Zacks Bull and Bear of the Day Highlights: Humana, Gentiva Health Services, ConAgra Foods, HJ Heinz and Kraft Foods
<div class="xn-content"><p><span class="xn-location"><location value="LU/us.il.chicgo" idsrc="xmltag.org">CHICAGO</location></span>, <span class="xn-chron"><chron>Sept. 21, 2011</chron></span> /PRNewswire/ -- <a href="http://www.zacks.com/"><org>Zacks Equity Research</org></a> highlights <b><org value="NYSE:HUM" idsrc="xmltag.org">Humana, Inc.</org></b> (NYSE: <a href="http://www.zacks.com/stock/quote/HUM">HUM</a>) as the Bull of the Day and <b><org value="NASDAQ-NMS:GTIV" idsrc="xmltag.org">Gentiva Health Services</org></b> (Nasdaq: <a href="http://www.zacks.com/stock/quote/GTIV">GTIV</a>) as the Bear of the Day. In addition, <org>Zacks Equity Research</org> provides analysis <b><org value="NYSE:CAG" idsrc="xmltag.org">ConAgra Foods Inc.</org></b>(NYSE: <a href="http://www.zacks.com/stock/quote/CAG">CAG</a>),<b></b><b><org value="NYSE:HNZ" idsrc="xmltag.org">HJ Heinz Co.</org></b> (NYSE: <a href="http://www.zacks.com/stock/quote/HNZ">HNZ</a>) and <b><org value="NYSE:KFT" idsrc="xmltag.org">Kraft Foods Inc</org></b>. (NYSE: <a href="http://www.zacks.com/stock/quote/KFT">KFT</a>).</p><p>(Logo: <a href="http://photos.prnewswire.com/prnh/20101027/ZIRLOGO">http://photos.prnewswire.com/prnh/20101027/ZIRLOGO</a>)</p><p>Full analysis of all these stocks is available at <a href="http://at.zacks.com/?id=2678">http://at.zacks.com/?id=2678</a>.</p><p>Here is a synopsis of all five stocks:</p><p><a href="http://www.zacks.com/newsroom/commentary/index.php?type_id=6">Bull of the Day</a>: </p><p><b><org value="NYSE:HUM" idsrc="xmltag.org">Humana, Inc.</org>'s</b> (NYSE: <a href="http://www.zacks.com/stock/quote/HUM">HUM</a>) second-quarter earnings modestly beat the Zacks Consensus Estimate, owing to improved consolidated premiums and ASO fees that also drove the benefit ratio along with improvement in medical and specialty memberships. <org value="NYSE:HUM" idsrc="xmltag.org">Humana</org> benefits from the new rule in health care reform, which led to an efficient deployment of capital. </p><p>The upcoming AMS acquisition is further expected to enhance the company's <org>Medicare</org> coverage. Overall, we expect an upside to <org value="NYSE:HUM" idsrc="xmltag.org">Humana</org> shares on the basis of higher membership, surplus cash flows generation, favorable prior-period claims development, and higher projected segment earnings. </p><p>Our six-month target price of <span class="xn-money"><money>$89.00</money></span> equates to 11.6x our earnings estimate for 2011. Combined with the <span class="xn-money"><money>$1.00</money></span> per share annual dividend, this target price implies an expected total return of 20.7% over that period. This is consistent with our Outperform recommendation on the shares. </p><p><a href="http://www.zacks.com/newsroom/commentary/index.php?type_id=7">Bear of the Day</a>: </p><p>We have downgraded our recommendation on <b><org value="NASDAQ-NMS:GTIV" idsrc="xmltag.org">Gentiva Health Services</org></b> (Nasdaq: <a href="http://www.zacks.com/stock/quote/GTIV">GTIV</a>) to Underperform, prompted by poor operating performance coupled with weakening financial position. The company's second-quarter earnings lagged the Zacks Consensus Estimate, on the back of high interest payments as well as increased expenses, resulting in a deteriorated cash position. </p><p>However, the strong growth in Hospice segment, driven by the Odyssey acquisition, led to a huge surge in revenue, which was offset by the rising costs. The company needs to engage in effective cost control, while continuing its current acquisition strategy. </p><p>Overall, the future outlook for Gentiva does not look very promising. Our six-month target price of <span class="xn-money"><money>$6.25</money></span> equates to 3.0x our earnings estimate for 2011. This price target implies an expected total negative return of 8.4% over that period. </p><p>Latest Posts on the Zacks <a href="http://www.zacks.com/stock/news/AnalystBlog">Analyst Blog</a>:</p><p><b><i>ConAgra Misses but Reaffirms</i></b></p><p><b><org value="NYSE:CAG" idsrc="xmltag.org">ConAgra Foods Inc.