Zacks Bull and Bear of the Day Highlights: Beacon Roofing Supply, Invesco, Dell, Quest Software and Hewlett-Packard
CHICAGO, July 5, 2012 /PRNewswire/ -- Zacks Equity Research highlights Beacon Roofing Supply (Nasdaq:BECN) as the Bull of the Day and Invesco, Ltd. (NYSE:IVZ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onDell Inc. (Nasdaq:DELL), Quest Software Inc. (Nasdaq:QSFT) and Hewlett-Packard Co. (NYSE:HPQ).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2678.
Here is a synopsis of all five stocks:
We have upgraded our recommendation on Beacon Roofing Supply (Nasdaq:BECN) to Outperform from Neutral with a target price of $29. Second-quarter 2012 earnings were $0.07 per share, beating the Zacks Consensus Estimate for a loss of $0.08. Revenues increased 33.4% to $395.2 million, topping the Zacks Consensus Estimate of $346 million.
Beacon purchased Cassady Pierce Company to expand its business activities, while also augmenting its product portfolio in the lines of building products. It has entered into a new five-year senior secured credit facility that will provide financial stability for future acquisitions, enabling it to pursue growth opportunities.
Moreover, the ramp up in the housing market will benefit the company as demand for roofing and re-roofing activities are on the rise. Our six-month target price is $29, amounting to 18.1x 2012 EPS.
We are downgrading our recommendation on Invesco, Ltd. (NYSE:IVZ) to Underperform based on continuously rising operating expenses and volatile capital markets. The company's first quarter 2012 earnings showed higher operating expenses.
Constantly rising operating expenses remains a concern for Invesco. Though a reverse trend was seen in the third and fourth quarter of 2011, operating expenses have been on the rise, primarily due to higher compensation costs.
Our six-month target price of $21.00 per share equates to about 11.2x the Zacks Consensus Estimate for 2012. Combined with the annual dividend of $0.69 per share, this target price implies an expected negative return of 5.6% over that period, which is consistent with our Underperform recommendation.
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Dell Edges Competition for Quest
After battling with other bidders over the past few months, Dell Inc. (Nasdaq:DELL) has finally snapped up information technology (IT) management software provider Quest Software Inc. (Nasdaq:QSFT). Dell edged out its competitors with a striking offer of $2.4 billion (net of Quest's cash and debt).
The purchase consideration translates to $28.00 a share, which is a slight premium over Quest's closing share price of $27.82 on Monday. The deal has already been approved by the boards of directors of both companies and is expected to close in Dell's fiscal third quarter ending October 2012.
A Good Deal for Dell