Zacks Bull and Bear of the Day Highlights: Allstate, Adobe Systems, American
Financial Group, Emc Insurance Group and Global Indemnity
CHICAGO, Jan. 4, 2013
CHICAGO, Jan. 4, 2013 /PRNewswire/ --Zacks Equity Research highlights
Allstate (NYSE:ALL) as the Bull of the Day and Adobe Systems (Nasdaq:ADBE) as
the Bear of the Day. In addition, Zacks Equity Research provides analysis on
American Financial Group Inc. (NYSE:AFG), Emc Insurance Group Inc.
(Nasdaq:EMCI) and Global Indemnity Plc Ireland (Nasdaq:GBLI).
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
Allstate's (NYSE:ALL) third quarter earnings solidly beat the Zacks Consensus
Estimate due to significant reduction in catastrophe losses and claims coupled
with improved premiums, ROE and book value. An appreciated investment
portfolio also boosted the operating cash flow and liquidity.
Agency expansions, ratings affirmation, dividend increment, product
restructuring and acquisitions validate Allstate's long-term stability. Though
the current volatile economy and catastrophe losses will continue to impact
the results in the fourth quarter of 2012, continued synergies are expected
from Allstate's industry-leading position, diversification and pricing
Our six-month target price of $48.00 per share equates to about 13.0x our
earnings estimate for 2012. Combined with the $0.88 per share annual dividend,
this target price implies an expected total return of 20.6% over that period,
which is consistent with our Outperform recommendation.
Bear of the Day:
Adobe Systems' (Nasdaq:ADBE) fourth quarter earnings exceeded the Zacks
Consensus Estimate, but we feel the subscription service will hurt Adobe's
revenue growth. Hence, we are downgrading our recommendation on Adobe shares
from Neutral to Underperform.
Adobe lowered its fiscal 2013 guidance from $4.4 billion to $4.1 billion,
considering the faster uptake the of Creative Cloud subscription model. We
expect near-term revenue to remain under pressure.
The company's expected earnings growth rate over the next 5 years is well
below the average for the industry. Hence the downgrade in recommendation. Our
$34.00 target price, 26.0X 2014 EPS, reflects this view.
Latest Posts on the Zacks Analyst Blog:
American Financial: A Strong Buy
On January 2, Zacks Investment Research upgraded American Financial Group Inc.
(NYSE:AFG) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
American Financial has been witnessing rising earnings estimates on the back
of a strong solid third-quarter performance and an enhanced guidance for 2012.
Moreover, this property & casualty insurer delivered positive earnings
surprises in all the 4 quarters with an average beat of 18.7%. The long-term
expected earnings growth rate for this stock is 8%.
American Financial reported third-quarter results on October 29. Non-GAAP
earnings per share came in at 82 cents, surpassing the Zacks Consensus
Estimate by 39%. However, it lagged the year-ago number by 8.9%.
The upside was largely due to higher income in the Annuity and Supplemental
Based on its progress and to accommodate the expected loss from Hurricane
Sandy, the company revised its earnings per share projection for 2012 to
$3.10–$3.30 from $3.10–$3.50.
Additionally, American Financial declared a special dividend of 25 cents per
share, besides an 11.4% hike in its regular quarterly dividend.
The Zacks Consensus Estimate for 2012 is $2.66 per share as 3 of the 7
estimates were revised upward over the last 60 days. The current estimate is
below the guidance range provided by American Financial. For 2013, one
estimate moved higher over the same time frame, lifting the Zacks Consensus
Estimate by 1.1% to $3.71 per share.
Other Stocks to Consider
The following property & casualty insurers with a favorable Zacks Rank are
also performing well and are worth considering.
1) Emc Insurance Group Inc. (Nasdaq:EMCI) carries a Zacks #1 Rank (Strong Buy)
2) Global Indemnity Plc Ireland (Nasdaq:GBLI) holds a Zacks #1 Rank (Strong
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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