</org></b>(NYSE: <a href="http://www.zacks.com/stock/quote/CAG">CAG</a>) has reported first quarter of fiscal 2012 results, with diluted EPS (from continuing operations) of <span class="xn-money"><money>$0.20</money></span> compared with <span class="xn-money"><money>$0.32</money></span> in the year-ago quarter.</p><p>This decline of 38% reflects negative impact of short-term changes in the wheat market affecting the company's <org>Commercial Foods</org> segment and the inflationary pressures in the <org>Consumer Foods</org> segment. The results missed the Zacks Consensus Estimate of <span class="xn-money"><money>$0.31</money></span> per share.</p><p><b>Guidance</b></p><p>ConAgra reaffirms expectation of fiscal 2012 full-year diluted EPS to grow at a low- to mid-single-digit rate, based on high inflation and increased marketing investments, over the comparable EPS of <span class="xn-money"><money>$1.75</money></span> during fiscal 2011. The company revised its full-year inflation expectations to 9-10% for the <org>Consumer Foods</org> segment from original estimate of 7-8%.</p><p><org value="NYSE:CAG" idsrc="xmltag.org">ConAgra Foods Inc.</org> is one of <span class="xn-location"><location value="LB/nam" idsrc="xmltag.org">North America</location></span>'s leading food makers operating in the <org>Consumer Foods</org> and <org>Commercial Foods</org> segments. The company, over time, has given tough competition to its peers such as <b><org value="NYSE:HNZ" idsrc="xmltag.org">HJ Heinz Co.</org></b> (NYSE: <a href="http://www.zacks.com/stock/quote/HNZ">HNZ</a>) and <b><org value="NYSE:KFT" idsrc="xmltag.org">Kraft Foods Inc</org></b>. (NYSE: <a href="http://www.zacks.com/stock/quote/KFT">KFT</a>), based on its cost-control measures on the backdrop of rising raw material prices as well as its product-line expansion program in a highly-competitive food industry.</p><p>We maintain a Neutral recommendation on the stock backed by a Zacks #4 Rank, which translates into a short-term Sell rating.</p><p>Get the full analysis of all these stocks by going to <a href="http://at.zacks.com/?id=2649">http://at.zacks.com/?id=2649</a>.</p><p><b>About the Bull and Bear of the Day</b></p><p>Every day, the analysts at <org>Zacks Equity Research</org> select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.</p><p><b>About the Analyst Blog</b></p><p>Updated throughout every trading day, the <a href="http://www.zacks.com/stock/news/AnalystBlog">Analyst Blog</a> provides analysis from <org>Zacks Equity Research</org> about the latest news and events impacting stocks and the financial markets.</p><p><b>About <org>Zacks Equity Research</org></b></p><p><org>Zacks Equity Research</org> provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term. </p><p>Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons. </p><p>Zacks <a href="http://at.zacks.com/?id=2677">"Profit from the Pros"</a> e-mail newsletter provides highlights of the latest analysis from <org>Zacks Equity Research</org>. Subscribe to this free newsletter today by visiting <a href="http://at.zacks.com/?id=7158">http://at.zacks.com/?id=7158</a>.</p><p><b>About Zacks </b></p><p><a href="http://Zacks.com">Zacks.com</a> is a property of <a href="http://www.zacks.com/"><org value="ACORN:575874126" idsrc="xmltag.org">Zacks Investment Research</org></a>, Inc., which was formed in 1978 by <span class="xn-person"><person>Leonard Zacks</person></span>. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. 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