Equities Research Analysts’ Updated EPS Estimates for October, 13th (BABA, CTL, FMX, GPI, KO, LEG, MANH, MNTA, MTG, MTSC)
Alibaba Group Holding (NYSE:BABA) was downgraded by analysts at Zacks Investment Research from a strong-buy rating to a hold rating. According to Zacks, “Alibaba Group is a Chinese e-Commerce giant which caters mainly to its native market. Alibaba Group’s fiscal first-quarter results exceeded the Zacks Consensus Estimate. The solid growth in Alibaba’s China retail and mobile business as well as strength across most of the core operating metrics aided the results. The company’s dominance in the mobile commerce market, its continued efforts to develop new products, international growth opportunities and strong financial position are all positives. However, macro headwinds, continued investments and increasing competition from Tencent Holdings and Baidu remain the overhangs.”
CenturyLink (NYSE:CTL) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “CenturyLink’s Prism TV services bode well and has brought in revenues. This growing momentum of Prism IPTV service has prompted the company to plan the 17 Channel over the top (OTT) services launch in the beginning of 2017 which should boost the company’s video segment business. CenturyLink’s investment in the fiber-to-the-tower (FTTT) has expanded its fiber-based backhaul services. The company is also focused on establishing itself as a global leader in cloud infrastructure and hosted IT solutions arena designed for enterprise customers. However, the company is facing mounting competitive pressure which led to the decision of cutting 8% of its labor force which accounts to almost 3,000 to 3,500 workers losing their jobs. Moreover, loss of high-speed broadband subscribers, falling low-bandwidth data services revenues, intensifying competition, federal regulations and the need to upgrade technology remain potent headwinds.”
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Fomento Economico Mexicano SAB (NYSE:FMX) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “FEMSA is on track to drive growth through its strategic measures, which include increasing store count, diversifying its business portfolio and focusing on core business activities. The company's strong cash flow generation capacity also enables it to make incremental investments in business expansion. However, the company has been facing difficult times, mainly due to currency headwinds, which has been weighing on Coca-Cola FEMSA for a while now. Also, soft Heineken performance has been a hurdle in the recent past. Further, FEMSA has been witnessing pressurized margins owing to growth of lower-margin businesses. We believe that persistence of these headwinds and regulatory pressure may impact future results. Nonetheless, estimates have been rising lately ahead of third-quarter earnings of the company that has mixed record of earnings surprises in recent quarters. Also, FEMSA's focus on achieving growth via acquisitions bodes well.”
Group 1 Automotive (NYSE:GPI) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Group 1 Automotive's dependence on certain auto manufacturers and intensifying competition in the automotive market remain concerns. The company's cash is locked up in inventories to a large extend, which can affect short-term liquidity. Group 1 Automotive’s earnings estimates have been stable lately. The company has a mixed record of surprises in recent quarters.”
Coca-Cola (NYSE:KO) was given a $49.00 price target by analysts at RBC Capital Markets. The firm currently has a a buy rating on the stock.
Leggett & Platt (NYSE:LEG) was upgraded by analysts at Zacks Investment Research from a sell rating to a hold rating. According to Zacks, “Leggett is progressing well with its long-term strategy of achieving top-line growth of 4%–5% annually. The company is also enhancing its business portfolio by expanding operations in areas that provide competitive advantage while exiting the underperforming ones. The company maintains its disciplined capital allocation and remains keen on boosting shareholder value. However, the company’s significant global presence exposes it to adverse currency movements. Raw material price deflation and stiff competition also pose significant threats. These factors led the company’s top-line to decline for the fifth consecutive quarter in the preceding quarter. While the company provided a conservative sales outlook for 2016, it continues to anticipate generating record EPS, robust EBIT margin and enhanced cash flows this year. Nonetheless, estimates have been going down ahead of the company’s third quarter earnings release.”
Manhattan Associates (NASDAQ:MANH) had its buy rating reissued by analysts at Brean Capital.
Momenta Pharmaceuticals (NASDAQ:MNTA) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. The firm currently has $14.00 target price on the stock. According to Zacks, “Momenta focus on developing generic versions of complex drugs and biosimilars. The company received a major boost with the FDA’s approval of Glatopa, a generic version of Teva’s Copaxone (20 mg/mL). The drug has captured nearly 38% of the once-daily Copaxone 20 mg market. Momenta’s efforts to develop its biosimilars pipeline have been impressive. We are also encouraged by the company’s collaboration with Sandoz for Glatopa. Moreover, the company’s partnership with Mylan for six of its current biosimilar candidates has bright prospects. However, we remain concerned about pricing pressure in the generic market. The loss estimates have gone down lately ahead of the company’s Q3 earnings release. The company has a mixed record of earnings surprises in recent quarters.”
