CHICAGO, July 14, 2011 /PRNewswire/ -- Zacks Equity Research highlights Watson Pharmaceuticals (NYSE: WPI) as the Bull of the Day and Carnival Corporation (NYSE: CCL) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Waste Management, Inc. (NYSE: WM), Casella Waste Systems Inc. (Nasdaq: CWST) and Republic Services Inc. (NYSE: RSG).
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Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
Based on its first quarter performance and increased guidance, we are upgrading Watson Pharmaceuticals (NYSE: WPI) to Outperform. The copmany posted first-quarter 2011 earnings of $0.89 per share, beating the Zacks Consensus Estimate by $0.03 and the year-ago earnings by $0.08 per share. Revenues increased 2% to $876.5 million, mainly driven by higher generics sales.
Watson Pharma increased its 2011 earning guidance range to $3.95 - $4.20 per share from $3.85 - $4.15 per share. Following the earnings announcement, we raised our 2011 earnings estimate by 14 cents to $4.29 per share.
We believe that the company's cost saving initiatives and new product launches, both branded and generic, will help drive growth. Our target price of $82 is based on 19.1x our 2011 EPS estimate
We are downgrading shares of Carnival Corporation (NYSE: CCL)from Neutral to Underperform. Political disturbances in some geographies and the earthquake in Japan are currently acting as the major hindrance to the company's growth. Moreover, surging fuel prices and a greater exposure to a sluggish European market will be headwinds for the company.
Carnival decreased its projections for net revenue yields from the range of 2.5%-3.5% to 1.5%-2.5% for fiscal 2011 on a constant dollar basis. The company lowered its guidance due to route changes resulting from political disturbances in the Middle East and North Africa (MENA) and the earthquake in Japan.
A greater-than-expected slowdown in the European economies could also threaten the company's profitability, given its increasing exposure to Europe in terms of revenue generation and capacity expansion compared with the industry. Our six-month target price of $33.00 equates to about 13.5x our estimate for 2011.
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1000 Green Trucks at WM
Waste Management, Inc. (NYSE: WM) has become the largest owner and operator of clean-running, heavy duty refuse trucks in North America by adding the 1000th natural gas truck to its fleet. The trucks are powered by clean-burning natural gas.
This is in line with the company's efforts to develop the cleanest fleet of heavy duty trucks in the industry. The trucks that Waste Management runs out of its Carson service yard, as well as a third of its California clean fleet, are powered by liquefied natural gas (LNG), which is derived in-house from the decomposition of organic waste at its Altamont Landfill in Livermore, California. Since November 2009, the landfill has been generating as much as 13,000 gallons of LNG per day, a virtually zero-carbon transportation fuel.
In a year, Waste Management's 1000 natural gas trucks are expected to displace eight million gallons of petroleum and eliminate 45,100 metric tons of greenhouse gas emissions. The natural gas fleet is part of the company's environmental sustainability initiative to direct capital spending of up to $500 million per annum over a 10-year period to reduce its fleet emissions by 15% and increase the fuel efficiency of its fleet by 15% by 2020.
Waste Management also has CNG and LNG fueling stations at 17 of its facilities throughout North America with more under the anvil. The company hopes to develop a new landfill-gas-to-LNG facility at its Simi Valley, California, landfill.
We appreciate Waste Management's commitment to reducing greenhouse gas emissions through increased recycling, the use of alternative transportation fuels, and the beneficial use of landfill gas.
Houston, Texas-based Waste Management provides collection, transfer, recycling and resource recovery, and disposal services to nearly 20 million residential, commercial, industrial and municipal customers. The company is also a leading developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in the U.S. Waste Management competes in niches with Casella Waste Systems Inc. (Nasdaq: CWST), Republic Services Inc. (NYSE: RSG) and privately held Safety-Kleen Inc. The shares of Waste Management currently retain a Zacks #3 Rank (short-term Hold recommendation).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=2649.
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