Chicago, IL – August 30, 2013 – Zacks Equity Research
highlights Magna International Inc.
) as the Bull of the Day and Hibbett Sports, Inc.
) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Juniper Networks
(JNPR - Analyst Report
(VMW - Snapshot Report
) and Alcatel-Lucent, S.A.
(ALU - Analyst Report
Here is a synopsis of all five stocks:
Bull of the Day:
Tesla has made cars sexy again. The auto industry is in the middle of a renaissance, and that includes the auto parts suppliers like Magna International Inc.
). This Zacks Rank #1 (Strong Buy) has surprised on the Zacks Consensus Estimate 7 quarters in a row.
Magna is based in Ontario, Canada and has 315 manufacturing operations in 29 countries. Its customers encompass nearly every auto company in the world. It produces body, chassis, interiors, exteriors, seating, powertrain, electronics, mirrors, closures and roof systems.
On Aug 8, Magna reported second quarter earnings and beat the Zacks Consensus by 11.3%. Sales jumped 16% to a record $8.96 billion. This was better than vehicle production which rose 7% in North America and fell 1% in Europe.
Complete vehicle assembly sales jumped 23% to $796 million compared to $645 million last year.
The auto supplier is optimistic about North American production. It gave 2013 guidance of 16.1 million vehicles.
It also raised full year revenue guidance to the range of $33.3 billion to $34.7 billion from its previous guidance of $32.6 billion to $34 billion.
Magna didn't give EPS guidance but that didn't stop the analysts from raising their estimates for both 2013 and 2014 after the big earnings beat.
8 out of 10 estimates have moved higher for 2013 since the report, pushing the Zacks Consensus Estimate up to $6.14 from $5.96.
Bear of the Day
What's going on in the sporting goods market? Hibbett Sports, Inc.
) recently lowered fiscal 2014 earnings and same store sales guidance.
This Zacks Rank #5 (Strong Sell) is only expected to grow earnings by 1.3% in fiscal 2014 as the retail environment remains challenging.
Hibbett Sports operates sporting goods stores predominantly in the South, Southwest, Mid-Atlantic and Midwest regions of the U.S. Its stores average about 5,000-square-feet and are located in strip malls and enclosed malls in small to mid-sized markets.
On Aug 23, Hibbett reported second quarter results and did beat the Zacks Consensus by 2 cents. Earnings were 40 cents compared to the Consensus of 38 cents.
But comparable same store sales rose just 0.3% year over year. The company blamed the soft sales on a "challenging economic environment."
Despite being encouraged by a strong start to the third quarter, and beating the Consensus Estimate for the second quarter, Hibbett still lowered its full year earnings guidance to the range of $2.65 to $2.77 from previous guidance of $2.85 to $3.05.
Full year comparable store sales are now expected to be in the low single-digit range which is down from the low to mid single-digit range it had been forecasting.
The analysts didn't wait around for more news. They cut fiscal 2014 to $2.76 from $2.91 but they also aren't optimistic on fiscal 2015 either. They slashed fiscal 2015 to $3.16 from $3.35.
Juniper, VMWare Expand Partnership
One of the leading providers of networking solutions and communications devices, Juniper Networks
(JNPR - Analyst Report
) recently announced that it has extended its partnership with VMware
(VMW - Snapshot Report
) to offer solutions for connecting virtual and physical networks within a virtual data center. VMware is an industry-leading virtualization software company.
The partnership involves Juniper’s VMware NSX L2 Gateway integration and VXLAN routing products that enable connection within a data center and between data centers and speed up the transition to software-defined networking (SDN). Considering VMware’s market position and customer clout, the partnership should help Juniper Networks expand its customer base.
The increasing complexity in cloud infrastructure has led to growing demand for SDN solutions. These solutions increase the flexibility of the infrastructure and reduce costs for companies. It is expected that the lower cost proposition will lead to quicker adoption of SDN technology, which bodes well for suppliers such as Juniper.
Juniper’s second-quarter 2013 revenues moved up 7.2% to $1.15 billion from the year-ago quarter and 8.6% sequentially. It is witnessing strong revenue growth in some of its key business markets and is gaining traction in its routing and switching portfolio. The company’s new products, cost reduction initiatives and improving execution are expected to remain the positives, going forward.
Juniper Networks Inc. is a leading provider of networking solutions and communications devices. The company develops, designs and sells products that help to build network infrastructure, which are used for services and applications based on single Internet protocol networks worldwide.
However, the pending outcome of the SEC investigation, competition from Alcatel-Lucent, S.A.
(ALU - Analyst Report
), among others, still-sluggish federal spending and unfavorable macroeconomic conditions remain near-term headwinds.
Currently, Juniper has a Zacks Rank #2 (Buy).Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:
About the Bull and Bear of the Day
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