Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: AutoNation, Inc. (NYSE: AN), General Motors Corp. (NYSE: GM), Hibbett Sports, Inc. (Nasdaq: HIBB), The Williams Companies, Inc. (NYSE: WMB) and Citi Trends, Inc. (Nasdaq: CTRN).
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Here are highlights from Wednesday’s Analyst Blog:
AutoNation Falls with the Big 3
We expect AutoNation, Inc. (NYSE: AN) to be hurt by a continuing weak new car market. The company is disproportionately exposed to Florida and California, states that will be hit the most by a slowing car market.
Should it happen, the bankruptcy of General Motors Corporation (NYSE: GM), one of the major customers, would largely affect the operations of AutoNation. As a result, we rate the shares a SELL with a target of $6.
Hibbett Headwinds Too Heavy
Hibbett Sports, Inc. (Nasdaq: HIBB) operates sporting goods stores that are around 5,000 square feet in small to mid-sized markets in the Southeast, Mid-Atlantic and Midwest. The company's stores offer athletic equipment, footwear, and apparel.
Hibbett's third quarter earnings per share were $0.01 below consensus estimates, but the company raised its full-year EPS guidance from $0.93-$1.03 to $0.97-$1.04. Hibbett's have held up reasonably well this year, despite the challenging retail environment. The company's results have been boosted by the company's continued store expansion, share buybacks and easy comparables in fiscal 2008.
Williams Cos a Tremendous Value
The Williams Companies, Inc. (NYSE: WMB) is an energy company that primarily finds, produces, gathers, processes, and transports natural gas. The company divides its business into four segments: Exploration & Production (E&P), Midstream Gas & Liquids, Gas Pipeline, and Gas Marketing Services.
In response to the drop in the stock price, management has indicated willingness to consider splitting the company into separate entities, with a final decision expected in the first quarter of 2009. While theoretically the plan makes sense, we do not think that the move will result in value creation given the current unfavorable macro backdrop.
Citi Trends Sales Under Pressure
Through strong relationships with its suppliers, Citi Trends, Inc. (Nasdaq: CTRN) seeks to provide nationally recognized branded merchandise at 20% to 60% discounts to department and specialty store prices. Citi Trends stores are typically located in neighborhood strip malls that are convenient to low and moderate income consumers.
Citi Trends reported a loss of $0.05 per share, which was above management's recently-lowered guidance of -$0.09 to -$0.13 and our estimate of -$0.11. The company also updated its full-year guidance and expects to earn $0.95-$1.05 per share in fiscal 2008.
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