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The Zacks Analyst Blog Highlights: Citi Trends, IBM, Accenture, Hewlett-Packard and Microsoft



       The Zacks Analyst Blog Highlights: Citi Trends, IBM, Accenture,
                        Hewlett-Packard and Microsoft

PR Newswire

CHICAGO, July 10, 2013

CHICAGO, July 10, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Citi Trends Inc.
(Nasdaq:CTRN-Free Report), IBM Corp. (NYSE:IBM-Free Report), Accenture
(NYSE:ACN-Free Report), Hewlett-Packard (NYSE:HPQ-Free Report) and Microsoft
(Nasdaq:MSFT-Free Report).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of
the Day pick for free.

Here are highlights from Tuesday's Analyst Blog:

Citi Trends Kept at Underperform

On Jul 8, 2013, we reiterated our long-term recommendation on Citi Trends Inc.
(Nasdaq:CTRN-Free Report) at Underperform with a target price of $14.00, based
on the sluggish macroeconomic environment.

Why the Reiteration?

Operating in the consumer-driven retail industry, we believe Citi Trends
remains significantly impacted by the macroeconomic issues, wherein its
customers continue to feel the pinch of increased payroll tax, higher fuel
prices, high unemployment rate and delayed tax refunds.

Moreover, the seasonal nature of the company's business exposes it to
significant risks if the seasons fail to deliver the expected operating
performance.

Additionally, the highly fragmented specialty retail sector compels Citi
Trends to compete with larger off-price rivals, mass merchants as well as
smaller specialty retailers on the basis of fashion, quality and service. To
retain its existing market share, the company may have to reduce its sales
prices, which could affect its margins.

These have been reflected in Citi Trends' performance as it saw negative
earnings surprise for first-quarter fiscal 2013. The company reported
first-quarter fiscal 2013 earnings per share of 42 cents, missing the Zacks
Consensus Estimate of 57 cents and down 39.1% from 69 cents earned in the
year-ago quarter.

Consequently, over the last 60 days, the Zacks Consensus Estimate for fiscal
2013 has moved down to a loss of 3 cents per share from a profit of 6 cents
per share. Similarly, the Zacks Consensus Estimate of loss of 47 cents for the
second quarter widened by a penny  over the same time frame.

However, prudent steps taken by Citi Trends such as store expansion strategy
as well as endeavors to reduce inventory shrinkage can steadily improve the
operational performance of this Zacks Rank #3 (Hold) stock in the future.
Nevertheless, we believe that amid the absence of near-term growth catalysts
and persistent unsettling economic issues, Citi Trends' performance is likely
to remain strained in the near future.

IBM Strengthens Cloud Portfolio

IBM Corp.'s (NYSE:IBM-Free Report) latest acquisition of SoftLayer
Technologies Inc. is expected to strengthen its cloud services portfolio. The
acquisition will allow IBM to upsell and cross sell its cloud-based products
and services to SoftLayer's customers while gaining new ones.

IBM will integrate SoftLayer into its new cloud services division – IBM
SmartCloud – which provides a wide range of cloud-based products and services
to business enterprises. The acquisition will also strengthen IBM's 100 strong
software-as-a-service (SaaS) business solutions.

The combined services will provide the infrastructure for implementing cloud
computing, but in a cost effective way. It will also accelerate the
integration of public and private clouds. Moreover, it will provide customized
privacy, data security and computing services to its clients.

IBM is seeing strong demand for its cloud-based solutions, which is indicated
by the fact that its cloud revenues increased 80.0% in 2012. Buoyed by this
robust demand, IBM expects to earn $7 billion in revenues from cloud-based
services by 2015-end.

Moreover, IBM expects to spend about $20 billion on acquisitions through 2015.
The company is looking for strategic acquisitions to remain competitive and
gain from the increased spending on cloud-based services. Gartner expects
global spending on public cloud services to grow at a CAGR of 17.7%
(2011-2016). It also expects the total market to grow from $76.9 billion in
2010 to $210 billion in 2016.

Thus, we believe that the IT major remains well positioned for long-term
growth based on its four key growth initiatives: smarter planet, growth
markets, business analytics and cloud computing, which are expected to deliver
at least $50 billion in revenues by fiscal 2015. We also believe that IBM's
strong product pipeline, expansion into emerging markets and continuous
acquisitions will help it to achieve its growth target, going forward.

However, we remain cautious on the overall IT spending environment and believe
that macroeconomic concerns will continue to hurt IBM's growth in the near
term. Increasing competition from Accenture (NYSE:ACN-Free Report),
Hewlett-Packard (NYSE:HPQ-Free Report) and Microsoft (Nasdaq:MSFT-Free Report)
is an additional headwind for the company.

Currently, IBM has a Zacks Rank #3 (Hold).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of
the Day pick for free.

About Zacks Equity Research

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Continuous coverage is provided for a universe of 1,150 publicly traded
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to developments that affect company profits and stock performance.
Recommendations and target prices are six-month time horizons.

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Past performance is no guarantee of future results. Inherent in any investment
is the potential for loss. This material is being provided for informational
purposes only and nothing herein constitutes investment, legal, accounting or
tax advice, or a recommendation to buy, sell or hold a security. No
recommendation or advice is being given as to whether any investment is
suitable for a particular investor. It should not be assumed that any
investments in securities, companies, sectors or markets identified and
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date of herein and is subject to change without notice. Any views or opinions
expressed may not reflect those of the firm as a whole. Zacks Investment
Research does not engage in investment banking, market making or asset
management activities of any securities. These returns are from hypothetical
portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced
monthly with zero transaction costs. These are not the returns of actual
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http://www.zacks.com/performance for information about the performance numbers
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SOURCE Zacks Investment Research, Inc.

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