Zacks Bull and Bear of the Day Highlights: Robert Half International, Kirkland's, MasterCard, American Express and Visa
Zacks
For Immediate Release
Chicago, IL – May 21, 2012 – Zacks Equity Research highlights Robert Half International (RHI) as the Bull of the Day and Kirkland's, Inc. (KIRK) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on MasterCard Inc. (MA), American Express (AXP) and Visa Inc. (V).
We are upgrading our recommendation on Robert Half International (RHI) to Outperform from Neutral following robust first quarter 2012 earnings. The company's first quarter earnings of $0.34 per share surpassed the prior-year earnings by 89% and the Zacks Consensus Estimate by 21%.
Each of the business segments of Robert Half reported strong revenue growth in the quarter. Besides revenue, earnings also experienced a robust growth owing to the strong demand of personnel in the technology and accounting sectors. Gross margins and operating margins also improved on solid top-line results.
We are encouraged by management's efforts to reward its shareholders through dividends and buybacks. Further, the improving global economic condition has heightened demand for the company's temporary and permanent staffing services and risk consulting and internal audit services.
Kirkland's, Inc. (KIRK) posted fourth-quarter 2011 earnings of $0.72 per share, which missed the Zacks Consensus Estimate of $0.74. But it was above the prior-year earnings of $0.66, fueled by strong sales during Harvest and Christmas. High-rising prices of commodities as well as slow recovery of global economy is negatively impacting the company's margins.
The company has also lowered its earnings guidance for the first quarter 2012 on the back of lower comparative sales during the period. Moreover, overdependence on Chinese vendors poses a threat. Hence we maintain an Underperform rating on the stock.
Based on 2012 earnings estimate of $1.05, the stock is trading at 13.0x compared to the industry average of 20.5x. Our target price of $12.00 is based on approximately 11.4x our 2012 earnings estimate.
In line with the industry trend of expanding digital payments services, MasterCard Inc. (MA) is preparing to bring a White Label Mobile Wallet solution jointly with C-SAM, a non-US based provider of turnkey solutions. The new solution comes just a week after the company launched PayPass Wallet Services.
The offering will facilitate a quicker, secured and flexible mode of payment to mobile operators, bankers and payment providers across the Asia-Pacific, Middle East and the African region.
The alliance will allow MasterCard to combine its pre-paid platform, offers, PayPass Wallet and informational services with C-SAM’s Mobile Transaction Platform (“MTP”). The joint solution will come with huge promotional offers to attract a large number of customers who want virtual payment services available on their mobile phones.
The new platform will address the intricacies in operating several mobile devices and its respective operating platforms and simultaneously preserving the security and other third party associations. With these services, the mobile operators and financial institutions will be able to offer unparalleled services to the customers.
With this initiative, MasterCard moves a step ahead of its peers – American Express (AXP) and Visa Inc. (V) – in offering digital payment services. Both AmEx and Visa are primarily focusing on the US market while MasterCard is on the lookout for expanding its footprint in the international market.
AmEx collaborated with Isis Mobile to provide Isis Mobile Wallet to its customers in Utah and Texas later this year. Competing on similar grounds, Visa entered into an agreement with Obopay Disbursements to pay out electronic funds to a prepaid card.
MasterCard currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We also retain our long term ‘Neutral’ recommendation on its shares.
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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