently incorporated business segment realignment
strategy will enable the company to improve its operational efficiency while
benefiting margins.

However, the imminent threat of defense budget cuts could constrict growth
opportunities of the company. We reaffirm our Outperform recommendation on the

Bear of the Day:

Iron Mountain (NYSE:IRM) reported a dismal third quarter negatively impacted
by lower-than-expected organic growth in the core services coupled with
contraction in activity-based service revenue and decline in recycled paper
prices. The company provided a tepid outlook.

Although the company's decision to convert into an REIT would definitely
increase shareholders value and reduce the tax burden, we continue to believe
that the results will be negatively affected by sluggish internal growth,
volatile foreign exchange rates and a decline in recycled paper prices.

We believe that the company does not have enough to drive significant growth
over the long term. Thus, we downgrade the stock from Neutral to Underperform
and set a price target of $28.00.

Latest Posts on the Zacks Analyst Blog:

Gap Back on Growth Trajectory

Gap Inc. (NYSE:GPS) witnessed considerable recovery in its comparable sales
and total sales performance, driven by its relentless endeavors to keep itself
on the growth trajectory. The company's efforts have paid off well in an
economy, which is looking for ways to withstand the financial turmoil that
seems to have no end.

During the period from February to November this year, the company registered
improvements in comparable sales in each month, except April. In the same
period, comps growth touched a low of negative 2% and a high of positive 10%,
thereby recording average growth of approximately 4.4%. In the first ten
months of fiscal 2012, comps increased 4% in February, 8% in March, 2% in May,
10% in July, 9% in August, 6% in September, 4% in October and 3% in November,
while it remained flat in June and declined 2% in April.

Monthly sales data for Gap also showed a decent performance. Between February
and November 2012, the company registered a minimum year-over-year flat sales
growth and a maximum growth of 12%, reflecting an average growth of
approximately 6% for the period. The company recorded sales growth of 6% in
February, 10% in March, flat in April, 4% in May, 2.2% in June, 12% in July,
9.1% in August, 7.4% in September, 8% in October and 3.4% in November.

Fiscal 2011 Sales: A Recap

In fiscal 2011, Gap reported a decline in comparable sales every month, except
April and June. Lackluster sales in the North American region have
continuously dragged down Gap's comparable store sales throughout fiscal 2011.
During the fiscal, the company reported a decline of 4% in comparable sales
compared with an increase of 2% during the same period in fiscal 2010.
Accordingly, Gap's net sales inched down 1% to $14.55 billion from the
prior-year sales of $14.66 billion.

Initiatives Taken to Rebound Top Line

In an effort to improve customer experience and enhance productivity per
square footage, the company plans to strategically close and consolidate
square footage at Gap and Old Navy brands. Gap intends to deliberately reduce
its Gap North America store counts to 950 by the end of fiscal 2013, including
700 specialty stores and approximately 250 outlets.

Contrary to this, the company is planning aggressively to expand its
international and franchise business. Moreover, it intends to increase Gap
store count in China to approximately 45 during current fiscal.

In a drive to boost its international operations, Gap also consolidated its
foreign business under one division in London. Lackluster sales in North
America compelled the company to explore the overseas market. In order to
counter the domestic market saturation, Gap is aiming to generate 30% of total
sales from overseas operations and online business by fiscal 2013. To achieve
this, Gap has opened stores in China, Italy and Australia, and has launched
the e-commerce business in more than 90 markets. These moves are expected to
further strengthen its top and bottom lines, moving forward.

Results So Far

Despite exhibiting consistently weak performances in all four quarters of
fiscal 2011, the company reported a strong result for the first quarter of
fiscal 2012 with net sales increasing 5.8%. The robust performance was
primarily driven by a 4% growth in comparable store sales. As a result of the
increased top line, the company's earnings climbed 17.5% year over year to 40
cents per share.

During the second quarter of fiscal 2012, Gap's net sales grew 5.6% year over
year primarily driven by 4% increase in comparable store sales. Driven by
increased sales, along with improved margins and lower share counts, the
company's earnings per share jumped 40% year over year to 49 cents from 35
cents in the prior-year quarter.

The company's net sales for third-quarter increased 8.0% year over year
primarily due to a growth of 6% in comparable store sales. Quarterly earnings
came at 63 cents per share, up 66% from comparable quarter last year. Strong
earnings performance was mainly driven by an increase in sales along with
improved margins and a lower share count.

Bolstered by better-than-expected quarterly performance so far during fiscal
2012, the company raised its earnings guidance for the current fiscal to
$2.20–$2.25 per share from $1.95–$2.00 projected earlier. Moreover, Gap is now
anticipating a 12.0% rise in operating margin during fiscal 2012, up from the
previous guidance of 11.0%.

Our Recommendation

We believe that the company's long-term strategic moves along with disciplined
cost management measures will not only provide financial flexibility, but also
will help the company drive value proposition. Moreover, Gap's globally
recognized brands complement each other, enabling it to leverage its position
in the sector.

Gap, which competes with American Eagle Outfitters Inc. (NYSE:AEO) and The TJX
Companies Inc. (NYSE:TJX), currently holds a Zacks #2 Rank, which translates
into a short-term Buy rating. Moreover, we are maintaining our long-term
'Outperform' recommendation on the stock.

Get the full analysis of all these stocks by going to

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