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Webelieve that Principal's strong franchise within the pension sector, which is aided by its diversification both in terms of products and geography, positions it well to benefit from the gradual recovery of the credit market. However, rising unemployment is reducing the number of participants in existing employee benefit plans.
Though we are concerned about higher delinquencies in its commercial mortgage portfolio, we expect the company to benefit from its decent capital level and cost containment measures.
Bear of the Day Sohu.com (SOHU) - While Sohu.com's (SOHU) third-quarter earnings beat the Zacks Consensus estimate and were in line with the company s own guidance, the outlook for the fourth quarter was far below expectation. The company's operating expenses have been steadily going up, which we fear could limit the growth in earnings.
Moreover, recent delays in game launches, weak ad spending, which is hurting the brand advertising revenue and intense competition pose a threat. Strength in its online games and portal business are expected to be the strongest drivers for growth beyond 2010.
Currently, we see limited upside for Sohu's revenue and earnings growth in the near term. We downgrade the stock to Underperform from our previous Neutral rating and set a six-month price target of $45.00.
Analyst Interviews Hotels and Lodging With Zacks Equity Research With some early signs of economic recovery, we believe that hotel occupancy will improve in the fourth quarter of 2009 and in 2010.
Zacks Industry Rank Analysis Some Improvements in Energy By Dirk Van Dijk Some important parts of the energy sector are showing significant improvement in their Zacks Industry ranks.
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