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Intuitive Surgical, Synopsys, American International Group, Citigroup and Zale Corporation

^{Published on 2009-12-23 14:20:39 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights Intuitive Surgical (Nasdaq: [ ISRG ]) as the Bull of the Day and Synopsys (Nasdaq: [ SNPS ]) the Bear of the Day. In addition, Zacks Equity Research provides analysis on American International Group (NYSE: [ AIG ]), Citigroup (NYSE: [ C ]) and Zale Corporation (NYSE: [ ZLC ]).

Full analysis of all these stocks is available at [ http://at.zacks.com/?id=2678 ].

Here is a synopsis of all five stocks:

[ Bull of the Day ]:

Intuitive Surgical's (Nasdaq: [ ISRG ]) story is improving. A new product was developed as an upgrade to its da Vinci Surgical System. Furthermore, the company enjoys a virtual monopoly in robotic surgery without direct competition.

The company's razor/razor blade business model ensures recurring revenues even during difficult times. In the third quarter, earnings of $1.64 per share were higher than the Zacks Consensus Estimate of $1.45. Revenue growth was witnessed across all the segments.

We believe the company will continue leveraging its monopoly position in the industry. We reiterate our Outperform recommendation with a target price of $329.

[ Bear of the Day ]:

Synopsys (Nasdaq: [ SNPS ]) delivered mediocre third quarter results, with below-par operating performance. The 2010 guidance does not reflect any major growth. Although Synopsys is gaining traction from new products, acquisitions, and new EDA partnerships, but we believe these are unlikely to show results in the near term.

We believe Synopsys' time-based license model has good visibility and it has a strong balance sheet. On the other hand, the semiconductor industry has yet to stabilize and generate demand. Synopsys is facing customer concentration risk.

The industry-wide weakness is impacting its core business. We therefore downgrade the stock from Neutral to Underperform.

Latest Posts on the Zacks [ Analyst Blog ]:

Pay Czar Alters Rule for AIG Staff

U.S. pay czar Kenneth Feinberg said on Monday that he has revised his decision on pay limitations for a top executive of the American International Group (NYSE: [ AIG ]), as the executive has decided to remain with the company.

Approving the request of AIG, the pay czar will allow paying the employee about $4.3 million in incentive on top of the annual base salary. Prior to this development, the AIG executive was entitled to a base salary of $450,000 for 2009 because the person intended to leave AIG by the year end.

According to a letter from the pay czar, the $4.3 incentive payments will consist of an annual long-term restricted stock grant worth up to $1 million and a stock payment valued at about $3.3 million on the grant date.

The pay czar is in charge of deciding compensation packages for the highest-paid employees at all the firms that received bailout money.

Earlier this week, in a major revelation, the chief of AIG disclosed its intention of repaying the Troubled Asset Relief Program (TARP) loan back to the U.S. government within the next two years. For this, the company expects to use earnings from business operations and by disposing unnecessary businesses in the near term.

Other concerns that need attention are the improvement in overall aggressive managerial efficiency, regenerating confidence among the dispirited staff and withstanding consistent pressure from the U.S. government to sell assets quickly to repay debts. These issues have to be dealt with -- head-on and immediately -- to prevent the company from collapsing. So retaining the employee is critical to the long-term performance and stability of AIG.

In a separate letter by the pay czar on the same day to Citigroup (NYSE: [ C ]), the pay czar said that it has modified its pay ruling allowing Citigroup to expand the number of expatriate employees who qualify for some extra compensation from four to five.

Zale Cancels Orders as Sales Fall

Jewelry retailer Zale Corporation (NYSE: [ ZLC ]) said its November comparable-store sales fell 18.6%. As a result, the company, which has been grappling with sliding sales, canceled some of its orders from suppliers and delayed payments in a tough holiday season.

According to a report, Zale refused to accept the inventory worth millions. However, the company responded by saying that management has been evaluating which merchandise should be kept for the holiday season, and which ones should be returned, hinting that this has resulted in the delay in payment to suppliers.

Zale notified that it has sufficient cash to pay suppliers and enough merchandise to meet consumer demand in this holiday shopping season.

The jewelry market has been hit hard by the global meltdown, as consumers affected by lower discretionary income have been prioritizing their purchases. This has led Zale and many other retailers to shut down stores or wind up operations.

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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