Zacks Bull and Bear of the Day Highlights: Edison International, Statoil,
ConAgra Foods, Ralcorp Holdings and Bank of America
CHICAGO, Jan. 9, 2013
CHICAGO, Jan. 9, 2013 /PRNewswire/ --Zacks Equity Research highlights Edison
International (NYSE:EIX) as the Bull of the Day and Statoil ASA (NYSE:STO) as
the Bear of the Day. In addition, Zacks Equity Research provides analysis on
ConAgra Foods, Inc. (NYSE:CAG), Ralcorp Holdings Inc. (NYSE:RAH) and Bank of
America Corp. (NYSE:BAC).
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
We upgrade our long-term recommendation on Edison International (NYSE:EIX)
from Neutral to Outperform, owing to the inherent business strength of its
regulated utility Southern California Edison. Although the company reported a
third quarter earnings miss, we attribute it to a delay in the 2012 General
Rate Case (GRC) rate case decision and continuing losses at the Midwest
Owing to California's supportive regulatory environment, our bullishness on
the company remains unfazed. Going forward, our bullish outlook for the
company is supported by consistent performance throughout its solid base of
stable regulated utility operations, a steady growth in its rate base and
ongoing alternative energy projects in-line with the renewable energy mandate.
Also, the steadily rising dividend of Edison International adds extra shine to
the stock. Thus we upgrade our rating on the stock from Neutral to Outperform
with a price target of $56.00 based on a P/E of 17.4x our fiscal 2013 EPS
Bear of the Day:
We are downgrading our recommendation on Statoil ASA (NYSE:STO) ADRs to
Underperform from Neutral. The company reported lower-than-expected earnings
in the third quarter, mainly due to high exploration costs and low liquids
production with steep operating costs in Norway.
While reiterating its 2012 guidance, management now expects 2013 production to
decline sequentially versus the previous flat forecast. While Statoil is
fairly active in its development operations, we remain apprehensive as hiccups
remain in the company's production growth for the time being.
Considering the aforementioned reasons, we are downgrading our long-term
recommendation. Our $23 price objective, based on the 2013 P/E multiple of
8.0x, supports this view.
Latest Posts on the Zacks Analyst Blog:
ConAgra to Offer Up Shares
ConAgra Foods, Inc. (NYSE:CAG) announced offering sale of its shares worth
$240.0 million through an underwritten public offering.
The total offer consists of approximately 8.1 million shares to be issued at a
price of $29.50 (the closing price on December 31, 2012). In addition, the
company has also offered the underwriter a 30-day option to purchase shares
worth $35.0 million.
The proceeds from the issue will be utilized to fund ConAgra's pending
acquisition ofRalcorp Holdings Inc. (NYSE:RAH) at a price of $90.0 per share.
The acquisition was announced in late November last year. In case the
acquisition does not get through, the proceeds will be utilized for general
The acquisition, valued at $6.8 billion, is expected to be complete by March
2013, subject to regulatory approvals. Subsequent to the acquisition of
Ralcorp, ConAgra will emerge as the largest private label packaged food
company in North America. Management expects the combined entity to garner
sales of over $18 billion in the future. Starting from the fourth year,
ConAgra is expected to derive cost synergies of about $225 million per year
from the acquisition.
BofA Merrill Lynch, a wing of Bank of America Corp. (NYSE:BAC), is the sole
book running manager for the offering of common stock.
The company had a total of 405.8 million shares and a market capital of $12.18
billion at the close of trading on January 3, 2013.
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
About the Analyst Blog
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Zacks Equity Research about the latest news and events impacting stocks and
the financial markets.
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