For Immediate Release
Chicago, IL – February 17, 2017 –Zacks Equity Research highlightsFerrari (BIT: (RACE - Free Report) - Free Report ) as the Bull of the Day and AMC Entertainment (NYSE: (AMC - Free Report) - Free Report ) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Kate Spade Co. (NYSE: - Free Report ) , Michael Kors (NYSE: (KORS - Free Report) - Free Report ) and Coach (NYSE: - Free Report ).
Here is a synopsis of all five stocks:
Bull of the Day :
It’s easy for me to get revved up for today’s Bull of the Day as it makes dream machines. I’m a car guy and there’s something about that prancing horse that does it for me every time. Of course I’m talking about Zacks Rank #1 (Strong Buy)Ferrari (BIT: (RACE - Free Report) - Free Report ).
I don’t know if being bullish on a stock can land me a great deal on a 488 but I’m going to give it my best shot. So if anybody is listening out there in Maranello, “What about Dave?” Ferrari is the most fabled exotic car manufacturer in the world. They have a rich racing history and create some of the most breathtaking automobiles known to man. I could probably go on for six or seven pages about the Ferrari heritage, its legendary founder and its championship pedigree but what’s important here is the winning team that’s running the company right now.
Last year was a record year for Ferrari. Total shipments reached 8,014 units, net revenues grew 8.8% to 3.1 billion euros. Adjusted EBITDA came in at 880 million euros with margins at 28.3% and new profit was up 37.1% to 425 million euros. These great numbers led analysts to revise their earnings estimates to the upside, giving us the favorable Zacks Rank.
Two analysts have increased their earnings estimate for the current year while one has jacked up their estimate for next year. The bullish shift in EPS has pushed our Zacks Consensus Estimate from $2.32 to $2.61 for the current year and increased next year’s number from $2.49 to $2.89.
Bear of the Day :
It seems like every time I go to the movie theater there are fewer workers, less movie-goers, and it gets more expensive. While I don’t mind giving up a few bucks to be entertained, I’m still shocked at how empty some of these places usually are. There’s an usher, somebody selling me tickets, and a couple people at the concession stand but that’s about it. My first hand experiences may be leading me away from today’s Bear of the Day AMC Entertainment ( NYSE: (AMC - Free Report) - Free Report ).
I’m sure you all recognize AMC from the movie theaters they own. AMC originally was an acronym of American Multi-Cinema. AMC is actually a majority-owned subsidiary of the Chinese conglomerate Dalian Wand Group. Founded in 1920, AMC is the second-largest theater group in the US behind Regal. There are 346 AMC locations in North America to go along with 86 in China.
AMC is currently a Zacks Rank #5 (Strong Sell) due to several earnings estimate revisions by analysts on Wall Street. Three analysts have recently dropped their current quarter earnings estimates while only one analyst has increased their numbers. Two have dropped their numbers for next quarter and next year. The overall bearish sentiment has dropped our Zacks Consensus Estimate from 26 cents to 20 cents for the current quarter and has sunk next year’s number from $1.41 to 89 cents. What’s startling to me is that next year’s EPS number represents a 17.79% contraction in EPS. That’s coming at a time when we’ve got 7.2% quarterly EPS growth on the S&P 500.
Kate Spade Spikes 11% on Earnings Beat, Confirms Takeover Talk
On Thursday, shares of luxury retailer Kate Spade Co. ( NYSE: - Free Report ) are spiking, up over 11% in morning trading after the company posted a fourth-quarter earnings beat, as well as confirmed discussion of a potential takeover.
Kate Spade posted earnings of 41 cents per share, surpassing the Zacks Consensus Estimate of 35 cents per share; investors should note this number excludes 25 cents from non-recurring items. Net income was $86 million, up from $61 million in the prior-year period.
Revenues came in at $471 million, lagging behind our consensus estimate of $474 million and increasing 9.8% year-over-year. Kate Spade North America net sales were $407 million, growing 9.5% compared to the fourth quarter of 2015, while Kate Spade International net sales were $59 million, or an increase of 12.4%. Also, direct-to-consumer comparable sales growth was 9.3% for the quarter.
"Our solid fourth quarter and fiscal year performance demonstrate the strength of our differentiated business model, as we continued to gain market share and deliver strong growth despite a challenging retail environment," CEO Craig Leavitt said.
But the biggest announcement of Kate Spade’s earnings announcement was the confirmation that it is exploring strategic alternatives for its business. The retailer has been under pressure from activist firm Caerus Investors since November , who has been concerned about Kate Spade’s share price decline over the last two and a half years but believes the company would make a “great acquisition candidate.”
Kate Spade said it has hired Perella Weinberg Partners as its financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison as its legal counsel. They also made clear that “there can be no assurance” a deal can be made, and it will not provide guidance or any updates on the possible transaction until it has come to a conclusion. Its main competitors, Michael Kors (NYSE: (KORS - Free Report) - Free Report ) and Coach (NYSE: - Free Report ), have even been floated has potential suitors.
Like many of its industry peers, Kate Spade has suffered from declining mall traffic, a strong dollar that has negatively impacted tourist spending, and a sluggish luxury market.
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About the Bull and Bear of the Day
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.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
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.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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