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Interactive Brokers Group, Citi Trends, Vodafone Group Plc, Verizon Communications and AT&T


Published on 2011-12-29 06:48:51 - Market Wire
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Zacks Bull and Bear of the Day Highlights: Interactive Brokers Group, Citi Trends,... -- CHICAGO, Dec. 29, 2011 /PRNewswire/ --

Zacks Bull and Bear of the Day Highlights: Interactive Brokers Group, Citi Trends, Vodafone Group Plc, Verizon Communications and AT&T

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CHICAGO, Dec. 29, 2011 /PRNewswire/ -- [ Zacks Equity Research ] highlights Interactive Brokers Group (Nasdaq: [ IBKR ]) as the Bull of the Day and Citi Trends, Inc. (Nasdaq: [ CTRN ]) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Vodafone Group Plc (Nasdaq: [ VOD ]), Verizon Communications (NYSE: [ VZ ]) and AT&T Inc. (NYSE: [ T ]).

(Logo:  [ http://photos.prnewswire.com/prnh/20101027/ZIRLOGO ])

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 ]:

Interactive Brokers Group (Nasdaq: [ IBKR ]) third-quarter earnings were double the Zacks Consensus Estimate. Improved top line and substantially higher net income attributable to non-controlling interests were among the positives. These were partly offset by higher interest and non-interest expenses.

Interactive's fundamentals remain strong with a liquid balance sheet. Continued strong performance of its brokerage business and quarterly dividend restoring were impressive.

Our six-month target price of $18.00 per share equates to about 13.3x our earnings estimate for 2011. Combined with a quarterly dividend of $0.10 per share, this target price implies an expected total return of 21.7% over that period. This is consistent with our Outperform recommendation.

[ Bear of the Day ]:

Citi Trends, Inc. (Nasdaq: [ CTRN ]) falling comparable store sales, coupled with rising operating expenses battered the third-quarter 2011 results. The company incurred a quarterly loss of $0.38 per share that broadened from the prior-period loss of $0.03. The Zacks Consensus Estimate for the quarter was a loss of $0.37 per share.

Further, due to uncertainty hovering around sales given the global economic unrest, the company rolled back its earnings guidance range of $1.25 to $1.35 per share for fiscal 2011. The company decided not to provide any guidelines unless it finds any near-term catalysts to drive sales.

Intense competition from other retailers, seasonal nature of business and risks associated with sourcing merchandise from developing countries may further undermine the company's future growth prospects. Currently, we are maintaining a long-term Underperform recommendation on the stock.

Latest Posts on the Zacks [ Analyst Blog ]:

Vodafone Upgraded on Growth Plans

We have upgraded our long-term recommendation on Vodafone Group Plc (Nasdaq: [ VOD ]) to Neutral from Underperform on the back of strong growth prospects in the emerging markets.

Although Vodafone reported lackluster earnings in the first half of fiscal 2012, revenue improved on strong data, messaging and fixed-line services.

Since the last downturn, Vodafone has returned to organic revenue growth and is continuously gaining market share in the majority of its markets. The British mobile phone giant is looking for further expansion in the emerging markets of Eastern Europe, India and Africa, through new growth strategies and exiting minority holdings to boost liquidity, free cash flow and shareholders' return.

Over the last year, the company dispensed with its minority holdings of Polkomtel, SFR and China Mobile and is in the process of selling Softbank Corporation holdings, which is expected to be completed by April 2012.  This strategy is expected to generate annual organic service revenue growth in the range of 1% to 4% and free cash flow in the range of £6.0 billion to £7.0 billion over the next three years (2011–2014).

Over the same period, Vodafone expects EBITDA margins to stabilize, with continued cost efficiency, regional scale and improving margins in various markets including India. We believe that Vodafone's new growth strategy aided by planned divestiture of minority holdings will place it favorably against larger rivals, Verizon Communications (NYSE: [ VZ ]) and AT&T Inc. (NYSE: [ T ]).

Despite growing market share gains, Vodafone continues to witness declines in service revenue and subscriber count, particularly in Italy and Spain, due to weakness in the economy, regulatory pressure and stiff competition. In addition, Vodafone's service revenue in Europe continues to be affected by reductions in mobile termination rates or MTRs (fees that operators charge each other to connect calls) and roaming prices.

Further, we believe that deteriorating margins and aggressive price competition, particularly in India would limit the upside potential of the stock. Moreover, the company might face a £7.2 billion liability for a 15-year renewal of spectrum in the UK, Germany, Italy and Spain, which could put undue pressure on the balance sheet.

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.

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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.

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