Zacks Equity Research highlights Canadian Solar, Inc. (Nasdaq: CSIQ) as the Bull of the Day and Charlotte Russe Holdings (Nasdaq: CHIC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Skechers (NYSE: SKX), eBay (Nasdaq: EBAY) and Celanese (NYSE: CE).
Full analysis of all these stocks is available at http://at.zacks.com/?id=2676.
Here is a synopsis of all five stocks:
Bull of the Day: Canadian Solar, Inc. (Nasdaq: CSIQ)
Canadian Solar engages in the design, development, manufacture, and sale of solar module products (ranging from 5-watt to 300-watt and using both polycrystalline and monocrystalline solar cells) that convert sunlight into electricity for various uses. The company was incorporated by Dr. Shawn Qu in Canada in 2001. In the People's Republic of China, the company has three manufacturing facilities located at Suzhou, Changshu and Luoyang.
CSIQ's bullishness has been boosted by improving company fundamentals, higher revenue guidance, capital expansion funds generated through follow-on offerings, and volatility in the price of oil. Going forward, on the back of solar panel sales growth in various global markets, extension of product lines, material cost savings through the company's more vertically-integrated production structure, higher captive generation of solar cells, long-term supply agreements, and a silicon reclamation program should, collectively, generate significant earnings growth.
So, with a predominantly bullish outlook, we maintain our BUY recommendation on CSIQ with a six-month target price of $29.50. Price appreciation to our near-term valuation target represents 94.3% upside potential.
Bear of the Day: Charlotte Russe Holdings (Nasdaq: CHIC)
Charlotte Russe is a mall-based specialty apparel retailer, which carries both branded and private-label merchandise, targeting women in their teens and twenties. The retailer offers a broad assortment of fashionable merchandise.
We reiterate our Sell rating on Charlotte Russe shares. In July, the company reported soft results for the fiscal third quarter and issued disappointing guidance for the fiscal fourth quarter. Economic conditions have worsened in the last two months, which has added to Charlotte Russe's problems.
We are again reducing our estimates. Our fiscal 2008 EPS estimate goes from $1.18 to $1.16, and our fiscal 2009 EPS from $1.00 to $0.94. CHIC shares may look cheap at these levels, but we expect further deterioration in its business. Our estimates are well below the consensus view, and we expect consensus estimates to continue falling over the next few months.
Latest Posts on the Zacks Analyst Blog:
Skechers (NYSE: SKX)
In July, Skechers issued third-quarter guidance that was below consensus expectations. Macro risks have increased in the last two months, and economic conditions have worsened. These conditions are continuing to pressure consumer discretionary spending, and that is negatively affecting the footwear maker' results. Therefore, we are reducing our estimates for 2008 and 2009.
Longer term, the Manhattan Beach, California-based company's diverse portfolio of brands, international growth opportunities, and retail store expansion should bode well for its stock price. Still, its near-term upside will be limited until macro conditions show signs of improving. We maintain our Hold rating.
eBay (Nasdaq: EBAY)
eBay is scheduled to report third quarter earnings on October 15. The market is looking for revenues of $2.16 billion and pro forma EPS of $0.41. We believe the company's earnings may fall short of expectations, but its EPS should match the consensus estimate with help from share repurchases.
The company is still exhibiting weak growth in its gross merchandise volume (GMV), which is the total value of successfully closed listings. In the second quarter, eBay's GMV increased just 8.3%, and we think that growth rate could decline further in the third quarter.
Celanese (NYSE: CE)
Celanese is a global hybrid chemical company based in Dallas, TX. The company produces chemical substances and advanced materials. The company concentrates in four different business segments targeting the consumer and industrial products market: Advanced Engineered Materials (AEM) (16%), Consumer Specialties (17%), Industrial Specialties (21%), and Acetyl Intermediates (46%).
Celanese has a strong growth strategy, with development in Asia as a key factor. There is $400 million of free cash flow per year, primarily focused on share repurchases. There is higher pricing on continued strong global demand for Acetyl Intermediates products.
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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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