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Intuitive Surgical, Nippon Telegraph & Telephone, Molina Healthcare, Unisys and Sears Holdings

^{Published on 2010-05-21 14:05:49 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--[ Zacks Equity Research ] highlights Intuitive Surgical (Nasdaq: [ ISRG ]) as the Bull of the Day and Nippon Telegraph & Telephone (NYSE: [ NTT ]) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Molina Healthcare (NYSE: [ MOH ]), Unisys Corporation (NYSE: [ UIS ]) and Sears Holdings Corp. (Nasdaq: [ SHLD ]).

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 first quarter, earnings of $2.12 per share were higher than the Zacks Consensus Estimate of $1.66. Revenue growth was witnessed across all segments.

Based on the company's strong first quarter performance, we upgrade the stock to Outperform with a target price of $409, based on a P/E of 48.1x our fiscal 2010 EPS estimate.

[ Bear of the Day ]:

We reiterate our Underperform recommendation for Nippon Telegraph & Telephone (NYSE: [ NTT ]), following the company's disappointing fiscal 2011 financial outlook.

We remain concerned regarding the less-than-anticipated sales of mobile handsets due to weak economic conditions in Japan, together with significant declines in ARPU as subscribers migrate to discounted service plans. The company is also facing intense pricing pressure from smaller telecom service providers.

KDDI and Softbank are gradually improving their mobile networks with 3G/4G technologies. Near saturation of the Japanese wireless market also remains a major problem. Severe competition together with NTT's leveraged balance sheet may restrict higher valuation levels over the near-term.

Latest Posts on the Zacks [ Analyst Blog ]:

Earnings Scorecard: Molina Healthcare

Following the release of first quarter results on May 5, 2010, many of the analysts covering Molina Healthcare (NYSE: [ MOH ]) have made upward revisions to their 2010 and 2011 annual estimates. The company performed impressively in the quarter, beating the Zacks Consensus Earnings Estimate by 23 cents. Furthermore, the acquisition of the Health Information Management business of Unisys Corporation (NYSE: [ UIS ]) should add value to Molinaa™s Medicaid health plan business.

Molina earned 41 cents per share in the first quarter of fiscal 2010, which is well above the Zacks Consensus Estimate of 18 cents. The better-than-expected results in the quarter were driven by higher operating revenues coupled with lower medical care costs on a per-member per-month (PMPM) basis because of a mild flu season.

Total operating revenues in the reported quarter climbed 12.3% year over year to $966.7 million. Premium revenues in the first quarter of 2010 climbed 12.6% to $965.2 million. The rise was attributable to an approximately 14% year-over-year rise in enrollment in the reported quarter.

Four of the 9 analysts covering the stock for fiscal 2010 have raised their estimates while only one has moved downwards in the last 30 days. Fiscal 2011 estimates have also been revised upwards by 5 analysts with no downward revisions in the last 30 days.

Sears Net Plunges, Still Beats

Sears Holdings Corp.a™s (Nasdaq: [ SHLD ]) fiscal 2010 first-quarter earnings plunged 39% to $16 million from $26 million in the year-ago quarter. However, excluding special items, adjusted earnings per share came in at 16 cents per share, which topped the Zacks Consensus Estimate by 2 cents. The year-over-year decline was primarily attributable to sluggish margins reflecting increased promotions in appliances. Shares of Sears Holdings have slipped more than 9% to roughly $90 by afternoon trading on the Nasdaq.

Total revenues during the quarter remained essentially flat, declining 0.1% year-over-year to $10 billion. The companya™s revenues were hurt by fewer stores, partially offset by higher same-store sales and a favorable impact of foreign currency translations. Total same-store sales grew 1.5% in the quarter, primarily driven by a 1.7% growth at Kmart coupled with a 1.2% increase in Sears Domestic.

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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