With nearly $1
With nearly $1.4 billion available on its credit facility, thecompany has adequate capital to address 2009 and 2010 debt maturities We continue our Buy rating. We think healthcare will continue to outperformother REIT sectors in 2009. The yield is still over 8% and is being covered with operating cash. The currentpayout is safe, and think HCP is one of the best positioned names.
Bear of the Day: Utilization rates continue to decline, and bill rates are down as well. NavigantConsulting (NYSE: NCI) is taking steps to restructure its business, but theoperating environment remains challenging. As we have maintained for some time, we expect Navigant’s utilization rates toremain under pressure as clients continue to defer or forgo engagements.Companies in every industry are seeking to cut expenses wherever possible, andthe operating climate for business consulting firms remains extremelychallenging. Until we see further evidence that NCI can improve utilization rates andoperating results, we believe that a premium valuation is unwarranted.
Our pricetarget of $9.00 reflects a multiple of 13x our 2009 estimate As such, we continue to rate the shares a Sell at this time. Latest Posts on the Zacks Analyst Blog: Altria Beats, Raises GuidanceAltria Group (NYSE: MO) recently reported strong second-quarter results, asadjusted earnings increased 8.7% to 50 cents from 46 cents in the prior-yearquarter, primarily driven by the smokeless tobacco category. Net revenues increased 33% year-over-year to $6.7 billion, driven by cigarettesegment results that increased 22.5%. The company was able to pass on theincrease in federal taxes by raising prices, which, in turn, raised segmentrevenue.
The acquisition of UST and cigars (up 16.8%) also contributed favorablyto the top line. Lilly Posts Good Second QuarterEli Lilly (NYSE: LLY) turned in another very good quarter. Revenue grew 3% to$5.29 billion, right in-line with our estimate. Revenues would have been up 9%had it not been for a negative foreign exchange headwind.