MGIC Investment Corp. (NYSE:MTG) was downgraded by analysts at Zacks Investment Research from a strong-buy rating to a hold rating. According to Zacks, “MGIC Investment’s insurance in force has been witnessing growth owing to the addition of high quality new insurance. Per the September operating statistics, the company’s insurance in force grew 4.3% year over year. Going ahead, we expect this metric to rise further. Also, positive credit trends, low expense ratio are tailwinds. Moreover, an improving housing market as well as declining delinquency will boost the company’s earnings in the coming quarters. However, a competitive environment and pressure to maintain capital at required level will reduce the company’s capital flexibility. The company is set to report third quarter results on Oct 18. The Zacks Consensus Estimate is pegged at $0.17 per share, down 40.5%. However, our proven model state that company will beat estimate as it has the right combination of Zacks Rank #3 that increases predictive power of a beat and Earnings ESP of 7.65%.”
MTS Systems Corp. (NASDAQ:MTSC) was upgraded by analysts at Sidoti from a neutral rating to a buy rating.
Nokia Corp. (NYSE:NOK) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Nokia has been struggling due to the unimpressive performance of its flagship unit– the Nokia Networks division. The company has been investing heavily in research and developmnt expecnses as the company continues to produce innovative new technologies. While we are optimistic on the comapny's expandion of its product portfolio, we are also wary of the increased expenses. Additionally, the company has been pursuing an active acquisition strategy. This strategy threatens to expose the company to integration and foreign currency risks. We however remain positive on the company's sustain efforts to introduce customer centric products.”
Owens-Illinois (NYSE:OI) was upgraded by analysts at Zacks Investment Research from a hold rating to a buy rating. They currently have $19.00 price target on the stock. According to Zacks, “For 2016, Owens-Illinois is targeting 1% volume growth and a 100 basis points expansion in segment margins. The company maintained its adjusted earnings per share guidance for 2016 in the range of $2.25–$2.35. It will benefit from the Vitro's food and beverage business buyout. The acquired business will contribute annual revenues of $945 million to Owens-Illinois’ business. Further, successful joint venture with Constellation and asset optimization program in Europe will also drive its results. These are well reflected in the company’s positive record of earnings surprises in recent quarters.”
Societe Generale assumed coverage on shares of Ferrari (NASDAQ:RACE). They issued a sell rating and a $45.00 target price on the stock.
Rogers Communication (NYSE:RCI) was downgraded by analysts at Zacks Investment Research from a buy rating to a hold rating. According to Zacks, “Rogers Communications is the first wireless operator in Canada to offer 3 Internet of Things (IoT) services – End-to-End Incident Management, Farm & Food Monitoring, Level Monitoring, to business enterprises. Rogers’s decision to purchase broadcasting company – Tillsonburg Broadcasting Company Limited bodes well. The company’s newly launched cost-effective, simple and competitive IaaS Cloud services and Rogers Unison (a new mobile solution) have increased its postpaid wireless and internet subscribers. The company has also been focusing on the business enterprise segment. Moreover, the company aims to launch its Internet TV services with 4K picture quality by the end of the year. However, intense wireless and cable TV industry competition, continuous softness in the advertising market and loss of viewers to video streaming service providers remain potent headwinds. Loss incurred from the shutdown of Shomi is another concern.”
Sonic Automotive (NYSE:SAH) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Sonic Automotive’s earnings estimates have been going down lately. The company has a mixed record of earnings surprises in recent quarters. The company’s extensive merchandise inventory raises concerns. Moreover, a highly competitive industry and fluctuations in foreign exchange rate remain headwinds. “
Statoil ASA (NYSE:STO) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “The near term prospect for Statoil ASA’s upstream operation seems bleak following the persistent weak commodity prices. Although oil prices has recovered significantly from mid-February lows, a closer look reveals that it is way below the level the commodity was trading in mid-2014. Additionally, OPEC’s September crude production came at a record level, which contradicts the cartel’s pledge to recover oil prices by curbing production in an already over-supplied market. Overall, there might not be any respite to oil prices in the near term that could hinder the company’s upstream business. On top of that, Statoil ASA’s plan to lower 2016 spending for exploration activities may reduce the company’s production. Therefore, we caution investors against this company at this point.”
Exxon Mobil Corp. (NYSE:XOM) was given a $98.00 price target by analysts at RBC Capital Markets. The firm currently has a a buy rating on the stock.
Zoetis (NYSE:ZTS) was downgraded by analysts at Zacks Investment Research from a hold rating to a sell rating. According to Zacks, “Zoetis, one of the leading global animal health companies, is focused on both livestock and companion animals. Performance of the livestock business is concerning. Headwinds remain in the form of disease outbreaks and stiff competition in the animal health space. Zoetis continued to witness a decline in the U.S. sales of swine products in the second quarter of 2016 due to increased competition. Meanwhile, sales of poultry products are declining globally due to competitive pressures. Pipeline setbacks remain a concern as well. However, the company’s companion animal business should continue to perform well. Further, Zoetis’ efforts at boosting operational efficiency bode well. We are positive on Zoetis’ recent acquisition of Scandinavian Micro Biodevices, which should expand its offerings in the growing veterinary diagnostics segment of the animal health market. We expect to see more of such acquisitions/deals at the company.”
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