Zacks Bull and Bear of the Day Highlights: School Specialty, Tiffany, NYSE
Euronext, IntercontinentalExchange and NASDAQ OMX Group
CHICAGO, Jan. 22, 2013
CHICAGO, Jan. 22, 2013 /PRNewswire/ --Zacks Equity Research highlights School
Specialty (Nasdaq:SCHS) as the Bull of the Day and Tiffany & Co. (NYSE:TIF) as
the Bear of the Day. In addition, Zacks Equity Research provides analysis on
NYSE Euronext Inc. (NYSE:NYX), IntercontinentalExchange Inc. (NYSE:ICE) and
NASDAQ OMX Group Inc. (Nasdaq:NDAQ).
Full analysis of all these stocks is available at
Here is a synopsis of all five stocks:
Bull of the Day:
School Specialty's (Nasdaq:SCHS) second quarter fiscal 2013 adjusted earnings
of $0.82 a share beat the Zacks Consensus Estimate by 28% and the prior-year
quarter earnings by 60.8%, driven by overall margin improvement and the
company s cost control strategy. Though down year over year, total revenue
also surpassed the Zacks Consensus Estimate.
Although School Specialty lowered its revenue expectations for fiscal 2013 due
to a challenging market environment, we believe that the company's diversified
product and geographic mix, strategic and cost-control initiatives, combined
with its product innovation efforts place it well for long-term growth once
the school spending trends return to more normal levels.
Moreover, the industry has been witnessing a slow recovery in State and local
property tax receipts over the last few months, which should improve the
company's demand scenario ahead. We therefore upgrade our recommendation from
Neutral to Outperform.
Bear of the Day:
Tiffany & Co. (NYSE:TIF) witnessed soft holiday sales numbers that prompted
management to take a conservative stance on its future earnings. Results were
at the lower end of management s expectations. It seems that the company is in
an unfavorable position as the challenging economy is taking away some of the
sheen from the high-end retailer.
On a constant-currency basis, total worldwide net sales for the two months
period ended Dec 31, 2012, marked an increase of 4%, whereas comparable-store
sales remained flat. We observe that the rate of growth of net sales and comps
decelerated from 6% and 4%, respectively, registered during the two months
period ended Dec. 31, 2011. Management now expects fiscal 2012 earnings to be
at the lower end of the previously provided guidance range of $3.20 to $3.40
Tiffany had earlier trimmed its sales growth forecast to 5% to 6% for fiscal
2012, and hinted of contraction in operating margin. Consequently, we maintain
our Underperform recommendation on the stock, until we see any catalyst
triggering an upside.
Latest Posts on the Zacks Analyst Blog:
NYSE Upped to Neutral
On Jan 18, we upgraded our recommendation on NYSE Euronext Inc. (NYSE:NYX) to
Neutral based on its proposed $8.2 billion merger with
IntercontinentalExchange Inc. (NYSE:ICE). This shall further boost
efficiencies, though higher debt raises the concerns of the rating agencies.
Hence, this stock has gained a Zacks Rank #3 (Hold), indicating no clear
directional pressure in the near term.
Why the Upgrade?
NYSE reported third-quarter 2012 operating earnings per share of 44 cents, up
3 cents from the Zacks Consensus Estimate. However, results plunged 38% from
71 cents recorded in the year-ago quarter. Net revenues stood at $559 million,
sliding 20.6% from $704 million in the prior-year quarter. It also fell short
of the Zacks Consensus Estimate of $570 million. Over the past 4 quarters,
NYSE has delivered an average surprise of 1.82%.
Following the release of the third quarter results, the Zacks Consensus
Estimate for 2012 has edged down 1.1% to $1.80 per share. Moreover, the Zacks
Consensus Estimate for 2013 declined (down 1.8% to $2.26 per share) at a
Although NYSE's financial results reflect the industry-wide low trading
scenario, it continues to maintain a leading position by developing a market
model in response to the emerging trends and technological advancements in the
Most significantly, the proposed merger with IntercontinentalExchange is
expected to generate more than 15% of earnings accretion within the first year
of completion, while boosting the operating and competitive leverage of the
merged entity. Additionally, management projects run-rate expenses synergies
of about $450 million, which will be reaped in the second year of the merger
Following the merger, IntercontinentalExchange will also initiate annual
dividends of about $300 million, which is the current dividend payout of NYSE,
scheduled to culminate by the first half of 2013.
However, wariness prevails over the combined debt of the merged entity, which
is projected to be about $4.7 billion, as IntercontinentalExchange plans to
use all of its $1.0 billion cash and raise another $1.8 billion from its
revolving credit facility to buyout NYSE.
Although the business profile of the merger appears strong and NYSE is making
efforts to reduce its debt obligations through refinancing and other
activities, we believe these actions would take quite a long time given the
company's capital and other extraordinary cost requirements in the upcoming
Other Stocks to Consider
Apart from NYSE, other stocks in the stock exchange industry that are expected
to rebound with economic improvement include NASDAQ OMX Group Inc.
(Nasdaq:NDAQ) and IntercontinentalExchange. All these companies carry a Zacks
Rank #3 (Hold).
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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