Zacks Equity Research highlights: Fifth Third Bancorp (Nasdaq: FITB) as the Bull of the Day and Hhgregg Inc. (NYSE: HGG) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Toyota Motor Corp. (NYSE: TM), Honda Motor Co. (NYSE: HMC) and Nissan Motor Co. (Nasdaq: NSANY).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We are upgrading our recommendation on Fifth Third Bancorp (Nasdaq: FITB) to Outperform. We are encouraged to see the aggressive credit management efforts by the company and expect it to experience an improvement in credit quality in the upcoming quarters.
The company's third quarter earnings were a nickel ahead of the Zacks Consensus Estimate. Results were driven by better-than-expected growth in revenues but were impacted substantially by the company's strategic actions to reduce credit risk.
Though challenging economic conditions along its footprint and the recent regulatory issues are expected to remain an overhang going forward, we expect the company's diverse revenue stream, opportunistic expansions and cost containment measures to support its earnings.
Hhgregg Inc. (NYSE: HGG) is a leading specialty retailer of premium video products, brand name appliances, audio products and accessories. Through its superior purchase experience, the company is able to generate great customer loyalty, leading to referrals and finally produce repeat business.
However, the company's profitability primarily depends on its ability to anticipate and respond in a timely manner to trends in consumer preferences relating to major household appliances and consumer electronics. In addition, the fierce competition and the still-recovering economic situation concerns us.
Our long-term Underperform recommendation on the stock indicates that it will perform below the market. Hhgregg competes against Best Buy, Sears, Lowe's, Home Depot and regional retailers, such as Fry's and BrandsMart.
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Toyota’s Output Dips Again
Toyota Motor Corp. (NYSE: TM) witnessed an 8.7% fall in global production for the third straight month in November to 656,924 vehicles. The automaker, highly criticized for its spate of automotive safety recalls this year, saw a dip in exports by 9.4% and a plunge in domestic sales by 35% during the month. However, the fall in domestic sales can be blamed on the expiration of government incentive programs in September.
Meanwhile, production outside Japan inched up 0.3% based on the higher output in South Africa and Asia. This could be the reason for Toyota’s optimistic sales projection for international markets.
Recently, Toyota projected its domestic sales (excluding sales from subsidiaries) to decrease 17%, which is higher than 10% fall in the overall Japanese market as forecasted by the Automobile Manufacturers Association of Japan.
However, the automaker is banking on burgeoning demand in the Asian markets to lift sales. It anticipates sales to grow by 8% in China to 900,000 vehicles, 11% to 2.1 million vehicles in other Asian markets excluding Japan, 9% to 1.9 million vehicles in the U.S., 7% to 860,000 vehicles in Europe and 6% to 1.3 million vehicles in the Middle East, Latin America and other overseas markets.
In order to support the growing sales, the automaker plans to enhance its production level by 2% to 8.7 million units in 2011. It will expand its overseas output by 6% to 4.8 million units and contract its domestic production by 4% to 3.9 million units.
Although Toyota recorded a fall in global output in November, its domestic rivals experienced the reverse. Honda Motor Co. (NYSE: HMC) posted a 5.4% rise in output to 317,473 vehicles. Its exports surged 71%, while domestic sales plunged 37%.
Nissan Motor Co. (Nasdaq: NSANY) revealed a 19% growth in production to 372,106 vehicles during the month. Mazda Motor Corp. saw a 22.6% rise in output to 120,991 vehicles. Mitsubishi Motors Corp. registered an 11.2% increase in production to 103,848 vehicles.
Toyota, a Zacks #3 Rank (Hold) stock, showed a fivefold increase in profit to ¥115.5 billion ($1.34 billion) or ¥31.47 per share (37 cents) in the second quarter of its fiscal 2011 from ¥22.19 billion ($258.26 million) or ¥6.96 per share (8 cents) in the same quarter of previous fiscal year. The profit was boosted by marketing strategy as well as cost reduction measures incorporated by the company during the quarter.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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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 3-6 months.
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