CHICAGO, June 15, 2011 /PRNewswire/ -- Zacks Equity Research highlights: Cummins Inc. (NYSE: CMI) as the Bull of the Day and Enzon Pharma (Nasdaq: ENZN), as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NextEra Energy Inc. (NYSE: NEE), Bank of America Corporation (NYSE: BAC) and Progress Energy Inc. (NYSE: PGN).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Cummins Inc. (NYSE: CMI) is set to benefit from fuel economy improvements, new emission standards and increased prices. The company's results improved significantly in the most recent quarter, driven by the truck market recovery in North America and continued strength in non-U.S. markets.
Earnings exceeded the Zacks Consensus Estimate by $0.31 per share during the quarter. Furthermore, Cummins raised its EBIT guidance for 2011 based on higher profits in the first quarter of 2011.
These factors have led us to maintain our Outperform recommendation. Shares of Cummins are currently trading at 13.1X our 2011 EPS estimate of $7.87. Our $132 target price, 16.8X 2011 EPS, reflects this recommendation.
Enzon Pharma's (Nasdaq: ENZN) first quarter 2011 net loss of $0.07 per share was narrower than the year-ago loss of $0.20 due to substantial cost cutting by management. The discontinuation of the development of PEG-SN38 for mCRC was a major blow to Enzon, leaving it with just one clinical program in mid-stage development and all other programs in early stages of development.
Moreover, royalties from the sales of PegIntron, comprising a substantial part of revenues, have been declining. Recent FDA approval of Incivek and Victrelis can pose strong competition to PegIntron, which could further decline royalties from PegIntron sales.
We have, therefore, downgraded our rating on the stock from Neutral to Underperform. At the end of the first quarter, P/B multiple of the stock was approximately 2.1. Our price target of $9.50 corresponds to a P/B multiple of approximately 1.9.
Latest Posts on the Zacks Analyst Blog:
NextEra Gets Wind Project Funding
NextEra Energy Inc. (NYSE: NEE) said Bank of America Corporation (NYSE: BAC), the largest U.S. lender, has agreed to invest $177 million in a tax-equity transaction linked to a wind farm project of its business unit, NextEra Energy Resources LLC.
As part of the transaction, NextEra Energy sold Class B membership interests in White Oak Energy Funding LLC, a 150 megawatt wind energy project located in Illinois, to the bank. The company said the transaction will comprise of two fundings.
The White Oak project is expected to qualify for a cash grant under section 1603 of the American Reinvestment and Recovery Act. This is NextEra Energy's first tax-equity transaction which includes cash grant as a component.
Based in Juno Beach, Florida, NextEra Energy Inc. through its subsidiaries engages in the generation, transmission, distribution and sale of electric energy in Florida. The company competes with Progress Energy Inc. (NYSE: PGN).
NextEra reported 2011 operating earnings of 94 cents per share, at par with the year-ago quarter. The results of the company lay below the Zacks Consensus Estimate.
As of March 31, 2011, NextEra had $425 million in cash and cash equivalents, up 40.7% from $302 million as of December 31, 2010. Long-term debts of the company were $18.3 billion with a debt-to-equity ratio of 47%.
NextEra Energy expects its 2011 earnings to be in the range of $4.35 to $4.65 per share. The company also expects earnings to grow at an average rate of 5% to 7% from 2011 through 2014. The Zacks Consensus Estimates for second-quarter 2011, fiscal year 2011 and fiscal year 2012 are $1.07 per share, $4.47 per share and $4.74 per share, respectively.
We maintain our Neutral recommendation on NextEra Energy. The quantitative Zacks #3 Rank (short-term Neutral rating) for the company indicates no clear directional pressure on the stock over the near term.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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 3-6 months.
About the Analyst Blog
Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.